Archives of the Mayor's Press Office

Date: Friday, March 30, 2001

Release #101-01

Contact: Sunny Mindel / Sid Dinsay
(212) 788-2958


Remarks by Mayor Giuliani at Public Hearing on Local Laws

The next bill before me today is Introductory Number 693-A, sponsored by Speaker Vallone, Public Advocate Green and several of their colleagues. The bill would amend the City's Administrative Code in relation to the City's procurement of apparel and textile services.

This legislation would impose illegal and bureaucratic requirements on the City's procurement of apparel to help prevent the City from contracting with so-called sweatshops. The City does not award contracts to sweatshop owners. Under the Procurement Policy Board's rules, a City agency cannot enter into a contract with a company unless the agency determines that the company is "responsible." In order to be found "responsible," a company must demonstrate that it has the business integrity to justify the receipt of public funds. Sweatshops obviously do not possess the requisite business integrity.

The bill would mandate that apparel contractors, and every subcontractor and supplier in the entire supply chain, pay their employees a wage and health benefit level dictated by the City Comptroller. For contractors and subcontractors operating in the United States, the Comptroller would be required to set the wage and health benefit level at a minimum of $8.75 per hour. This wage and benefit level, far in excess of the Federal and New York State minimum wage, would have to be paid to every employee in any way involved in the manufacture of apparel destined for a City agency. For example, if an apparel contractor were to employ a subcontractor to ship goods to the City, and the shipping subcontractor were to pay some of its employees less than the Comptroller-mandated wage and benefit level, the City may be required to terminate the entire contract.

The bill's delegation of power to the Comptroller to dictate contract terms such as employee wages is illegal under both local and State law. The City Charter grants the Mayor and mayoral agencies the authority to administer contracts. Therefore, this delegation to the Comptroller violates the City Charter and the State Municipal Home Rule Law by transferring and curtailing the powers of the Mayor without a referendum. Moreover, a business that complies with Federal and State labor statutes should not be penalized just because the Comptroller is not satisfied with the wages and benefits paid to its employees.

In an even more egregious attempt at governmental overreach, the bill would require the Comptroller to set wage and health benefit levels for the employees of apparel contractors and subcontractors working overseas. Foreign employees' wage and benefit levels would have to be comparable to the $8.75-level that the bill mandates for American workers. Potential apparel contractors would be required to disclose the wages and benefits of every foreign employee, including employees of far-removed subcontractors. The Comptroller would then determine whether these employees were earning the appropriate wage and benefit level.

The bill would also impose onerous reporting requirements on potential contractors by attempting to mandate that they provide the names and addresses of every subcontractor involved in the performance of the contract. By attempting to force a contractor to track down and disclose the wages and benefits paid to every employee of every company in its supply chain, including those overseas, the bill would turn City contractors into international labor enforcement agents. If contractors cannot discover the wages and benefits of these workers, or if they are not as high as the rate set by the Comptroller, contractors could be forced to either sever ties with certain subcontractors or forego City business. Given the potential cost of complying with this legislation, many contractors will simply refuse to do business with the City, shrinking the pool of potential City contractors and driving up contract prices for City taxpayers.

My Administration has worked to simplify contracting procedures in order to minimize bureaucratic burdens on both businesses and City agencies. This bill would derail the progress we have made in simplifying and streamlining procurement procedures. Under the current procurement rules, the City can purchase many goods valued at $25,000 or less by simply issuing a purchase order, enabling agencies to obtain small purchases very quickly and easily. Introductory Number 693-A, however, would cover any apparel contract worth more than $2,500, effectively eliminating an agency's ability to purchase small amounts of apparel expeditiously.

Should this bill become law, it would not go into effect for 270 days. By that time, it would not impact my Administration. I cannot, however, endorse an illegal piece of legislation that would needlessly complicate the City's procurement process. My Administration has worked hard to streamline contracting procedures so that more businesses are able to compete for City contracts, saving City taxpayers millions of dollars. Unfortunately, this bill is an illegal step backward towards a more bureaucratic contracting process.

For the reasons previously stated, I will now veto the bill.

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