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The Giuliani administration is seeking bids from both nonprofit and for-profit organizations to run a new $7.5 million job placement program intended to move welfare recipients into long-term employment. But some community group leaders say the contracts are designed to favor for-profits like former mayoral adviser Richard Schwartz’s new firm, Opportunity America.

City welfare officials held a bidders’ conference last Wednesday to explain the unusual terms of the contracts: vendors will only receive payment–up to $1,000 a head–after they place a welfare recipient in a job that provides “sufficient income to eliminate the need for cash assistance.” The program will reward contractors who make successful long-term job placements by making additional payments after an individual stays in a job for three months, and again after six months.

Critics charged that the program provides no up-front resources for counseling, training or the development of a network of private-sector employers. “It really excludes the little guy,” said Clara Porter of the East New York Urban Youth Corps. “For one thing, you have to have sufficient capital to go six months before you get paid by the city. It’s not appropriate for a community-based organization.”

“You will find mostly well-heeled for-profits applying for this, with already good connections in the corporate world,” said another nonprofit executive who asked to remain unnamed. Others argued that the system may not provide adequate funding to set up effective support systems for mothers moving into the work-force.

But Lee Bowes of America Works, a for-profit, said the contract promotes efficiency and creativity. “They’re really opening the door for a lot of ideas. That, I think, is really refreshing,” she said.

“Some nonprofits could start things up. They have the resources,” added spokesman Jim Whelan of the Human Resources Administration. “But it’s completely performance and outcome-based.” After the first year, he added, each contractor will have to place at least 250 welfare clients in jobs each year.

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