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Source : NYC Comptroller
April 12, 2023
Author : Patty Allen
According to New York City Comptroller Brad Lander's report, only 2% of New York City contract dollars went to Black and Latino-owned businesses in 2022.
This disturbing statistic comes even as the city and state of New York have been national leaders in giving more contracts to minority and women-owned enterprises (M/WBE) in recent years.
Certified M/WBEs received only 5.2% of the value of all new city contracts and purchase orders registered in Fiscal Year 2022.
After years of regulations and initiatives to increase M/WBE contracting with the City, M/WBE-certified businesses accounted for only 15.9% of the smaller range of city contracts and purchase orders subject to M/WBE participation standards established under Local Law 174. (LL 174).
This law requires elected officials and mayoral agencies to create targets for the number of contracts with M/WBEs for standardized, professional, and construction services and commodities worth up to $1 million.
The departments with the biggest percentage of M/WBE contract value were Small Business Services (90.1%), Department of Cultural Affairs (85.2%), and Department of Buildings (79.6%). Meanwhile, construction and standard services procurements trailed behind those for goods and professional services in regards to fulfilling M/WBE procurement criteria.
As per the report, while businesses owned by Black, Latino, Native American, and Asian American women, only won less than 2% of contracts in 2022, 70% of M/WBE contracts went to businesses with white female or Asian American male owners.
WBEs receive a far smaller percentage of registered contracts and purchase orders. The overall number of contracts and orders reported for male-owned businesses is more than double (11,713) those of women-owned businesses (5,338, including the white WBEs).
Even when M/WBEs were awarded contracts, the average value of the job was just $670,000, which is significantly less than the average contract for $5.01 million given to non-M/WBE.
Often, subcontracting and M/WBE compliance procedures are paper-based, ambiguous, and ineffective. The City's capacity to comply with the M/WBE program's standards is hindered by the fact that the current M/WBE compliance methods are overly dependent on self-reporting from agencies and prime vendors of the City.
When M/WBEs are awarded contracts, they are often not paid on time. In FY22, approximately 55% of M/WBE contracts recorded were retroactive, higher than the citywide rate of roughly 52%. This is especially difficult for smaller businesses that lack the working capital to sustain prolonged payment wait times.
The Comptroller's report includes in-depth recommendations for how to overcome persistent obstacles to raising the proportion and value of City contracts with M/WBEs, including:
New York City Mayor Eric Adams explained, “Earlier this year, I established ambitious new OneNYC goals for total M/WBE spending and signed an executive order…all in an effort to truly build out support systems and create new opportunities for M/WBEs in New York City.” He continued, “ And while more than a quarter of eligible contracts were awarded to M/WBE firms in the first three-quarters of this administration, we recognize there is much more we can do to build a more equitable city.”