Despite New York City’s claims of breaking barriers and fostering opportunities for Minority and Women-Owned Business Enterprises (M/WBEs), City Comptroller Brad Lander’s report suggests otherwise.
Comptroller Lander, in an exclusive interview with LittleAfrica News, pointed out that a considerable portion of the city’s procurement budget, nearly three-quarters of the $40 billion, is inaccessible to M/WBEs.
The report highlights a stark disparity in the allocation of the city’s roughly $40 billion annual contract spending, with only 5.3% going to Minority- and Women-Owned Business Enterprises (M/WBEs) in the fiscal year 2023.
It also reveals an even more concerning breakdown: Black M/WBEs accounted for merely 1.16% of the registered value of contracts and purchase orders subject to Local Law 174 goals.
Hispanic M/WBEs fared slightly worse, capturing just 0.96%, while women of color, as a collective group, secured a meager 1.03% of the total.
These figures spotlight the significant challenges that minority and women entrepreneurs face in accessing equitable opportunities in city contract spending.
The report highlighted that out of the $10 billion allocated for M/WBE participation and goal setting in contracting, only 9.8% of the contracts were awarded to any M/WBE, down from 16% in FY22.
The city offers contracts across various categories, including construction, goods, social services, and information technology.
Lander noted that Michael Garner, the Chief Business Diversity Officer, is trying to improve these statistics.
He said, “There’s no doubt people are trying, but the numbers are just fortunately right there in black and white.”
Lander added, “This is a city where black and Hispanic New Yorkers are 52% of the city yet, combined, 2% of the contracts.”
To address the need for greater diversity in M/WBE contracts, Comptroller Lander highlighted three areas for improvement.
Firstly, he pointed out that the current system does not effectively match the needs of city agencies with the services offered by businesses.
Lander suggested implementing technology solutions such as a portal to identify suitable M/WBEs for contracts to tackle this issue.
Secondly, he emphasized the importance of improving subcontracting opportunities, as the city lacks visibility on many of these subcontractors. Currently, only 13% of subcontractors are registered in the city.
Lastly, he highlighted the disproportionate allocation of large construction contracts and services for asylum seekers and the homeless to large, white-owned businesses with substantial financial resources.
According to the report, firms owned by white men received the more valuable contracts, with an average value of $4.6 million for new contracts registered in fiscal year 2023, compared to just $511,000 for M/WBEs.
Lander noted, “The city is doing business with more M/WBEs than it ever did before, but the contracts they get on average are so much smaller that it just still adds up to overwhelmingly white-owned businesses having the vast majority of the value of procurement.”
To enhance inclusivity, he suggested breaking down contracts into smaller components to increase subcontracting opportunities and better align with agency needs.
Lander also emphasized that public-private partnerships could enhance inclusivity in M/WBE contract awards.
He proposed an approach where instead of awarding large contracts to single companies, agencies could promote inclusivity by requiring these companies to include M/WBE partners in their contracts.
When asked about potential legislative efforts to mandate M/WBE participation as partners for contract awards, Lander acknowledged the complexity of the task.
He expressed concerns about the current legal landscape, stating, “Unfortunately, the Supreme Court of the United States is moving in the opposite direction of what we want, and there’s real anxiety that they’re going to actually go the other direction and constrain laws.”
The comptroller suggested that the best way forward would be to amend local laws to require agencies to set participation goals that facilitate the inclusion of MWBE partners in contracts.
