NYC Comptroller Mark Levine found disparities persist in the city’s contracting of certified Minority and Women-owned Businesses (M/WBEs) according to a report released on January 30. He pointed to contract value, rather than procurement rates, as the key issue.
“It’s important to distinguish the number of contracts awarded from the dollar amounts,” Levine told the AmNews. “The number of contracts we award [is] about 200,000 contracts and purchase orders. Overall, about 25% of that does actually go to M/WBEs, and that’s not too far off from our goal of 30%, but the picture is much less positive if you focus on dollar values.”
Levine added that “The $2.4 billion in contracts we awarded to M/WBEs only represent about 5% of total contract awards we’ve made. The disparity is that awards to M/WBE tend to be for smaller amounts. For non-certified firms, the average contract was $3.6 million. For [M/WBE-] certified firms, it was $754,000.”
His report also highlighted a “disparity within a disparity” among M/WBEs themselves. In the already-paltry 5% share, Black- and Brown-owned businesses win significantly less contract value compared to certified vendors owned by white women and Asian-American men. In addition, there is a gender disparity and Native American-owned firms received close to no contracts.
The Comptroller’s Office oversees the city agency contracting process, which provides a window into M/WBE procurement numbers. However, Levine said subcontractor under-reporting means city money will trickle down to certified businesses without any official data. “Even considering that under-reporting, women of color and Black and Latino men are still underrepresented,” he added.
M/WBE certification stems from the Department of Small Business Services and opens the door for NYC-based businesses with at least 51% ownership by a woman or non-white citizen or permanent resident to procure designated contracts reserved for promoting economic equity in the city’s portfolio. For many vendors, city contracts offer reliable revenue in an increasingly unreliable small business environment.
Generally, the comptroller believes the city is making progress, but significant work remains to be done. Levine said the disparities are a “solvable problem.”
The report provides several recommendations, including cutting red tape for M/WBEs to compete for contracts and certifying more minority- and women-owned businesses focused on goods and services already in demand by city government. The comptroller also suggested paying vendors faster and proactively re-upping certifications, which lapse after half a decade.
Levine’s report builds on efforts by his predecessor Brad Lander, who reviewed M/WBE procurement for previous years. Last year, a law passed mandating that the NYC Comptroller’s Office produce these reports each year. For the new comptroller, the findings set the tone for tackling “deeply personal” economic opportunity issues dating back to his time teaching in the South Bronx.
“This is a major challenge that I am going to address as comptroller,” said Levine. “I want the people who get contracts from [the] city government to better reflect the diversity here, and I want to use the tools that my office has at its disposal to move us forward.”