A paltry 2% of New York City contract dollars went to Black- and Latino-owned businesses in fiscal year 2022, according to a report issued by New York City Comptroller Brad Lander.
This shocking statistic comes even though both the city and state of New York have in the last few years been national standouts in terms of awarding a greater number of contracts to minority and women-owned businesses (M/WBE).
Running a business anywhere is a challenge, and New York City can be a particularly difficult location to have to try to pay rent, hire employees, and develop sellable products. The opportunity to win a contract and provide billable services to the city can be a lifeline for local businesses. But Black- and Latino-owned businesses have long been locked out of this taxpayer funded network of services for the city.
Lander’s Annual Report on M/WBE Procurement notes that “despite many efforts in recent decades, the city of New York has historically procured goods and services overwhelmingly from businesses owned by non-certified firms, including white men. The city’s procurement process and systems have historically fostered an inequitable landscape that requires M/WBEs to jump higher over bureaucratic hurdles only to earn lesser returns.”
His report found that while companies owned by Black, Latino, and Native American people, as well as Asian American women, received less than 2% of contracts in 2022, 70% of M/WBE contracts were awarded to firms owned by white women or Asian American men. Even when M/WBEs received contracts, the average value of the work amounted to $670,000––eight times smaller than the $5.01 million average contract awarded to a non-M/WBE certified firm. And the report found that, “When M/WBEs do receive contract awards, they are not paid on time. Approximately 55% of M/WBE contracts registered in FY22 were retroactive, worse than the citywide rate of approximately 52%. This is a particular challenge for smaller firms without sufficient working capital to endure long wait times for payment.”
The Mayor’s Office of Minority and Women-owned Business Enterprises (M/WBE) was created to tackle the problem of systemic racism in city awarded contracts. The city even recently passed Local Law 174 (LL 174), which requires city agencies to audit their use of contracts with M/WBEs. And yet Lander’s report finds that even when businesses were certified as M/WBEs with the city, they were granted less than 18% of city-certified contracts, purchase orders, or approved subcontracts.
According to the latest Census, Black New Yorkers make up 23.4% of the population, Latinos are 28.9% and the Asian population sits at 14.2%. As of 2021, New York City counted
223,015 Black or African American-owned businesses.
Bertha Lewis, founder and president of the The Black Institute (TBI), told the AmNews: “Actual progress cannot be achieved if we ignore and perpetuate systemic inequality in our contracting and procurement processes. To call ourselves a truly progressive city, we must ensure that Black and brown businesses have a fair and equal opportunity to compete for and win contracts. The M/WBE report from Comptroller Lander is outrageous. The problem has grown progressively worse from Mayor Koch all the way up to Mayor Adams.”
Adams has appointed Michael Garner, the former chief diversity and inclusion officer with the Metropolitan Transit Authority (MTA) to serve as the chief business diversity officer with the city. Garner’s job will be to ensure that more city contracts are awarded to M/WBEs.
“This administration has placed economic equity front and center as the city recovers economically and emerges from the pandemic,” Amaris Cockfield, the deputy press secretary at the New York City Mayor’s Office, told the AmNews. “Earlier this year, Mayor Adams established ambitious new OneNYC goals for total M/WBE spending and signed an executive order—to address the ‘disparity within the disparity’ and to appoint Michael Garner as chief business diversity officer of the Mayor’s Office of Minority and Women-owned Business Enterprises—all in an effort to truly build out support systems and create new opportunities for M/WBEs in New York City. And while city agencies and authorities awarded $6.5 billion in contracts to over 1,800 unique M/WBE firms last year and more than a quarter of eligible contracts were awarded to M/WBE firms in the first three-quarters of this administration—both historic highs—we recognize there is much more we can do to build a more equitable city.
That’s why Mayor Adams has already made it clear to city agencies that they will be required to provide more regular updates on how they are progressing to meet their M/WBE goals. We appreciate the recommendations in this report, and still recognize we have a long way to go on the road to increasing access for groups that have been persistently and negatively impacted by procurement inequities.”
TBI’s Lewis commented, “Appointing Michael Garner as the chief business diversity officer is a step in the right direction toward addressing the longstanding issue of diversity and equity in our city’s contracting practices.”
He added, “It is encouraging to have someone we can hold accountable in this role finally. However, we must ensure that his appointment is not in name only and that he is given the resources and support needed to make real change. The Black Institute has been calling for someone to be in this role for years, and we hope that this administration takes this issue seriously and works towards a more equitable and inclusive city for all. The chief has a lot of work to do, and we will be watching.”