New York City Says It Has Awarded $1 Billion in Contracts to Minority and Women Firms

The city announced its 5,000th certified minority- and women-owned business enterprise in the Bronx today. Madina Toure/Observer

The city has awarded more than $1 billion in contracts to minority- and women-owned businesses and enterprises for the first time — a year after Mayor Bill de Blasio unveiled a new vision that included a 30 percent MWBE participation goal as well the first-ever MWBE office.

In September 2016, de Blasio announced that the city would aim to award at least 30 percent of the dollar amount of city contracts to MWBEs by 2021, which would include prime and subcontracts with mayoral and certain non-mayoral agencies. The vision also included a new MWBE office and doubling the number of MWBEs certified by the Department of Small Business Services from 4,500 to 9,000 by 2019. The mayor also named Deputy Mayor of Strategic Initiatives Richard Buery — who previously oversaw his Pre-K For All initiative — as the city’s new MWBE director and appointed Jonnel Doris, the city’s senior MWBE adviser, as the head of the MWBE office.

At the end of May, the city said that it certified 5,000 MWBEs — an increase of 500 since the mayor announced his vision. As of Friday, the city has certified 5,122 firms.

“This is historic in the sense that this is the most we’ve done,” Doris told Observer at an MWBE certification event in Washington Heights on Friday morning.

He attributed the latest development to the Contract Financing Loan Fund that the city launched earlier this year that allows MWBEs to borrow up to $500,000 from the city at a maximum 3 percent interest rate if they do not qualify for funding from other sources. He also pointed to the retooling of the city’s capacity-building programs as well as the MWBE certification program at SBS, noting that the city reduced the amount of paperwork involved in the process.

Doris also said that every agency provides the mayor with a report on its progress in terms of awarding contracts to MWBEs and that the city increased its outreach and added more staffing and resources at SBS.

“We’ve certified more businesses,” he continued. “That means more opportunities are coming. That means more MWBEs can partake in the procurement process. That means more MWBEs can get contracts.”

The mayor said he wants to award $16 billion in contracting opportunities to MWBEs by 2025 — a deadline that extends past the end of his tenure, even if he wins a second term in the November general election. As of the end of fiscal year 2017, the city has awarded $6 billion of that goal.

At the end of the second quarter of fiscal year 2017, the city’s prime and subprime utilization rate was 18 percent. In fiscal year 2016, the utilization rate was 14.3 percent — an 8 percent increase from fiscal year 2015. During FY 2016, the city doled out roughly $700 million in prime and subcontracts to MWBEs, compared to $460 million during the last fiscal year.

In June, the state Legislature passed a bill that allows the city to give out  $150,000 to MWBEs without a competitive bidding process. That legislation was sponsored by Upper Manhattan State Senator Marisol Alcantara, a member of the Senate Independent Democratic Conference, a group of breakaway Democrats caucusing with Senate Republicans, and Queens State Assemblywoman Alicia Hyndman.

The legislature also passed legislation that removes a requirement that MWBE owners have a net worth of less than $3.5 million in order to receive state certification. Brooklyn Assemblywoman Rodneyse Bichotte, who chairs the Oversight of Minority- and Women-Owned Business Enterprises Subcommittee, and Republican State Senator Patty Ritchie, sponsored that bill.

The city also marked the one-year anniversary of the opening of the MWBE office.

“Coming in, we already knew that this was a priority for the mayor,” Doris said. “The fact that I was there, I knew it was a priority for the mayor … I feel like we have come such a long way.”

But he said that there are still some provisions that have not yet been passed in Albany and acknowledged that some MWBEs continue to face challenges in getting contracts.

The city has noted that there are tools and resources to which the state has access that the city does not that could help it better meet its goals.

“We’ve done so much in one year but certainly there’s much more to be done,” he said.

De Blasio has often clashed with City Comptroller Scott Stringer and advocates such as his one-time ally Bertha Lewis, head of the Black Institute, over the city’s progress. They have argued that the city is not moving fast enough in awarding contracts and prefer that the city have a full-time chief diversity officer. But Stringer has said that the city has made progress.

While some advocates and elected officials have reported some progress following the mayor’s new approach, others have said they are not yet experiencing any changes.

New York City Says It Has Awarded $1 Billion in Contracts to Minority and Women Firms