State Defends Progress in MWBE Program as Others Debate Transparency

Although the state's MWBE participation goal has steadily increased over the years, some say it's unclear how its program is being implemented.

Gov. Andrew Cuomo
Gov. Andrew Cuomo

In the minority- and women-owned business community, the talk is typically that the city isn’t doing enough to give them contracts and that the state’s leading the way.

But some elected officials and advocates are pointing out that while the state appears to have a lofty MWBE participation goal—they increased it from 10 percent of state contracts in 2011 to 30 percent in 2014—it is not being transparent about how its goals are being implemented.

The lack of transparency, some say, calls into question the state’s success and even makes it hard to assess—something even the state’s cheerleaders could not deny, though they say the state’s track record of giving MWBEs business and contracts proves the contrary.

In 2014, Cuomo established a 30-percent goal for the percentage of contracts going to minority- and women-owned businesses, after the state reported it had exceeded the 20 percent goal he proposed during his first State of the State address in 2011. The state will be publicly disclosing the latest numbers in a few weeks as its sixth annual New York State MWBE Forum—Oct. 5-6 in Albany—approaches.

Queens State Senator James Sanders, who is considered the father of the city’s MWBE laws, acknowledged that opportunities for those business are increasing. But he wondered whether the goal of 30 percent really applies to the contracts the state is letting out in every field or industry. He’s also worried about minorities and women being put “into a big pot of small contracts and all of you fight over small contracts.”

“The governor has an opportunity to dig deeper and ensure even more justice in New York State by insisting that this has to be done across the board, and then he can be very useful to justice by insisting that making sure that the bills promoting transparency are signed into law or get past the Republican stumbling block,” Sanders said.

So who’s performing better—the state or local city government? Sanders say it’s hard to tell.

“If we use transparency as a criteria, it could be said that the city is going to meet its goals quicker and better than the state,” Sanders continued. “Were the state to accept the same transparency considerations of the city, then we could have a fair measurement of this. But as long as the city is more transparent than the state, you can’t answer that question.”

In a report published last year, the Black Institute—run by Bertha Lewis, a former ally of Mayor Bill de Blasio who has since become a sharp critic—noted that unlike the city, the state has not released any data beyond the split between women-owned businesses and minority-owned businesses. Lewis said an archaeologist is needed to understand the state’s data.  

The city may be doing poorly, she said, but at least Comptroller Scott Stringer audits city agencies. And she said “neither the city nor the state has every gotten near that amount” (30 percent) and that most of the state’s numbers “come out of the MTA and the [School Construction Authority],” she says.

“Things can be true at the same time,” Lewis said. “It is true that the state is better. It is true that the city can learn something. It is true that the city should emulate more but it is also true that the numbers of the city are so abysmal that to say the state is better ain’t saying much.”  

The Empire State Development Corporation, which oversees the MWBE program (most recently in the news for its involvement in the Buffalo Billion and a related criminal indictment), puts out an annual report for every fiscal year that is published on its website. That report includes statistics on the percentage of contracts awarded statewide to MWBEs, total agency and authority spending, and the total dollar value of contracts awarded to MWBEs. It also shows a breakdown of contract utilization by industry as well as a breakdown of MWBE utilization by agency.

In a telephone interview with the Observer, Alphonso David, the governor’s counsel who also oversees the MWBE program, called the accusations of a lack of transparency “ill-informed” and “unfortunate,” telling Sanders and others “to get online.”

In addition to the reports, he said State Comptroller Thomas DiNapoli audits state agencies on MWBEs and noted the state has provided information about different minority groups and has held outreach events all over the state. He says firms are either not aware of or are not taking advantage of accessing the information.

He would not comment on the city’s program because he does not manage it. He said the state will constantly look for ways to improve its own program, but argued the data speaks for itself.

“The data is the data is the data and it shows that we’ve exceeded the 20 percent goal,” he said. “That is a success by any objective measure because that is the goal that was set.”

During fiscal year 2010-2011—when Cuomo first took office—the percentage of contracts statewide going to MWBEs was 10.28 percent. That amounted to $613,790,919 in contracts for minority-owned business and $497,093,519 for women-owned business—out of more than $10.8 billion in total state agency and authority spending.

The percentage of MWBEs getting state contracts increased to 16.67 percent in fiscal year 2011-2012, 21.06 percent in 2012-2013 and then finally 25.12 percent in 2013-2014.

But that changed during fiscal year 2014-2015, as reported by City & State last November. The MWBE participation rate dropped to 23.23 percent, from 25.12 percent the previous year, and total MWBE contract value dropped to about $1.7 billion, from almost $2 billion.

David said the state tracks payments to MWBEs, not contracts executed and said the fluctuation is being exaggerated.

“Those distinctions are marginal,” he said. “If we saw significant drop or increase, then I would say, ‘Yea, that’s significant,’ where we went from 9 percent to 20 percent.”

In 2011, Cuomo announced the creation of a statewide MWBE team that would be headed by former City Comptroller and 2013 mayoral candidate Bill Thompson. That team released a report in 2012 with recommendations, including an improved online reporting system—the New York State Contract System, which is up and running—a streamlined certification process, increased outreach initiatives and a state-sponsored bonding program. David said the team has completed its mission as outlined by an executive order.

Thompson said the governor laid out a vision, made MWBEs a priority from the get-go and ensured accountability from the top down.

“Minority and women-owned businesses who had hoped there would be opportunity, people came away with contracts,” he said. “In the end, that’s gotta be the greatest accomplishment.”

He also said “a lot of us would like to see the city do better,” describing the appointment of Rev. Jonnel Doris as the city’s senior MWBE adviser as the city following the state’s example. (But he admitted it was too early to tell “whether he’ll be successful or not.”)

“I think the city realized in looking at the state and what the state had done that it took commitment from the top and then a person who had oversight,” Thompson said, noting a dedicated person handling the issue helped make an impact. “They knew that person was calling and had the weight of the governor behind him.”

In the estimation of Stringer, the city comptroller and frequent de Blasio foe, “the state is doing better.” He noted during a recent Association for a Better New York breakfast that the city spends $14 billion on goods and services but only 5.3 percent of it went to MWBEs. And he called transparency and how much the state has spent separate issues.

“That’s transparency, not whether actually there’s more of a spend than the state,” he said.

The city shot back at the assertion that Stringer’s audits are what has made it transparent, saying that Local Law 1—the law governing the city’s MWBE program—dictates what the city is required to report, including information underlying its utilization rates.

“Mr. Stringer completely overlooks the 44 percent of city subcontracts going to M/WBEs,” Jessica Ramos, a spokeswoman for the mayor’s office, said. “These represent a huge expansion and point of entry for MWBEs to grow and compete for city business. Moreover, his calculations include billions of dollars for areas ineligible for M/WBE participation, such as awards to nonprofits.”

Rev. Jacques Degraff, chairman of the School Construction Authority’s Diversity Advisory Council, admitted that there is a question as to whether State Comptroller Dinapoli has access to data “so that he could be a third party verifier of the [state’s] assertions.”

He also said the statewide MWBE team had too many elected officials and not enough community members. (David said the state has a series of roundtables with stakeholders—MWBE firms—to which elected officials are not invited.)

Still, none of those obstacles change what he says is widely known: that the “state is moving in the right direction and has been moving each year in the right direction.” He also said the SCA accounts “for a third of the city’s MWBE spend.”

“I believe in trust but verify so let me be clear on that,” Degraff said. “But I also believe that the evidence for the state exists in what I consider market knowledge: that the people who do business with the state, that there are enough people who are in state programs that are receiving state contracts.”

Still, Thompson dismissed the perception of a transparency issue at the state level altogether: he says it’s the city that needs to work on being more transparent—something he said he’s heard from people who want business on the city level.

“I don’t believe that there’s greater transparency on the city level at all,” he said.

State Defends Progress in MWBE Program as Others Debate Transparency