The city Department of Small Business services is letting nonwhite and female business owners learn from million-dollar companies how to better secure private contracts.
The 28-week Corporate Alliance Program/Entrepreneurs’ Organization initiative is taking applications from so-called minority- and women-owned business enterprises interested in learning from established entrepreneurs in supportive mentorship groups. Participating companies can come under the categories of professional services firms (like advertising or marketing), accounting and legal, standard services firms firm (such as janitorial or building maintenance), catering and security services and goods firms (everything from information technology equipment to office supplies to energy-saving light bulbs).
“Mayor de Blasio has made an historic commitment to minority and women owned businesses and this mentorship program builds upon that success,” Small Business Services Commissioner Gregg Bishop said in a statement. “Minority and women owned businesses face unique challenges and this program will connect budding entrepreneurs with the tools and expertise they need to build and sustain a successful small business.”
The MWBEs are required to have been in operation for a minimum of three years, have a record of consistent growth for the past two years, employ at least one person besides the owner and show an annual revenue between $150,000 and $800,000 and a business plan or company profile. The deadline to apply for the program is January 27.
To create the mentorship program, SBS partnered with the New York chapter of the Entrepreneurs’ Organization—a global membership-based networking organization whose members are skilled entrepreneurs making at least $1 million in revenue—and the Corporate Alliance Program, an alliance between SBS and 14 corporate partners. Those corporate partners are Accenture, American Express, BNY Mellon, Capital One, Citi, Colgate-Palmolive, Columbia University, Con Edison, Goldman Sachs, IBM, Interpublic Group, National Grid, NYU and Skanska.
In 2011, Skanska, one of the city’s biggest general contractors, entered into a non-prosecution agreement with U.S. Attorney Preet Bharara in which it agreed to pay $19.6 million—half to the U.S. Department of Transportation and the other half to the Metropolitan Transportation Authority—to avoid prosecution for allegations it lied about its hiring of MWBE subcontractors for some of New York’s biggest projects, including the Fulton Street Transit Center. The company did not admit any wrongdoing.
MWBEs will participate in groups of up to three firms, supervised by a mentor—and all mentors are part of Entrepreneurs’ Organization’s New York chapter. Mentees will be asked to provide a list of goals based on their business’ challenges and work with their mentor and the other members of their mentorship group to meet their goals throughout the duration of the program.
Participants also participate in learning seminars presented by executives from the CAP corporate partner organizations on pertinent business topics. Mentees have to attend at least two of the seminars and one mandatory learning session on corporate procurement.
SBS also announced a schedule for workshops available to MWBEs for the first quarter of 2017 on MWBE certification, selling to government and locally-based enterprise certification.
The mentorship program is part of a Mayor Bill de Blasio’s larger plan to allocate 30 percent of city contract funding to MWBEs by 2021. Last month, SBS announced that starting sometime between January and February, MWBEs will be able to borrow up to $500,000 from the city at an interest rate no higher than 3 percent if they are not eligible for funding from other sources.
Currently, MWBEs can borrow up to $125,000 and the interest rate oscillates between 6 percent and 9 percent. And by mid-2017, the agency will have a new bonding capital program.
SBS also has an eight-month NYC Construction Mentorship program in conjunction with SBS specifically for city-certified MWBE—or eligible to be certified as such—construction or trade firms looking to sell to New York City. The program helps connect firms to and prequalify for contracting opportunities with the city’s Department of Design and Construction, the Department of Housing Preservation and Development and the Parks Department.
In fiscal year 2016, DDC accounted for just 11 percent of the city’s procurement but made up 41 percent of the prime contracts awarded to MWBEs and a full 62 percent of the subcontracts awarded to MWBEs.
And in November, HPD announced that effective January 1, affordable housing developers have to commit at least 25 percent of costs supported by HPD to certified MWBEs.
The mayor has established an objective of granting $16 billion in contracts to the long underrepresented and marginalized firms by 2025 and to double the number of certified and re-certified MWBEs at SBS from 4,500 to 9,000 by 2019. The mayor selected Rev. Jonnel Doris to serve as the city’s senior MWBE adviser in July.
The city’s MWBE program has been a source of tension between the mayor and Comptroller Scott Stringer. In his annual MWBE report card in October, Stringer gave the city a D+ on spending with MWBEs for the second year in a row, noting that it spent $15.3 billion on goods and services but only 4.8 percent went to MWBEs—a decrease from his report the previous year that found that only 5.3 percent of $14 billion went to MWBEs, which he had noted at an Association for a Better New York breakfast.
Deputy Mayor Richard Buery, whom de Blasio has put in charge of the MWBE initiative, disputed Stringer’s findings at the time.