With the share of New York City agency contracts awarded to minority- and women-owned business enterprises lagging behind city goals, a new report from the city comptroller’s office lays out steps needed to improve procurement processes for more equal participation.
Prime contracts for construction and other services awarded to M/WBE firms in 2022 accounted for just 15.86% of overall value of city contracts subject to participation goals, according to the report. Nearly 40% of construction contracts went to those companies but they represented only 9.35% of the value of eligible construction contracts, or $379.3 million.
Woman-owned firms received a particularly slim share of construction work, 3.3% of contracts representing just 0.16% of contract value, the report states.
Calling the findings “abysmal," Comptroller Brad Lander said that “increasing contracting and spending with businesses owned by people of color and women is critical to building a more equal city.”
For construction contracts, the city charter sets contracting participation goals of 12% of expenditures to firms owned by Black Americans, 11.1% to those owned by Asian Americans, 17.95% to those owned by Hispanic Americans, 0.56% to firms owned by Native Americans, 25.66% to firms owned by women and 6% to emerging business enterprises. The aim is to promote equal opportunity in city procurement, the charter states. New York first launched its M/WBE program in 1992.
To better match participation goals, the report recommends wider adoption of M/WBE prequalified lists and the use of “best value” procurement practices to direct higher-value contracts to eligible firms. City officials should also raise the threshold for noncompetitive small purchases so agencies can target M/WBEs for discretionary purchases, the report said. It also calls for reform of subcontracting processes and integrating them into the city’s PASSPort online procurement platform. The comptroller also called for improved data maintenance so agencies can find M/WBEs and make reforms to reduce barriers in contracting.
Nayan Parikh, president of the National Association of Minority Contractors' New York tristate chapter, called the current M/WBE participation in city contracting “deplorably low.” He said the group is working with the comptroller’s office to increase participation, and that member firms are working to implement mentorships and programming.
“There is ‘best value’ to be had when all members of the city participate,” said Cheryl McKissack Daniel, president and CEO of McKissack & McKissack, the oldest Black- and woman-owned design and construction firm in the U.S., in noting the recommendations by the comptroller’s office.
In a statement, New York City Mayor Eric Adams said agencies will need to provide more regular updates on efforts toward meeting M/WBE goals. The city has already taken several steps over the past year to improve participation.
The Dept. of Design and Construction—which was recently named 2023 ENR New York Owner of the Year—established the city government’s first M/WBE-only prequalified general contractors list. Officials also increased transparency in PASSPort to better track M/WBE spending and subcontracting requirements.