Comptroller Brad Lander speaks at the 190th CityLaw Breakfast. Image Credit: CityLand.
On February 14, 2024, New York City Comptroller Brad Lander released the Annual Report on M/WBE Procurement which found that the City fell short of ensuring equitable distribution of contracts with Minority and Women-Owned Business Enterprises (M/WBEs). The report takes into consideration a review of contract registration data from the City and analyzes M/WBE contracts based on procurement method, dollar value, and industry. The report examines city agencies’ use of the M/WBE Noncompetitive Small Purchase method (NCSP) which directs discretionary contract opportunities to the M/WBEs.
Some of the key findings from the report include:
- M/WBEs secured only 5.3 percent of the roughly $40 billion of new City contracts and Purchase Orders (POs) registered in FY 2023, compared to 5.2 percent in FY 2022.
- Black M/WBEs represented only 1.16 percent of registered value contracts and POs subject to LL 174 goals, Hispanic M/WBEs only 0.96 percent, and women-of-color combined only 1.03 percent
- Only about 20 percent of all City-certified M/WBEs secured a contract, PO, or approved subcontract registered by the City in FY 2023.
- More than half of contracts awarded to M/WBEs are registered late, posing a significant challenge for smaller firms without sufficient working capital.
The report used a weighted performance metric to evaluate agencies compared to their peers with similarly sized procurement portfolios. This evaluation showed that the top performers were DEP, DHS, and the Law Department while the lowest performers were DOT, DCAS, and DOF. The most improved agencies from FY22 were OTI, DHS, and the Law Department. Additionally, the report concluded that despite new legislation allowing agencies to use NCSP’s to make procurements up to $1 million, agencies were not doing so. Further, master agreements given to M/WBEs were less likely to be used than those given to non-certified firms.
Since last year improvements include more prequalified lists, using best value procurement, higher dollar use of M/WBE NSCP, directing micro-purchases to M/WBEs, updating training and guidance to agencies, and making relevant dates more available. Progress was lacking when looking at the reform to the subcontracting process, validation of commodity codes to agencies to find the right M/WBEs or improving the timeliness of contract registration.
The Fiscal Year 24 report recommends that the Administration take steps to improve including streamlining connections between M/WBEs and agencies, surveying underutilized firms, strengthening goal-setting procedures, support, and oversight, and increasing the utilization of M/WBE subcontractors in human service contracting.
To read the full report, click here.
Comptroller Brad Lander said, “M/WBEs deserve their fair share of City contracts, yet this year’s disappointing numbers fall woefully short of where we need to be. The Adams Administration has taken steps to improve equity in City contracting – but the data tells a story of how far there is to go. We offer detailed recommendations for streamlining connections between the City and businesses seeking contracts, being more diligent about setting and monitoring goals, and transforming the way contractors – especially in human services – utilize M/WBE subcontractors. With stronger management and coordination, we can reverse these unacceptable trends and move toward fairness in City contracting.”
Council Speaker Adrienne Adams said, “Expanding equitable opportunities for our city’s Minority and Women-Owned Business Enterprises (M/WBEs) is critical to the success of our communities. While the City has made progress to increase contracting with M/WBE firms, it is clear that more work is needed to reach targeted participation goals. It will be important for all partners in government to continue working together to confront the challenges facing M/WBEs and ensure they have the necessary resources and support to thrive.”
Council Member Julie Won said, “According to the Comptroller’s report, it is abundantly clear, businesses owned by women of color win significantly fewer, less-valuable contracts. Only a combined 1 percent of the value of contracts and purchase orders subject to Local Law 174 participation goals were registered to businesses owned by Asian American women, Black women, or Hispanic women. Male-owned MBEs account for nearly 8 times the count of registered contracts and purchase orders than women-owned M/WBEs — proving that City Contracting is still an ’old boys club’. As Chair of Contracts, the Council in partnership with the Comptroller will continue to call for increased transparency in M/WBE utilization data since the Mayor’s office’s last disparity study analyzing M/WBEs dates back to 2018 using fiscal year 2015 contracts data. The lack of effort from the Mayor’s office to complete disparity studies indicates a total disregard to grant business opportunities equitably for M/WBEs.”
By: Meg Beauregard (Meg is the CityLaw intern, and a New York Law School student, Class of 2024).
New York City Comptroller: “NYC Comptroller’s Annual M/WBE Report Shows City Agencies Continuing to Fall Woefully Short of Needed Progress” (Feb. 14, 2024).
Note: Comptroller Lander spoke at a recent CityLaw Breakfast on February 15, 2024. To watch that breakfast, click here.