NYC Earns F-Grade for Dismal Spending With Black-owned Businesses; Also, All MWBEs Got Mere $1 Billion Of $20.5 Billion, Says Comptroller Stringer's Report

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Photo: By Thomas Good-Original work. Wikimedia Commons
 
In fiscal year 2019 the City of New York earn a failing F-grade in the level of business it conducted with Black-owned companies, and out of a total $20.5 billion spent minority and women-owned business enterprises (MWBEs) got a mere $1 billion, this year's "Making the Grade" report, by comptroller Scott M. Stringer, reveals. 
 

Out of $6.3 billion of all spending that was eligible to go towards MWBEs, $62.3 million went to African American owned businesses -- less than 1%.

The comptroller's first-of-its-kind survey of more than 550 MWBEs showed that they face barriers to competition when navigating City contracting–including unresponsive City agencies, opaque procurement processes and exclusionary contract language. 

 
The challenges that remain cloud the report's finding that the City earned its first passing C-grade after four consecutive years of D+ grades on the comptroller’s “Making the Grade: New York City Agency Report Card on MWBEs” report. The City earns 
 
“If we want a strong economy with real, local community wealth creation, we need an inclusive economy," Stringer said, after the report was released today. "That’s why my office proposes recommendations every year on how the City can level the playing field and increase access and opportunity for MWBEs. Accountability leads to improvement, and while today’s report indicates modest progress by the City, we cannot rest on our laurels until all City agencies make the grade. We know that there is more work to be done to dismantle the systemic barriers MWBEs face when navigating City procurement and contracting. We must do more to ensure that the MWBE community has the tools, resources, and capacity to compete and thrive in our economy.”
 
“Making The Grade” assesses 32 City agencies–and the City overall–on progress in spending with minority and women-owned businesses and is a diagnostic tool for agencies to improve performance and transparency in M/WBE spending, increase competition in City procurement and save taxpayer dollars.
 
Highlights in the 2019 “Making the Grade” report include the following gains in addition to the C-grade:
 
[] The City spent $911.9 million with MWBEs in FY 2019, an additional $180.8 million from FY 2018.
 
[] 30 out of 32 agencies improved or maintained their grades from last year.
 
[] 92 percent of the City’s top 50 competitive contracts, about $1.7 billion, had MWBE goals. 
 
These are the problem areas highlighted in the report:
 
[] Ten agencies spent less than one  percent  of  their  budget  using  the  M/WBE  Small Purchase Method: the Department of Housing Preservation and Development, Department of Environmental Protection, Department of Transportation, Department of Parks and Recreation, Department of Citywide Administrative Services, Department of Homeless Services, Department of Sanitation, Human Resources Administration, Department of Design and Construction, and the Landmarks Preservation Commission.
 
[] Two of the City’s largest contracts registered in FY 2019 were not assigned goals. These contracts were held by the Department of Information Technology and Telecommunications and the Department of Social Services (made up of the Departments of Homeless Service and the Human Resources Administration).
 
[] There is significant room for increased spending with every minority group. The City earned a B-grade on spending with Asian American-owned businesses and a C- grade with Hispanic American-owned businesses. It maintained its D-grade with women and its F-grade with African American-owned businesses from FY 2018.
 
[] The City awarded $20.5 billion in contracts in FY 2019, of which only $1.007 billion (equal to 4.9 percent) were awarded to M/WBEs.
 
[] 17 percent of City-certified M/WBEs received City payments in FY 2019, a decrease from 20 percent in FY 2018 due to an expansion of more than 2,000 firms in the M/WBE program.
 
[] Each year, this report also puts forth recommendations meant to reduce barriers and increase access to opportunities for M/WBEs. The Comptroller’s Office conducted a survey of over 550 M/WBEs to help inform these recommendations. Survey findings included:
 
[] 82 percent of respondents expressed the need to improve criteria on how vendors are selected for City work.
 
[] 69 percent of respondents found agencies unresponsive when they reached out to Agency Chief Contracting Officers, MWBE Officers, or other related liaisons with meeting requests, phone calls. As a result, 75 percent of respondents stated that agency responsiveness needed some or major improvement.
 
[] 38 percent of respondents who did not compete for contracts were not aware of procurement opportunities and said the process was too time consuming and hard to understand.
 
[] More than 80 percent of respondents that served as prime vendors/subcontractors waited more than 30 days to be paid for their first invoice on average.
 
Comptroller Stringer's report offers a series of recommendations, including:
 
[] The City should require agencies to conduct market analyses and address solicitation language that creates unnecessary barriers to competition.
 
[] The City should conduct a workforce disparity study and create a workforce diversity program.
 
[] The City should expand the role of MWBE Officers to serve as advocates for MWBEs and to address agency responsiveness and contracting issues.
 
 
To full report is available online
 
 

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