NYC Shame: City Spends 4% of $18 Billion With Ethnic Minority and Women Owned Businesses

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Comptroller Stringer

[Publisher's Commentary]

It's no secret that New York City which describes itself as one of America's most liberal and ethnically diverse city has a very shameful track record when it comes to how it allocates the $18 billion it spends with vendors and contractors every year.

In the last fiscal 2014 year that ended June, of $17.8 billion spent by the city government, only 3.9% of that money went to companies that are owned by ethnic minority groups and women, a report released this week by NYC comptroller Scott Stringer shows.

This is beyond ugly.

Stringer on Wednesday delivered on a promise he made when he was a candidate; to issue a report that evaluates the diversity of the vendors' pool that the City's agencies spends billions of dollars with on contracts for construction, goods, professional services and standard services. 

The comptroller's report examined 32 city agencies, including the comptroller's own office. The report, "Making the Grades" awarded an 'F' or 'D' grade to two-thirds of the city's agencies. Nine agencies received a 'C', including the comptroller's office. Only two agencies received a 'B' grade, the department of cultural affairs and the Landmarks Preservation Commission.

The scoring system was based on weighed variables leaning towards how each spending spent its budget. So, for example, if a given agency spent 50% on construction, then 50% of its grades would be based on how it spent with ethnic minority-owned and women -owned firms in construction.

So even though New York City has over 400,000 certified ethnic minority-owned businesses and 300,000 women-owned firms the city's procurement dropped from 5% in fiscal 2012 to the current 3.9% mark, the report found.

"It is unacceptable when not a single city agency can meet the standard set forth by our own laws," Stringer said. "We need to take concrete steps to make sure that every company has an equal opportunity to compete to do business with the city. All agencies, and my office, must redouble efforts to help ensure our city's economic future."

Stringer hopes the City more than triples the current spending rate with ethnic minority and women-owned firms and said this was a major way to address "income inequality" in the city. 

"You do the math," he said, at a press conference when the report was issued. He said it would also translate into jobs in Black and Latino neighborhoods where unemployment is currently very high. Stringer called improving the targets an "economic and social justice issue."

According to the 2010 census, New York City's ethnic composition is: 33% non-Hispanic White; 29% Hispanic; 23% Black; and, 13%. Non-Whites make up 65% of the population.

Mayor Bill de Blasio said the comptroller's report was "another example of taking primarily older data, and assessing it.."  

He did acknowledge the city's woeful record but said it's something his new administration which took office in January has already started to turn around and promised to exceed the performance of past city governments.

"I would agree that the past performance was unacceptable, but I think if you're talking about January 1st to present, you see the beginning of a new approach," the mayor said.

"We have 641 MWBE firms that have been certified in the first nine months of the year. That's a much faster pace than before. You're going to see a lot more of that happening. Maria Torres, our Small Business Services commissioner is particularly devoted to this mission, and plays a crucial role in that certification process."

De Blasio also said, "Maya Wiley, my counsel, is leading our overall effort to update and strengthen our MWBE policy. So, we are very confident you're going to see a sea change when it comes to the approach to MWBE compared to not just the previous administration – the previous two administrations."

Here's hoping the mayor exceeds the goal he's promised by the time Stringer issues his second report next year.  

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