Expert Roundtable: Minority- and Women-Owned Businesses

ALPHONSO DAVID
Gov. Andrew Cuomo’s Deputy Secretary for Civil Rights

Q: How do you view the current status of the state’s M/WBE programs and progress toward meeting the 20 percent goal?
AD: I think we’re on the right track. The governor is very committed, and has made sure we’ve been focused on this. In terms of achieving the goals, we’ve removed a lot of barriers. I’ll just tick off a few things we’ve done. We implemented a state-of-the-art electronic monitoring and compliance system. So what does that mean? Essentially it’s an online system that provides small businesses with a one-stop shop, and it streamlines and simplifies how they can identify and access business opportunities. So an M/WBE firm that’s interested in doing business with the state no longer has to search 50,000 different websites to figure out what the contracting opportunities are in the state. An M/WBE firm can now obtain certification online, whereas before they had to file reams of paper to obtain certification. They no longer have to do that. They can do it all online. We can also now search with more efficiency our utilization of how well we’re doing in certain industries. We want to make sure that we are working with M/WBEs of every single industry, and this system will allow us to track where we’re doing well and where we need to improve.

Q: What other steps have you taken?
AD: We’ve also increased the pool of certified M/WBEs by creating a one-stop application. We heard in the past [that] if you’re certified with New York City, it didn’t mean you were certified with New York State. Now if you go to New York City and you apply for certification, there’s a one-stop application, and you fill it out, and you can get certified with the state and the city. It’s the same thing with the Port Authority of New York and New Jersey. We heard that people obtained certification with the Port Authority and thought they were certified with the state, but they weren’t. So now, if you’re certified with the Port Authority, you’ll be certified with the state.

Q: How do you hold contractors accountable?
AD: We implemented model M/WBE language, which is the first of its kind, where one of the concerns we had is sometimes contractors make a representation that they will get to the 20 percent, and they didn’t get to the 20 percent goal, or the 10 percent goal, or whatever the goal was. And the agencies had no tool to actually hold the contractors accountable. Sometimes they made representations that they weren’t following through. So now we have contract language in all of our RFPs, in all of our contracts, that holds those contractors responsible. We’ve also done a lot of outreach events. A lot of M/WBE firms say they’re not really aware of where all the contracting opportunities are. We’ve done more than 200, and we also held the
M/WBE conference this year, the largest in the state’s history. Seventeen hundred people came this year. I think we’re removing all of those barriers we heard about, which is, “I can’t get access to government, I can’t get bonding opportunities, I don’t really know what the opportunities are, it’s really difficult for me to obtain certification.”

Q: There’s some disparity between black and Latino firms and women-owned firms, which are generally doing better. How do you address that?
AD: I think we have to recognize what the demographics are. Women account for the largest segment of the population, so it would make sense to have more women certified as M/WBE firms than you would male-owned firms. Also, with respect to Latino vs. African-American firms, you also just have to look at the census data to realize that historically we’ve had more African-American-owned firms certified than Latino firms, but I think you’ll see that changing with the census data. The more individuals who are Latino who own businesses, and they obtain certification, I think we’ll see those numbers go up.

Q: Is there a time frame for meeting the 20 percent goal?
AD: What we’re doing now is just recognizing that we will see some increases in utilization as we move forward. We have not specifically outlined a specific date, but the governor did pledge to increase M/WBE participation in his first State of the State address, and we’re working at all levels to make sure that we achieve that goal.

Q: What else should potential M/WBE contractors know?
AD: On the surety bond program, I just want to incentivize companies to take advantage of that program. We’ve heard that one of the most significant challenges that small businesses face is obtaining credit, and we wanted to eliminate that barrier, so we created this new program. It’s online through the ESD website.

CHRISTINE QUINN
New York City Council Speaker

Q: How significant are minority and women business enterprises to the growth of New York City’s economy?
CQ: Very. When we improve opportunities and build capacity for M/WBEs, we are creating a level playing field that helps develop and grow companies that provide jobs, spur economic growth and diversify our economy. Plus, we get more competition for city contracts, which means lower prices and increased quality.

Q: You have announced an agreement between the Council and the Bloomberg administration to increase M/WBEs in the city’s contracting process. Introduction 911 would facilitate that new program. When do you believe that legislation will be passed into law?
CQ: Soon, in the very near future.

Q: The current law limits M/WBEs to a $1 million cap. The new legislation removes that limitation. How profound will that change be to increasing business for that community?
CQ: Incredibly. The $1 million cap literally left billions of dollars on the table as agencies entered into their larger contracts outside of the M/WBE program. Now the sky is the limit in terms of the size and number of contracts that can be counted toward M/WBE goals. Given all of the M/WBE firms that have the capacity to do the work, we are talking about real dollar improvements to the program. Just by removing this cap, we will more than triple the total value of program-eligible contracts. Not only that, but the bill broadens the ways that M/WBEs can participate, so there will be far greater opportunities available for M/WBEs to receive contracts.

Q: For years the City Council has released reports detailing the rather poor track record when it comes to involving M/WBEs in many agencies’ contracting processes. How do you believe the new legislation will address this problem?
CQ: A law is only as good as its enforcement. The program cannot work if agencies are not doing what they are supposed to do to meet the goals. So with this bill we create a system to hold agencies’ feet to the fire: a program I proposed a few months back called MWBEStat. As with NYPD’s very successful CompStat model, under MWBEStat agency officers will have to meet every quarter with someone who reports directly to the mayor and detail their progress—or lack of it—toward meeting their agency’s M/WBE goals. They will be held accountable for their failures and asked to share the strategies behind their successes. Two additional accountability measures will also significantly bolster the effectiveness of the program. First, the bill will require more frequent and more detailed public reporting of agency progress toward M/WBE goals. Second, any agency that fails to meet M/WBE goals must publish a performance improvement plan outlining the specific steps it intends to take to increase M/WBE participation. With quarterly MWBEStat meetings and public reports, agencies will be kept on their toes and the city will be well positioned to step in early to take corrective action for agencies that may be struggling.

Q: If you become mayor, who would those commissioners be responsible to?
CQ: Whoever becomes the next mayor should go even further and appoint a chief diversity officer who would, among other duties, administer MWBEStat and oversee the M/WBE program.

Q: The state already has a chief diversity officer. How would one help the city?
CQ: M/WBEs consistently raise concerns that highlight the need to designate an officer whose primary focus is the M/WBE program. We hear that M/WBEs don’t know how to get the contract. Or they bid on a contract they know they should have won, but for some inexplicable reason they didn’t. Or they got the contract but the city has taken ages to pay them. If we had a chief diversity officer in the mayor’s office, people would have someone to call. If every city agency reported specified M/WBE statistics on a regular basis to a chief diversity officer, we wouldn’t have to wait to hear about problems with the program. We would have a high-ranking city official with the mayor’s ear who is on top of M/WBE issues, critically examining and improving the program as a matter of course.

Q: The use of “fronts” is cited by both mainline firms and legitimate M/WBEs as a problem. How do you believe this new law would solve that issue?
CQ: The law requires the city’s Department of Small Business Services to set standards for precertification site visits. As the city improves its audit function to certify firms, it deters fraudulent companies seeking to abuse the M/WBE program.