Garner, who previously worked in management at the New York City School Construction Authority and the New York City Housing Authority, talked with City & State about the MTA’s new approach and ambitious goals. What follows is an edited transcript.

Michael Garner, MTA chief diversity officer. Photo by Andrew Schwartz.

City & State: What kinds of programs prepared you to launch this one?

Michael Garner: We awarded a record number of contracts to minority- and women-owned businesses at the School Construction Authority by bringing in small-business programs that dealt with issues that the small contractors were in fact facing, like prime contracts, access to capital, access to training and access to surety bonding. Once the MTA found out about that model, they asked me: Would I be willing to come to the MTA?

C&S: What at the MTA can address those issues?

MG: Most small contractors, and especially the smaller women- and minority-owned contractors, face four issues that are barriers to entry. One is the access to capital, so we have a loan program that is geared to small businesses. Once a contractor wins a contract, they can apply for a loan. Also, most small firms, they don’t have the resources to bid on larger projects—and a small contract at the MTA sometimes is $35 million, $45 million. So we go through an exercise of debundling larger projects so the smaller contractors can bid to us as prime contractors. We have a training program in which we train contractors to be better contractors and how to do business the MTA’s way. Then we have a surety-bonding program in which we’ve hired the nation’s largest insurance company to work with our contractors in obtaining bonding. Most of all, we are paying these contractors in five days.

C&S: How do you train firms to learn how the MTA works?

MG: Any firm that has been admitted to the program, they are mandated to take our nine courses—safety, scheduling, how to do business at the MTA, how to finish out contracts on time, safely and on budget. And then they can begin the process of bidding on those projects. There are various training programs out there, but this program leads to contracting opportunities.

C&S: How do you measure the success of this program?

MG: The MTA is doing this program as an investment. We are creating a larger pool of diverse contractors who can finish our work safely, timely and on budget. And so the more contractors or the more sources you have bidding your work, it brings a downward spiral on pricing. We’re not viewing it as an expense but we’re viewing it as a long-term investment.

C&S: How did your conference linking bus suppliers and vendors work?

MG: Historically our bus and subway manufacturers have asked us to waive the MWBE goals because they claimed that they could not find qualified firms to help them. For the first time in history we brought all of our bus manufacturers here. They brought sample buses, and there were 135 minority- and women-owned firms. We basically told our bus manufacturers that we are going to increase contract awards to New York State-certified MWBE firms. We’re sending a very, very strong message that we are going to do business in a different manner.

C&S: What feedback did you get?

MG: It was great feedback, not only from the firms but also from the bus manufacturers. They were saying they could not find qualified firms. To bring these firms into one place, it was great for them as well. The [Federal Transit Administration] was here, because they want to mimic what we’re doing at the MTA nationally.

C&S: It’s interesting that all it takes is bringing everybody together in one room.

MG: Government, we’ve failed in the past because we’ve gone out, certified firms and brought the firms back to the agency with nowhere to go. We’re now changing that whole paradigm. We’re building programs first and then we’re going out, bringing firms in, so they can flourish. We created programs for those impediments. We funded those programs. And now we’re seeing contracts, for the first time in history, being awarded to the MWBE population as prime contractors.

C&S: What’s the timeline to get MWBE purchasing from 10 to 20 percent?

MG: Basically, [Cuomo] wants it done yesterday. But I would say within the next two to three years we’ll hit that total.

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But Williams said he felt just as upbeat about New York’s minority- and women-owned business enterprise (M/WBE) program when it was getting off the ground five years ago—and now he says that those results have been “abysmal.”

“I think it is a great step forward, but I also thought that Local Law 129 was a great step forward,” Williams said of the legislation behind the city’s M/WBE program. “People didn’t follow that, and there were no consequences.”

As Mayor Michael Bloomberg makes another push to spur diversity in city contracting, his record of results has critics skeptical of how much will change.

“I think they’re trying to step it up a little bit because there’s so much focus on the paucity of M/WBEs that get contracts with New York,” City Councilwoman Letitia James said of the Bloomberg administration. “It’s a small step forward at the end of his administration.”

In 2007, just 1.3 percent of the city’s contract spending was awarded to M/WBEs. That figure rose to 4.6 percent in 2009 but fell back to 3 percent in 2010.

The city’s Department of Small Business Services (SBS), which oversees the M/WBE program, is only responsible for contracts under $1 million. The share of spending on the smaller contracts going to M/WBEs rose from 8.1 percent in 2007 to 12.4 percent a year ago.

An SBS spokeswoman said that the first few years were spent developing and staffing the program, and that 2011 is the first year out of the ramp-up phase. Results were also better in areas where the city had more flexibility and discretion to award contracts, the spokeswoman said.

Yet critics point out that the figures are still nowhere close to matching the diversity of the city, which has a population that is more than half minority citizens. Whites make up 44.7 percent of the city’s residents, according to recent census figures.

“We’ve gone from the place where we needed to shock the heart of the patient to now, [where] the patient has a weak pulse,” said Councilman James Sanders, who sponsored the 2005 M/WBE law. “But if you’re remembering that this is a city that is 80 percent women and people of color, then we are not ready yet to call a victory.”

One of the toughest critics has been City Comptroller John Liu, who has issued a stream of critical reports and posted an online M/WBE report card tracking the city’s progress.

Liu said that the $400 million in
M/WBE contracts was a tiny fraction of the city’s more than $18 billion total in 2010.

“To me, that in no way represents the skills and talents that we have,” Liu said in an email. “It represents a continuing systematic bias in the way we do business.”

But even some opponents say the Bloomberg administration’s new initiatives, announced in late May, could change that.

Bloomberg’s latest steps include more assistance on M/WBE proposals, more feedback on failed bids, help obtaining performance bonds on construction projects, and new short-term loans and mentorship programs. The city is also requiring city agencies to post all solicitations to the online City Record.

“I’ve seen the proposal, and I think it’s actually pretty good,” Williams said. “Particularly the focus on fixing the problem with the bonding, the workshops; making sure that vendors are meeting, and bidders are meeting, the agencies that have this money; making sure they clearly understand the process and why they did not get the funding.”

Other steps aim to demand more accountability from city agencies and prime contractors, which subcontract with smaller M/WBE firms. Agency staff will undergo training and meet more often with M/WBE firms, and contractors will be required to certify they are meeting their
M/WBE goals, or face tougher consequences.

Len Britton, managing director of the New York State Association of Minority Contractors, applauded the initiatives, which have been successful elsewhere.

“It’s a very useful tool to develop and improve minority businesses,” Britton said. “Give it some time, and then you’ll know the success of it. Let’s give it a chance.”

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