Leveling the Field: Will de Blasio Follow Through On MWBE Promise

Leveling the Field: Will de Blasio Follow Through On MWBE Promise

Leveling the Field: Will de Blasio Follow Through On MWBE Promise
August 11, 2014

During the 2013 New York City mayoral campaign, all of the top Democratic candidates—including then Public Advocate Bill de Blasio—prioritized the expansion of city contracts with minority- and women-owned businesses. Research at both the city and state levels has demonstrated that far more MWBEs are available to take on government contracts than are actually chosen to do so. And although there are numerous government initiatives aimed at increasing MWBE participation in city procurement, the share of city money spent on such contracts remains abysmally low.

While the share of government procurement spending with MWBEs has increased markedly at the state level in recent years, it has been anemic in the city during that same period. In spite of a 2005 law establishing MWBE utilization goals for city agencies—12.63 percent of each agency’s construction contracts under one million dollars were supposed to go to firms owned by African Americans and 9.06 percent to Hispanic Americanowned companies, for example—the Bloomberg administration did not see these goals through to fruition.

“It’s plain the current administration at City Hall is not serious about this issue. … The mayor was not personally committed to it; the people around him were not personally committed to it,” said de Blasio at a 2012 City & State roundtable discussion with the Democratic mayoral candidates. “This begins with the mayor … and in the ultimate city of immigrants, and in a city that will live or die on the strength of its small business immigrant sector, that’s bad policy.”

Given his rhetoric during the campaign, now that de Blasio is mayor, will the city’s approach to MWBEs change? The short answer is that it is too soon to tell, but policymakers and leaders in the MWBE community appear optimistic.

“I don’t think the mayor’s had the chance to publicly focus on that yet,” said Bill Thompson, the former New York City comptroller and mayoral candidate who, starting in 2011, chaired Gov. Andrew Cuomo’s MWBE task force, which played an important role in the considerable gains made by the state. “But I am hopeful—Bill de Blasio voiced strong support, so I believe it is something that he will focus on.”

New York State’s procurement with MWBE firms doubled from 10.28 percent of all contracts in Fiscal Year 2010–11 to 21.06 percent in Fiscal Year 2012–13. But in New York City, the numbers have stagnated— by some accounts even sliding backward—from 5 percent of the total procurement budget for Fiscal Year 2012 to 2.7 percent in Fiscal Year 2013, according to a press release from the city comptroller’s office. Oddly, the Fiscal Year 2013 annual procurement report linked to in the same press release sets the overall MWBE share higher, at 5.5 percent. To further confuse matters, the comptroller’s MWBE online “report card,” which tracks city agency contracting, puts the Fiscal Year 2013 share at 3.45 percent, and the Fiscal Year 2014 share at 4.35 percent.

“The Comptroller’s Office is establishing a [new] grading method for city agencies and we will be releasing results this year,” said city comptroller’s office spokesman Michael Nitzky in an email. “The goal of grading each agency is to drive transparency and accountability and change behaviors within the agencies.”

“This does not happen overnight,” Thompson said. “It’s a question of creating focus, and then a plan, and then moving forward. What message do you convey to your entire administration? And I don’t think Michael Bloomberg did that … Andrew Cuomo did do that—he put together a team; he took a multilevel approach within the agencies; held commissioners accountable. … I think you will see that the de Blasio administration will create focus in this area, and will start at the top.”

In 2013, then Mayor Bloomberg signed Local Law 1, which was intended as a remedy to the weak 2005 law that failed to yield results. Among other provisions, the updated law, which went into effect on July 1 of last year, eliminated a $1 million cap placed on eligible contracts in the original legislation, expanded the scope of contracts acceptable under the programs and enhanced oversight requirements to help ensure the city meets its goals.

Local Law 1 also established the position of a director to oversee the program, a position to which Mayor Bill de Blasio appointed his legal counsel, Maya Wiley, this spring, according to the latest periodic MBWE compliance report put out jointly by the Mayor’s Office of Contract Services and the Department of Small Business Services. (The report is also a requirement of the law). As director, Wiley is required to call quarterly meetings with commissioners and MWBE officers to discuss and oversee agency performance in attaining goals. Improvement plans are required for agencies that do not meet their aims.

City Councilwoman Helen Rosenthal of Manhattan’s Upper West Side, who chairs the Council’s Committee on Contracts, also says it is too soon to tell if the new law—or the new mayor—are reversing the tide.

“We [the Contracts Committee] are planning to have a hearing in the fall, once a year’s worth of data has come in,” said Rosenthal. “The city has put out one or two updates, as they were required to do, and it looks like Small Business Services is doing a fair bit of outreach and training for MWBEs, but we want to get at least one, probably two more before we have our hearing. It will be a chance for us and for the public to really scrutinize what’s been done over the first year.”

Rosenthal says the Council hearing will tentatively be held in November, although that time frame could be subject to change.

Local Law 1 requires the Department of Small Business Services to expand the directory of certified MWBE firms; in the latest compliance report, SBS reported signing up 316 new MWBEs between July 2013 and March 2014, bringing the grand total of city-certified MWBEs to 3,732. SBS also claimed in the report that it “informed and connected over 1,746 MWBEs to contracting opportunities” in the first three quarters of Fiscal Year 2014—but it is not clear what percentage of these—if any—were with the government.

City Comptroller Scott Stringer also touted the need for expanded MWBE contracting during last year’s campaign.

“The reality is, this is not about a handout to businesses and people,” Stringer said at the same 2012 City & State mayoral roundtable. “This is about sound economic policy, because when you diversify the businesses that are able to access contracts, you increase the capacity of the New York City economy.”

In March, Stringer appointed Carra Wallace, a former Cuomo administration official, as the New York City comptroller’s office’s firstever chief diversity officer. Part of Wallace’s job will be to create the MWBE grading system for New York City agencies that will replace the current report card system, which was established under Jon Liu.

At the mayoral roundtable, de Blasio emphasized that any chief diversity officer in the administration would need real power—the mayor’s ear—to be effective. On his campaign website, this position was further refined: “As mayor, Bill de Blasio … will empower a deputy mayor with the responsibility of increasing diversity in city contracts and procurement.” Maya Wiley is not a deputy mayor, but as de Blasio’s counsel, she certainly has his ear.

Nonetheless, the consensus among MWBE advocates seems to be that real, dramatic change can only come from the mayor himself.

“I am confident he will get to it, but I think it needs to move much more quickly and with more force and emphasis,” said Rev. Jacques Andre De Graff, a prominent MWBE leader. “During the last two quarters of the Bloomberg administration, the infrastructure was put in place to advance the cause … Scott Stringer’s office has the resources to spotlight the city agencies that are doing well, but the mayor is the bottom line. The administration has the capacity and its heart in the right place, but it has not happened yet.”

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Wilder Fleming