City Hall optimistic despite drop in MWBE contracting rate

Ed Reed/Mayoral Photography Office
New York City Mayor Bill de Blasio, flanked by Deputy Mayor Richard Buery, left, and City Councilman Robert Cornegy Jr., far right, makes an announcement about the city’s MWBE program in 2016.

City Hall optimistic despite drop in MWBE contracting rate

City Hall optimistic despite drop in MWBE contracting rate
October 31, 2017

Although Gov. Andrew Cuomo and New York City Mayor Bill de Blasio feud on issues ranging from transportation to land use, their administrations are following similar tracks in promoting minority- and women-owned business enterprises. In 2014, Cuomo set the goal of having 30 percent of all state contracts go to MWBEs. In the most recent fiscal year, MWBEs accounted for 27.2 percent of state contracts.

Last year, the mayor followed suit, creating the Mayor’s Office of MWBEs, accompanied by several new initiatives. He also included the goal of increasing the share of city contracts awarded to MWBEs to 30 percent by 2021. Between fiscal year 2015 and 2016, city MWBE contracts increased from 8 percent to 14.3 percent. However, in fiscal year 2017, their share fell to 11.4 percent.

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Jonnel Doris, the director of the Mayor’s Office of MWBEs, was quick to note that amounts awarded to MWBEs this year increased by $300 million, from around $700 million to more than $1 billion. His reasoning for the dip in percentage of contracts was garbage – literally.

According to Doris, the city signed an atypical contract that brought the rate down from where it was hovering in the third quarter. The contract involved the Department of Sanitation exporting waste to landfills in other states, as the city does not have any landfills. The city found no MWBE contractors in the waste management industry for the $2.7 billion, 20-year contract.

“From a just mathematical standpoint, you had a contract added to the denominator of the equation of utilization that brought our ultimate utilization down from the 19 percent that it was trending at the end of the third quarter,” Doris said.

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In contrast to this setback, his office has launched several initiatives to bolster MWBEs, and therefore make them available to the city to use as contractors. He mentioned a capital access program and a bond collateral assistance program as well as a bill recently passed in the state Legislature awaiting Cuomo’s signature, which would remove some of the structural and financial barriers to MWBE success. He also said that the city has the goal of certifying 9,000 MWBEs by 2021, a sharp increase from the roughly 5,200 MWBEs that are currently certified.

“The more MWBEs are in the program, the more they actually bid, the more they win, the closer we are to our target,” he said.

Percentage of New York City contracts with MWBEs

In 2016, New York City Mayor Bill de Blasio launched several initiatives to promote minority- and women-owned businesses in the city, including setting a goal of awarding at least 30 percent of city contracts to MWBEs by 2021. Since de Blasio took office, the city has not achieved that aim. Although the proportion of contracts awarded to MWBEs decreased in fiscal year 2017, Raul Contreras, a spokesman for the recently created Mayor’s Office of MWBEs, noted that the value of contracts continued to rise to more than $1 billion, up from about $700 million the year before.

 NYC MWBE contracting 2017

Percentage of state contracts with MWBEs 

In his first State of the State address in 2011, Gov. Andrew Cuomo set a goal of awarding 20 percent of state contracts to minority- and women-owned businesses. After surpassing that goal, he raised the benchmark to 30 percent in 2014. The state is getting closer, but it has yet to fulfill that goal.

MWBE - New York State contracts 2017

Grace Segers
is City & State’s digital reporter. She writes daily content on New York City and New York state politics.