Exclusive: For the first time, MWBE contracting drops under Cuomo

Exclusive: For the first time, MWBE contracting drops under Cuomo

Exclusive: For the first time, MWBE contracting drops under Cuomo
November 18, 2015

Gov. Andrew Cuomo’s impressive track record in boosting government contracting with businesses owned by women or minorities veered off course in the past year – and his administration has changed course by doing next to nothing to publicize it.

The value of state government contracts going to minority- and women-owned business enterprises fell by $267 million in the past year, according to recently published figures. State contracts awarded to MWBEs dropped to $1.69 billion, well short of the nearly $2 billion mark set the prior year.

The decline comes a year after Cuomo raised the state’s MWBE goal to an ambitious 30 percent of all eligible state contracts, which his administration touted as the highest target of any state in the country. Since then the share of contracts going to MWBEs declined instead, to 23.23 percent, down from 25.12 percent the year before.

The Cuomo administration, which announced substantial gains each year since the governor took office in 2011, has downplayed the subpar results, doing little to make the general public aware of them. The updated figures were quietly published in late October in an annual report posted by Empire State Development, which compiles state MWBE contracting figures.

“It was put on the website, and we’re still on track for our 30 percent goal,” said Richard Azzopardi, a spokesman for the Cuomo administration.

The decline is a first for Cuomo, who has been an outspoken champion of MWBEs. Shortly after taking office in 2011, Cuomo signed an executive order creating a task force to explore ways to remove barriers such firms face and called on agency heads to take steps to award 20 percent of their contracts to MWBEs.

Until this past year, the governor had enjoyed consistent success. In the 2010-11 fiscal year, the state awarded slightly more than 10 percent of state contracting dollars to MWBEs. That more than doubled in Cuomo’s first term, rising to 16.67 percent in 2012, to 21.06 percent in 2013 and then peaking at just over 25 percent in 2014.

On the heels of such gains, Cuomo drew applause at the state’s annual MWBE forum in October of last year when he announced that the state had exceeded the 25 percent mark and raised the contracting goal for state agencies, offices and authorities to 30 percent.

This year, in contrast, Cuomo skipped the state MWBE forum. The governor’s office also has not issued any press releases touting its MWBE numbers, unlike in years past, when it would make an announcement in early October in tandem with the annual MWBE forum.

A spokesman for the state Budget Division said that Empire State Development was still vetting the figures when this year’s forum was held on Oct. 1 and 2. The final report was posted online on Oct. 23.

However, such timing issues did not appear to be a problem when the administration had better news to share. In 2013, when the state first exceeded its 20 percent goal, Cuomo announced the accomplishment in early October, even though the final report was not published until mid-December.

An Empire State Development spokeswoman also said that public announcements on MWBEs were made in 2013 and 2014 only because the state had exceeded its target, and that there were no such announcements in 2011 or 2012, either. 

“I don’t know that there’s too many people who want to announce when things are slowed up,” said the Rev. Jacques DeGraff, a longtime MWBE advocate who was unaware of the latest state figures before being contacted by City & State. “It is a concern that with all that is going on in terms of Tappan Zee and Second Avenue construction and other projects, it’s like, don’t take your foot off the accelerator now.”

However, DeGraff and others said they expected the decline to be a minor bump in the road and expressed confidence that the Cuomo administration would be able to turn things back around.

“I don’t take it as a step backward,” DeGraff said. “I take it more as a stall than a decline. If it happened consecutively, then I would be alarmed. I have confidence in the people who got us over 20 percent in the amount of time that they did that they’ll be able to right the ship.”

Much of the decline can be attributed to two major state authorities: the Metropolitan Transportation Authority and the Dormitory Authority of the State of New York, which together make up about a quarter of the state’s total MWBE spending.

The MTA spent $23.8 million less on MWBEs than the previous year. DASNY, meanwhile, spent nearly $60 million less than the prior year. However, both authorities had smaller overall budgets that explain part of the decline in MWBE spending. The MTA, in fact, slightly increased its share of contracts going to MWBEs, even as its absolute spending totals fell.

Similarly, several sources noted that the $267 million decline in total state MWBE spending was in part the result of less overall spending. However, that does not explain the smaller share of spending going to MWBEs, which was nearly two percentage points lower at 23.23 percent.

DASNY’s figures also stand out because the authority was the subject of an audit released by state Comptroller Thomas DiNapoli in July that turned up evidence of serious reporting flaws, including double counting in previous years that had inflated some MWBE contracts by millions of dollars. DASNY disputed some of the comptroller’s findings, but acknowledged the problems with double counting and said it had taken corrective action.

The state budget spokesman asserted that DASNY correcting its over-reporting was not a reason behind its lower MWBE spending.

Other state offices experienced even larger declines, led by the Department of Environmental Conservation, whose MWBE contracting plummeted from $203.9 million to $51.9 million, and the Transportation Department, which fell from $208.7 million to $65.1 million.

The DEC also had one of the steepest drops in percentage terms, from 59.2 percent of contracts going to MWBEs in 2013-14 to just 32.2 percent in 2014-15.

Some advocates say they still have confidence in the Cuomo administration, given its strong track record in recent years. As several observers noted, the state is still outperforming New York City, which has been mired in the single digits and has steered only 5.3 percent of its contracts to MWBEs, according to the latest figures.

“There’s an amount of fluctuation that one would expect in this area, in any business-related area over time, but the fact that they’re still hovering around 25 percent is a comfort,” DeGraff said. “The big immediate concern is New York City. Hundreds of millions of dollars are walking out the door, and the MWBE community is very distressed.”

Jon Lentz
is City & State’s editor-in-chief.