New York state in fiscal year 2021 paid an unprecedented $3 billion to the state certified minority- and women-owned business enterprises (MWBEs). And the state exceeded its own MWBE official utilization rate goal of 30%.
The Metropolitan Transportation Authority represented 30% of all payments made by the state that fiscal year, which turned out to be the most of any state agency totaling $916 million and reaching a 31% utilization rate.
Now, the MTA is looking for a repeat of its MWBE contracting rate in this current fiscal year. City & State caught up with Michael Garner, the MTA’s chief diversity officer, to find out how the agency was able to award so many contracts, how COVID-19 impacted the process and what the prospects look like for future MWBEs.
First off, how did the MTA award so many MWBE contracts in fiscal year 2021?
The reason why we were able to do that is that our diversity and MWBE programs are aligned with the governor’s program. The MTA acting chairman and soon-to-be chairman Janno Lieber, and the MTA board, holds my staff of 80 people accountable for not only assisting the MTA in awarding contracts in a cost-effective manner because it’s taxpayers money being spent, but in an inclusive manner. And that means that if there are any impediments in the process, that is incumbent upon me and my staff to identify them, come up with solutions so we can once again award contracts and spend dollars in an inclusive manner. We’re focused on solutions and not blinded by problems.
How did you approach the coronavirus pandemic? How did it impact your contract awards?
Anytime under ordinary circumstances, when there is an emergency or pandemic, the MWBE rules are thrown to the side, and you award contracts on an emergency basis. But we agreed early on here at the MTA that we would not do that, that we would go out into the marketplace and find the most qualified businesses, find the most qualified New York state certified MWBEs and MTA certified DBEs (disadvantaged business enterprises), and we would afford them an opportunity. And so for an eight-month period, we were able to identify and spend money and contracts with New York state MWBEs totaling over $100 million. Every day, we shut down the system for three hours, and we disinfected all of our trains and subway stations. Some of those companies that had that responsibility, they were certified MWBEs who were disinfecting our subway stations and trains. And we bought a whole lot of COVID-19 products from certified MWBEs. And so the message that we sent, although it is an emergency and MWBEs need not to apply, that’s a myth. We went out and we secured the services of a record number of MWBEs and totaling over $100 million in contract awards during COVID-19.
When you say emergencies, what were some of those past emergencies that diverted that funding?
Hurricane Sandy, getting our system back up and operating. Fixing subway stations that were flooded by Sandy. It is regular standard operating procedure that when there is an emergency, that the MWBE and other procurement rules go out the window and they’re thrown to the side. But during COVID-19, we dispelled that myth, and we went out and actively sought minority- and women-owned businesses.
Was there something different about the outreach in reaching those MWBEs during the pandemic?
No, we have followed our standard course of business, our standard course of business is to meet companies, certify those companies and we integrate them into our business procurement practices. We do not allow them to operate in the abyss. So we bring all the certified firms in every quarter, and we bring all the MTA agencies in, and we integrate them into the procurement processes of each one of the MTA operating agencies.That’s the difference in certifying companies, not helping them, but now guiding them to where the opportunities are and then holding our procurement staff responsible for including these newly certified firms into our business practices.
Once hopefully this health crisis lifts, are you going to be executing your business procedures in any way differently?
We are always looking for new and innovative ways in order to conduct our business the same way that we reverted to a Zoom platform to hold our MWBE outreach events. We will continue doing that. As we emerge from this pandemic, we will bring our in-person processes back. But then, we will probably incorporate a hybrid approach, basically in person and also Zoom. So we will reach a more broader audience.
How do you work to detect cases of MWBE fraud?
We work extremely close with our inspector general’s office and the Manhattan DA and the U.S. DOT (Department of Transportation) inspector general. When we get a sense from our site visits and observations, if there’s a sense of any MWBE fraud going on, my staff and I, we will alert the MTA’s inspector general’s office for an investigation. About five years ago, we fined two major companies for DBE fraud, and $30 million of fine money came to the MTA. The chairman was Jay Walder, and Jay Walder told the administration here that a lot of that fine money should go back into my program.
Please talk more about your DBE contracts.
The MTA is the largest recipient of federal transit money. At the federal level, there is not the MWBE focus, there is a Disadvantaged Business Enterprise focus. And on those federally funded contracts, we assign DBE goals, and then we track those DBE goals month to month to make sure that our third party contractors and consultants are going to achieve our DBE goals.
Do you expect to meet your MWBE goals in this current fiscal year?
We are on track. We are entering the fourth quarter of the New York state fiscal year, which ends on March 31. We are at 29.6% MWBE inclusion. So I anticipate that at the end of the day, that the MTA will remain the leader in this region with affording opportunities to New York state certified MWBE firms, MTA certified DBE firms and there will be a lot of payments made to these firms during this current fiscal year.
Do you see any challenges that remain for MWBE businesses that might have been struggling during the pandemic?
I foresee the challenges of those businesses on recalibrating, getting back out into the marketplace and marketing themselves. I also see a challenge, based upon the infrastructure money coming in. The challenges for government is going to be for us to go out and recruit more businesses to take advantage of this new funding that we are currently experiencing. My staff are going out via Zoom in and in in-person MWBE events. They are meeting companies. They are assisting them in getting their certification. And then they’re integrating them into our business processes and procurement processes. And those are some challenges that I foresee that’s going to happen or that’s happening already as we speak.
How much infrastructure money is out there for the MTA to distribute?
So the MTA, we are recipients of $10.3 billion of infrastructure money. And then our great Sen. Chuck Schumer just secured $6 billion for us. Those monies are not only going to improve our system, but going to afford contract opportunities for our diverse contractors and businesses. It’s a godsend for us to be recipients of this new federal infrastructure money, but we must focus on, not only building back better, we must build back inclusively.