New York City officials on MWBEs and counteracting discrimination in the marketplace
Against a backdrop highly-publicized sexual harassment cases and racially-charged debates on patriotism and police misconduct, New York has doubled down on efforts to expand opportunities for minorities and women, which officials believe are critical to counteracting discrimination in the marketplace. Since taking office in 2011, Gov. Andrew Cuomo has spearheaded efforts to direct substantially more state contracts to firms owned by women and minorities. In New York City, Mayor Bill de Blasio has also been putting more resources toward these minority- and women-owned business enterprises, or MWBEs.
In the following interviews with local officials, we look at how far the city and state have come in directing more contracts to MWBEs, how far they both have to go to reach their ambitious goals, as well as proposals on how to increase the capacity of MWBEs so that more of them can qualify for large contracts.
Director, New York City Mayor’s Office of MWBEs
C&S: In September, New York City announced that it had, for the first time, awarded more than $1 billion to MWBEs in fiscal year 2017. How did the city achieve that?
JD: We created an MWBE office whose everyday work is to look at our system, look at our firms, look at our agencies and the market and see what we need to do to make sure firms are participating. The second thing we did was increase our programs to assist those firms, such as the contract finance fund, the bond collateral systems fund and also outreach. Firms that have been left out really needed to have their confidence built again – that the city is open for business and I think that’s what we have done. The mayor has made historic investments in MWBEs in terms of millions and millions of dollars in our programs.
C&S: What more could be done to help the city achieve its goal of awarding 30 percent of eligible contracts to MWBEs?
JD: One of the things we really want to do is create a meaningful mentorship program, one that is associated with opportunity – mentorship programs that we can use to build these firms up, but give them the actual practical knowledge in the classroom, but also practical knowledge in the field.
C&S: With your experience working directly with minorities and women business owners, how does your current role line up with your previous work?
JD: Part of my work throughout the years working with MWBEs is pretty much the same. You have firms who can do the work. You know these firms are capable. They have the talents. They have the gifts. But the system in place hindered them from actually succeeding and we have to tackle those systems. It is hard work that requires consensus, work that requires partnership in the city and within the agencies and strong leadership from the head, which is our mayor, and I think we’ve seen that. We still have to develop these firms. We have to continue to grow these firms. We still have to continue to invest in these firms and I think that’s what we have to do here. We have to level the playing field and remove the barriers. That I think is one of the key components to what we do right now in our office. We’re working every day for those barriers to entry and barriers to success, and we’re pulling those barriers down.
C&S: What are the challenges in reaching the 30 percent goal?
JD: We will reach our 30 percent goal by 2021. We are quite confident that we will get there. We have produced several programs that are specific to the MWBE community to address some of the capacity concerns. I think this work is hard work. You’re dealing with a group of businesses who were systematically excluded from the process. When you have that, you not only have to repair the confidence of those firms that the city is open for business, that we want them to have a seat at the table, we want them to be involved. You also have to change policies, processes, procedures, laws. All these things we have to change in order to make this more of an equitable system. So what we are doing is paying attention to these firms.
One of the challenges we changed was that we went to Albany and said the city had a discretionary threshold of $20,000. The state has a discretionary threshold of $200,000 and MTA has a discretionary threshold of $400,000 for MWBEs. So when you think about challenges, one of the challenges is really an entry of access into the city’s procurement process because if you’ve been excluded from it for so long, you need to have an entry into the program. One of the ways to do that is through the discretionary threshold. We went to Albany and we asked the state Legislature to change that and we did get it changed and got a bill passed for the first time in New York City history of $150,000 for the discretionary threshold and that will help us to address some of the access and entry into our system.
Chief Diversity Officer, New York City Comptroller’s Office
C&S: What does your job entail?
WG: What I do is look at how the finances are utilized as it pertains to women- and minority-owned businesses. That really is across the board, whether it’s on corporate boards or contracting in the city, and we’re looking at how companies are made up and their composition.
C&S: Do MWBEs have the capacity to reach the mayor’s goals?
WG: One of the things that we’ve definitely seen in our research is that the city has been increasing their spending. When we first came in, it was 2.8 percent, and now we have seen an increase to 4.8 percent. We have heard the comptroller say over and over that clearly 4.8 percent is not enough. But we recognize that turning the mountain takes time, flipping the mountain takes time, changing institutional racism and institutional laws that push the pendulum forward takes time. So one of the things we have to also address is not just looking at city spending, but looking at where we’re spending our dollars, where the top 25 awards are going to. I was really happy to see that … on the really large contracts, we do see a utilization of women- and minority-owned businesses in the construction field. We want to see that in professional services as well, and in other industries. What we want to focus on is where we have the grandfathered contracts, where are the contractors in the last 20 years who have always had a contract with us, and where are the opportunities within renewals, within new procurements, that we can open up the space for the MWBEs. Capacity is also about creating a pipeline, it’s about debunking contracts, it’s about government being more transparent about who we’re doing business with.
C&S: What else can the city do?
WG: Having a chief diversity officer is very important to build the capacity for MWBEs. We see it in agencies already, like the Department of Design and Construction, and we can see the change.
New York City Comptoller
C&S: The city in 2015 earned a failing grade of D+ for its contracting with MWBEs in your Making the Grade report. What do you suggest or recommend the city do better?
SS: Those who build up their neighborhoods feel like they can’t afford their own communities. And that’s why investing and supporting MWBEs is so important – it’s about delivering real, local, community-level wealth creation. And it’s good for our economy as a whole. That means city government needs to do its part. When I first came into office, I made a game-changing decision to hire a chief diversity officer specifically to make sure we were investing in MWBE firms and constantly elevating this critical conversation. Today, because of this role, we’ve done groundbreaking work to diversify corporate boardrooms. As a result, we believe our city deserves a chief diversity officer, reporting directly to the mayor, who focuses full-time on MWBE growth, compliance and accountability.
C&S: What's your take on the de Blasio's administration's commitment of $1.6 billion to help reach the 30 percent of contracts going to MWBEs? Is it possible?
SS: One of the reasons we’ve worked so hard to raise this discussion is because it’s a question of basic fairness. When just 4.8 percent of total city procurement spending goes to MWBE firms, that’s not just an imbalance. It’s an injustice. It’s a deck that we have to unstack. We’re not leveling the playing field when 95 percent of contracts go to non-MWBEs, and it's neither right nor economically smart to have that kind of gross disparity. City Hall has been taking some important, laudable steps on this issue. There’s no doubt that we have more to do, and we all need to work together to give MWBEs the support they deserve.
C&S: What do you predict will be some of the struggles in attaining this goal?
SS: There’s certainly a lot we have to get done. We need to get more qualified MWBEs certified to do business with the city. We need to educate companies on how to get government contracts and navigate the system. We need to spotlight areas where there are inequities – and fix them. This is an issue that didn’t start overnight and it won’t be fixed overnight. But delivering results isn’t a choice – it’s an economic and moral necessity. At the end of the day, this is about right and wrong – and it's in our economic interest as a city to level the playing field and fix this inequality. Whatever obstacles exist must be overcome because this is too important.