Making the Grade

Making the Grade 2019

Executive Summary

Across the country, 8.7 million Americans are employed by businesses owned by women and people of color.[1] In New York City alone, more than half of businesses are minority- or women-owned, generating wealth in communities of color while contributing to the overall fiscal health of the city.[2]

Programs that expand these businesses’ opportunities in public procurement not only create a more equitable economy, they also drive competition and save taxpayer dollars in the long term. New York City’s efforts to buy more goods and services from minority- and women-owned businesses (M/ WBEs) were established 30 years ago and continue today through Local Law 1 of 2013, which sets citywide participation goals for M/WBEs.[3] Goals are set for minority groups across four industries: professional services, standard services, goods less than $100,000, and construction.

Since 2014, the Office of New York City Comptroller Scott M. Stringer has issued an annual, agency- by-agency evaluation of the City’s M/WBE program and made recommendations for improving its performance. The 2019 report builds on that work by further exploring the question of whether the City is on track to meet its aspirations of diversity and inclusion in public contracting. Grades are based on actual spending in Fiscal Year (FY) 2019, rather than the value of contracts awarded during the fiscal year, because contract awards may or may not result in M/WBEs actually receiving payments from the City.

This report finds that the city has made major improvements in its spending with M/WBEs. Key findings include:

• The City spent $911.9 million with M/WBEs in FY 2019, an additional $180.8 million from FY 2018.
• The City earned its first “C” grade in FY 2019 for M/WBE spending after four consecutive years of “D+” grades.
• For the first time, no agencies received an overall “F” grade.
• 30 out of 32 agencies improved or maintained their grades from last year.
• The implementation of the M/WBE Small Purchase Method enabled the City to do $42.4 million in business with 292 firms, about three percent of all certified M/WBEs.
• Six agencies spent more than 10 percent of their annual budget through the M/WBE Small Purchase Method: the Commission on Human Rights spent 58 percent of their budget using the M/WBE method, followed by the Business Integrity Commission at 18 percent, Department of Probation at 16 percent, Department for the Aging at 16 percent, and the Department of Cultural Affairs and Department of Consumer and Worker Protection (formerly the Department of Consumer Affairs) each at 13 percent.
• Of the City’s 50 largest competitive contracts registered in FY 2019, 36 totaling $1.7 billion were eligible for goal-setting under Local Law 1. Of these, 34 were assigned M/WBE utilization Contracts assigned goals made up a total value of $1.6 billion, or about 92 percent of Local Law 1-eligible dollars.

However, despite these improvements, this report finds that there is ample room for continued progress:

• The 50 vendors that received the most City spending received $3.9 billion. Of that, M/WBE prime vendors received $286 million and subcontractors received $48 million, a total of just 8.5 percent.

• The five agencies that received “D” grades account for 48 percent of the City’s total M/WBE program spending, while the 27 agencies that received an “A,” “B,” or “C” grade account for 52 percent.
• There is significant room for increased spending with every minority group. The City earned a “B” grade on spending with Asian American-owned businesses and a “C” grade with Hispanic American-owned businesses. It maintained its “D” grade with women and its “F”   grade with African American-owned businesses from FY 2018.
• The City awarded $20.5 billion in contracts in FY 2019, of which only $1.007 billion (equal to 4.9 percent) were awarded to M/WBEs.
• 17 percent of City-certified M/WBEs received City payments in FY 2019, a decrease from 20 percent in FY 2018 due to an expansion of more than 2,000 firms in the M/WBE. However, the number of M/WBEs receiving City dollars has doubled from 760 in FY 2015 to more than 1,500 firms in FY 2019.
• Ten agencies spent less than one  percent  of  their  budget  using  the  M/WBE  Small Purchase Method: the Department of Housing Preservation and Development, Department of Environmental Protection, Department of Transportation, Department of Parks and Recreation, Department of Citywide Administrative Services, Department of Homeless Services, Department of Sanitation, Human Resources Administration, Department of Design and Construction, and the Landmarks Preservation Commission.
• Two of the City’s largest contracts registered in FY 2019 were not assigned goals. These contracts were held by the Department of Information Technology and Telecommunications and the Department of Social Services (made up of the Departments of Homeless Service and the Human Resources Administration).

Each year, this report also puts forth recommendations meant to reduce barriers and increase access to opportunities for M/WBEs. The Comptroller’s Office conducted a survey of over 550 M/WBEs to help inform these recommendations. Survey findings included:

• 82 percent of respondents expressed the need to improve criteria on how vendors are selected for City work. 28 percent of firms that never competed for prime or subcontracts said they have yet to be eligible for available procurements.
• 80 percent of respondents that served as prime vendors and 90 percent of M/WBE subcontractors waited more than 30 days to be paid for their first invoice on average.
• 69 percent of respondents found agencies unresponsive when they reached out to Agency Chief Contracting Officers, M/WBE Officers, or other related liaisons with meeting requests, phone calls. As a result, 75 percent of respondents stated that agency responsiveness needed some or major improvement.
• More than 60 percent of respondents never received support navigating key procurement systems such as the City Record Online, the City’s public database for contracting opportunities.
• 38 percent of respondents never competed for prime or subcontracts. When asked why, 38 percent of respondents said they were not aware of procurement opportunities, and 37 percent said the process was too time consuming and hard to 42 percent of respondents spent more than 20 hours on the M/WBE certification process.

Based on these findings, the Comptroller’s Office recommends the following:

• The City should require agencies to conduct market analyses to inform decisions concerning procurement requirements. For each upcoming contract, the M/WBE Officer, Agency Chief Contracting Officer, and Bureau Head should conduct line-by-line reviews of the procurement requirements, comparing them with M/WBE availability and the overall market in order to set M/WBE goals and to change solicitation language that creates artificial barriers to These changes may include better tailoring of minimum criteria, breaking up large contracts, taking advantage of more competitive procurement methods, and assigning attainable M/ WBE utilization goals that match market availability and ensure inclusive competition. Currently there is no legislation, procurement rule, or administrative guidance requiring that solicitations correspond with market availability.
• The City should conduct a workforce disparity study and create a workforce diversity program. A 2018 analysis of New York City found that people of color make up a smaller and smaller portion of the construction workforce, and the number of women construction workers remains stagnant. Other cities, including Philadelphia and Kansas City are currently implementing workforce diversity goals as part of their M/WBE programs. New York State also recently implemented a construction workforce diversity program after studying occupational disparities among women and different minority groups in all industries. Using these models, New York City should conduct a workforce disparity study that will lead to the creation of a citywide workforce diversity goal among the City’s vendors.
• The City should expand the role of M/WBE Officers to serve as advocates for M/WBEs and to address agency responsiveness and contracting issues.  Based on the Comptroller’s survey of more than 550 certified M/WBEs, many firms struggle to get responses to basic questions, receive timely notice of contract opportunities, or get paid on time. The City should empower M/WBE Officers to address these challenges by expanding their roles. New York State has a similar role, which was expanded this year through legislation. The Statewide M/WBE Advocate will audit agencies and investigate M/WBE complaints. Similarly, M/WBE Officers should serve as advocates for M/WBEs and address agency responsiveness, help M/WBEs navigate the nuances of each agency’s procurement process, handle payment issues, and monitor M/WBE utilization goals. Currently M/WBE Officers typically do not have the influence they need to address M/WBE challenges.

New York City’s M/WBE Program

New York City’s M/WBE Program began in the 1990s after the City’s first disparity study found deep inequities in how M/WBEs were faring when it came to receiving City contracts. The program has changed over time and is currently governed by Local Law 1 of 2013, which sets participation goals for minority groups on City contracts across four industries: professional services, standard services, goods less than $100,000, and construction.

Recent Progress

The City’s M/WBE program received renewed focus in 2015 when Mayor de Blasio announced a goal of awarding $16 billion in contracts to M/WBEs by 2025. Since then, the City increased its goal to $20 billion after being ahead of schedule.[4]

In addition to the Administration’s increased focus on M/WBEs, in October 2019 the City enacted a law revising Local Law 1 goals following recommendations from its 2017 M/WBE disparity study. The City’s new goals will go into effect six months after enactment, in April 2020. These include new goals for Native Americans across all industries and for Asian Americans in professional services. In addition, the new legislation allows agencies to set M/WBE goals on goods contracts up to $1 million, an increase from a cap of $100,000.[5]

The most recent steps taken by the City to help achieve these goal are described below:

November 2018 and March 2019 – Resources for Women Entrepreneurs: The de Blasio   Administration and the Department of Small Business Services (SBS) announced several initiatives under Women Entrepreneurs (WE) NYC, including WE Credit, a partnership with the private sector to provide access to capital through loans and lines of credit, and WE Connect Mentors, which offers women founders with mentors across several industries. SBS also announced in November 2018 that it served over 6,000 women entrepreneurs since the launch of WE NYC in 2015.[6][7][8]

May 2019 – Streamlining M/WBE certification: SBS announced a streamlined, more user-friendly application system for New York City M/WBE certification and re-certification called SBS Connect, which allows M/WBEs to upload and access their certification documents online.[9]

July 2019 – Growing the pool of certified M/WBEs: New York City announced that it met its previously stated goal of certifying 9,000 M/WBEs by June 2019. The number of certified businesses has doubled since the City announced this goal in 2016.[10]

September 2019 – Tailoring initiatives for Black-owned businesses: SBS announced Black Entrepreneurs NYC (BE NYC), an initiative to address the racial wealth gap and help Black-owned businesses start and grow in the City. The initiative began with a survey and a series of public forums to inform future programming.[11]

Legislative Developments Impacting M/WBEs

The New York City Council recently passed the following legislation impacting opportunities for M/WBEs doing business in the City:

September 2019 | Int. No. 1452-A— Updating  M/WBE  Program  Administration:  The  New  York City Council passed legislation making several programmatic changes to the M/WBE program, such as requiring more frequent updates to M/WBE operational protocols, additional agency training, expanded agency M/WBE officer roles, and adding certain citywide projects to the M/WBE program (namely the Rikers Island complex replacement and the Brooklyn-Queens Expressway design-build projects). The law will also require the City to conduct annual internal compliance reviews of current contracts and require vendors to identify specific M/WBE firms earlier in the contracting process. In addition, the legislation will allow agencies to set goals on portions of projects while exempting other portions in cases of zero M/WBE availability.[23]

In addition, the New York State Legislature passed the following bills to increase opportunities for M/WBE:

July 2019 | Bill No. S06575/A08414— Reauthorization and Expansion of M/WBE Program: The New York State Legislature and Governor approved a bill reauthorizing and expanding the M/WBE program enshrined in New York State Executive Law Article 15-A for five years. The bill increases the State’s discretionary purchasing threshold to $500,000; creates a workforce diversity program that includes workforce participation goals; and allows M/WBEs to bid up to 10 percent higher and win low-bid construction projects up to $1.4 million. In addition, for the first time, the Statewide Advocate, appointed by the director of the Empire State Development Division of M/WBEs, will now have expanded authority to audit agencies and investigate complaints from M/WBEs and violations of Article 15-A.[24]

Additionally, the criteria of business owners’ personal net worth limits the number of businesses eligible for the M/WBE program in order to meet a Supreme Court standard of a narrowly tailored program. However, the 2016 State Disparity Study revealed that M/WBEs experience discrimination in the marketplace, even at higher levels of personal net worth.[25] Previously, in 2018, the New York State Legislature passed bipartisan legislation to eliminate the former cap of $3.5 million, which was eventually vetoed by the Governor.[26]

The new law raises eligible business owners’ maximum personal net worth to $15 million and allows the State to establish different maximum personal net worth requirements on an industry-by-industry basis.[27] The increased cap allows firms in industries such as asset management and infrastructure construction to participate in the M/WBE program for the first time.

July 2019 | Bill No. S06418A/A08407— Increasing the City’s micro purchase threshold:  The New York State Legislature and the Governor approved a bill allowing New York City agencies, the Department of Education, and the School Construction Authority to award goods and services contracts up to $500,000 to City-certified M/WBEs without formal competition.[28] This new law expands upon a 2017 effort to increase the micro purchase limit to $150,000 for goods and services contracts.[29] For the first time it also includes construction contracts, which were previously limited to $35,000 for micro purchases.

In addition, the law allows the Department of Design and Construction to establish a mentoring program modelled after the Metropolitan Transportation Authority’s current program. It also authorizes agencies to list firms’ M/WBE status on prequalified lists, which will make it easier for agencies to identify experienced M/WBE vendors before issuing specific procurements on high volume or repetitive City work.

M/WBE Challenges

The primary goal of this report is to help the City increase utilization of M/WBEs in procurement. With that goal in mind, for the second consecutive year, the Comptroller’s Office held a series of focus groups to gather input from more than 40 M/WBEs as well as members of the Comptroller’s Advisory Council on Economic Growth through Diversity and Inclusion.

Based on suggestions from the focus groups, the Comptroller’s Office conducted a survey to elicit feedback from a larger population of M/WBEs. Over 550 business owners responded to the survey, and the results highlight some of the institutional problems that inhibit the success of women and people of color in New York City procurement. The focus group participants and survey respondents highlighted the following challenges:

The Need to Rethink Contract Language to Meet the Current Market

More than 80 percent of respondents expressed the need to improve criteria on how vendors are selected for City work. They observed large contract sizes and bid requirements being tailored to incumbents: “The required ‘qualifications’ are set up to require  firms  that  have  already  worked with these agencies, so procurements are not really open to all. In addition, requirements are  geared towards selection of  larger  firms,  often  unnecessarily  given  project  size  (as  I  have done private sector projects much larger).” Consequently, of those that never competed for prime   or subcontracts, 28 percent said they have yet to be eligible for available procurements.

The Need to Get Paid on Time

Eighty percent of respondents that served as prime vendors and 90 percent of M/WBE subcontractors waited more than 30 days to be paid for their first invoice on average. One participant stated “We provided all backups as they requested. [We had] multiple site meetings, calls, emails with [the] agency. However, poor turn around with processing of requisitions and many more issues have led to payments pending years to be paid.”

The Need for Agency Responsiveness

Small purchases, micro purchases, and the M/WBE Small Purchase Method are not posted publicly. In order to find vendors, agencies rely on the SBS directory, which has been criticized for having incomplete or incorrect information, or they attend procurement events to meet vendors. Vendors are then encouraged to request follow up meetings with these agency representatives.

But when M/WBE respondents reached out to Agency Chief Contracting Officers, M/WBE Officers or other related liaisons with meeting requests, phone calls, or emails, 69 percent of respondents found agencies unresponsive. Subsequently, more than 75 percent of respondents stated that agency responsiveness needed some or major improvement. One participant said, “Agency figures attend procurement fairs and appear to be interested in my services but then afterwards, I attempt to contact them and they barely respond. And those that respond often send boilerplate responses about registering here and there without actually taking the time to assist us vendors understand their procurement practices.”

The Need for Support Navigating City Systems

M/WBEs expressed challenges navigating the City’s complex procurement system. In fact, 38 percent of respondents never even competed for prime or subcontracts, and when asked why, 38 percent of those expressed that they were not aware of procurement opportunities, and 37 percent said the process was too time consuming and hard to understand.

Part of the challenge is a lack of support. More than 60 percent of respondents never received support navigating the City Record Online, and more than 65 percent were never supported in finding National Institute for Government Procurement (NIGP) commodity codes that match their industry services, translating into real obstacles navigating key systems.

Even when M/WBEs are able to find these potential opportunities, many reported receiving invitations for bid after the due date, notices of award to other vendors, or renewals with incumbent vendors—rather than actionable opportunities. Participants expressed frustration and concern, stating, “There are no opportunities and by the time they come, it is too late. It is as if it is pre-determined the what and the who and the how much.”

Additional findings of the survey will be found throughout this report. A summary of survey questions and responses can be found in Appendix F.

Spotlight: New M/WBE Small Purchase Method Yields $40 Million in Spending

In December 2017, the Governor signed a law increasing New York City’s discretionary limit to $150,000 for goods, standard services, and professional services industries.[30] The Offices of the Mayor and Comptroller then implemented corresponding rules through the Procurement Policy Board.[31] This new policy, called the M/WBE Small Purchase Method, enables City agencies to award contracts up to $150,000 to M/WBEs without a formal competitive process.

Agencies spent about $42.4 million across 747 contracts using the M/WBE Small Purchase Method in FY 2019, the first full year of implementation. On average, agencies spent about seven percent of their budgets using this method.

As seen in Table 1, six agencies made use of the M/WBE Small Purchase Method, spending more than ten percent of their annual budget on various goods and services: the Commission on Human Rights, which spent about 58 percent of their budget using the M/WBE method; the Business Integrity Commission at about 18 percent, Department of Probation at about 16 percent, Department for the Aging at about 16 percent, and the Department of Cultural Affairs and Department of Consumer and Worker Protection (formerly the Department of Consumer Affairs) each at around 13 percent.

Ten agencies spent less than one percent of their budgets using the M/WBE Small Purchase Method: the Department of Housing Preservation and Development, Department of Environmental Protection, Department of Transportation, Department of Parks and Recreation, Department of Citywide Administrative Services, Department of Homeless Services, Department of Sanitation, Human Resources Administration, Department of Design and Construction, and the Landmarks Preservation Commission.

This new policy enabled the City to enter into business with 292 firms – about three percent of all certified M/WBEs. Collectively, the City spent $15.0 million with women-owned businesses, $11.2 million with Asian American-owned businesses, $10.0 million with Hispanic American-owned businesses, and $6.2 million with African American-owned businesses.

Table 1: M/WBE Small Purchase Method Utilization

Two-thirds (66 percent) of firms awarded contracts through the M/WBE Small Purchase Method received one contract, and the average vendor received about $60,000 in spending.[32] However, 100 vendors (about one third) received more than one contract, and five vendors received more than $1 million in total spending through this opportunity. While this is still in its infancy, we are encouraged by the interest generated by the new M/WBE Small Purchase Method among both agencies and vendors.

Spotlight: M/WBE Utilization Goals across New York City

Goal setting allows New York City to reduce disparities for M/WBEs created by institutional discrimination. Among the many ways that Local Law 1 of 2013 increased M/WBE utilization, the law removed a cap that limited the M/WBE program to contracts valued at $1 million or less and enabled M/WBEs to meet utilization goals as prime contractors. These changes allowed New York City to assign M/WBE utilization goals to more procurements.[33]

As a result, in FY 2019, of the City’s 50 largest competitive contracts registered, 36 contracts totaling $1.7 billion were eligible for goal setting under Local Law 1.[34] Of these, 34 contracts were assigned M/WBE utilization goals, with a total contract value of $1.6 billion or about 92 percent, as seen in Chart 1.

Anticipated M/WBE utilization was about $246.8 million—about 16 percent—across these contracts.[35] In order to ensure that these goals translate into actual dollars for M/WBEs, the City must focus on compliance throughout the contract administration process and ensure M/WBEs can get paid on time.

The 14 contracts that were not given M/WBE spending goals were either subject to federal or state goals or were task orders stemming from master agreements that predated Local Law 1 requirements. The two contracts that were subject to Local Law 1 but that did not include goals were held by the Department of Information Technology and Telecommunications and the Department of Social Services.

Chart 1: M/WBE Utilization Goals among New York City’s Largest Registered Contracts, FY 2019

Five agencies—the Departments of Finance, Environmental Protection, Transportation, Sanitation, and Citywide Administrative Services—have consistently earned “D” and “F” grades for M/WBE spending over the last four years. Three of these agencies assigned M/WBE utilization on their top contracts eligible for goal setting, as seen below in Table 2. However, the Department of Citywide Administrative Services assigned goals to only 20 percent of the value of their top contracts, and the Department of Finance assigned goals to half of their dollars. While more and more contracts include goal setting, the lack of consistency across agencies is troubling—particularly because these agencies make up a disproportionate amount of dollars that the City spends. More attention needs to be paid toward inclusion of M/WBEs among these agencies in order to push the entire City forward.

Table 2: M/WBE Utilization Goals among “D” Grade Agencies’ Largest Registered Contracts, FY 2019

M/WBE Contract Awards

The City of New York releases an M/WBE compliance report and the Agency Procurement Indicators Report annually to outline the City’s utilization of M/WBEs and efforts to increase contracting with M/WBEs. This year, the City reported $1.007 billion in M/WBE contract awards, a decrease of $62 million from FY 2018. These contracts represent 23.6 percent of contracts presently within the M/ WBE program (contracts subject to Local Law 1), which totaled $4.4 billion.[36]

However, as shown in Chart 2, M/WBE awards represent only 4.9 percent of the total value of all procurement awards in FY 2019, which was $20.5 billion. Past Making the Grade reports have recommended that the City expand the universe of contracts that are part of the M/WBE program. New York City has since set a goal to award $20 billion in contracts to M/WBEs across all mayoral and non-mayoral agencies.[37]

Chart 2: M/WBE Share of City Procurement, FY 2007 – FY 2019

Source: Mayor’s Office of Contract Services Agency Procurement Indicators: Fiscal Years 2007 to 2019.

Spending and Certification

The City has significantly expanded its database of diverse vendors, certifying 9,035 M/WBEs by the end of FY 2019—up 2,356 since FY 2018, more than any other year.[38] However, there remains a low correlation between certification and receipt of a City contract. As shown in Chart 3, the number of certified M/WBEs receiving payments from City contracts increased by just 164 firms. This means that the share of M/WBEs receiving City dollars dropped to 17 percent, after remaining relatively flat for several years, due to the jump in certified M/WBEs.

Chart 3 also shows the share of M/WBEs receiving payments as prime contractors and subcontractors. The share of M/WBEs receiving prime contracts decreased from 16 percent to 13 percent in FY 2019. The share of M/WBEs receiving subcontracting payments decreased to four percent after remaining at five percent between FY 2016 and FY 2018.

Chart 3: M/WBE Share of City Procurement, FY 2007 – FY 2019

Note: M/WBEs with no payments includes those who did not receive a contract and those who received contracts but no spending in FY 2019.

Citywide Grades

The Making the Grade report evaluates mayoral agencies that are subject to Local Law 1 M/WBE participation goals. The grades are based on actual spending in FY 2019, rather than the value of contracts awarded during the fiscal year, because contracts awarded may or may not result in M/WBEs actually receiving payments from the City.

The City earned its first “C” grade in FY 2019 for M/WBE spending after four consecutive “D+” grades, earning a “B” grade with Asian Americans, a “C” grade with Hispanic Americans, a “D” with women, and an “F” with African Americans.

While still far from stellar performance, there were some bright spots worth noting, and the City’s overall increased spending with M/WBEs must be acknowledged. The City saw increases in spending with African American-owned firms that provide goods and professional services; with Asian American firms that sell goods and standard services; with Hispanic American firms across the construction, professional services, and standard services industries; and with women-owned firms in all industries.

For the second year in a row, the Comptroller’s Office provided Citywide Progress Reports, a tool City agencies can use to help track their spending with M/WBEs throughout the fiscal year. These progress reports provide an analysis of each agency’s spending by minority group and industry compared with Local Law 1 goals. As shown in Chart 5, for the first time, the City met its three percent Local Law 1 goal in standard services with Asian Americans.

Chart 4: Citywide M/WBE Spending Compared with Local Law 1 Goals, FY 2019

Source: Checkbook NYC.

Agency Grades

In FY 2019, of the 32 mayoral agencies graded, three received an “A,” eleven received a “B,” 13 received a “C,” five received a “D,” and, for the first time, no agencies received an “F” grade. While not a mayoral agency, the Comptroller’s Office is graded annually in this report and for the first time received an “A” grade in FY 2019.

Two agencies – the Commission on Human Rights and the Department for the Aging – received their third consecutive “A” grades, and the Department of Health and Mental Hygiene sustained their “A” grade from FY 2018. Four agencies – the Departments of Cultural Affairs, Parks and Recreation, Probation, and the Taxi and Limousine Commission, maintained their “B” grades from FY 2018. Seven agencies increased their grades from “C” to “B”: the Administration for Children’s Services, Department of City Planning, Department of Information Technology and Telecommunications, Department of Small Business Services, Department of Youth and Community Development, Landmarks Preservation Commission, and the Police Department, which this report included for the first time in FY 2018 due to newly available data.

Only two agencies saw their grades decrease. The Civilian Complaint Review Board and the Department of Consumer and Worker Protection (formerly the Department of Consumer Affairs), declined from “B” to “C” grades in FY 2019. This represents the fewest agency grades to decline in an annual report to date.

The City also saw clear improvement at agencies that previously performed poorly. The Department of Citywide Administrative Services increased its grade from an “F” to a “D” in FY 2019. Four agencies, the Department of Buildings, Department of Homeless Services, Human Resources Administration, and the Office of Emergency Management, earned their first “C” grades in FY 2019 after receiving “D” and “F” grades in each of the last five years.

Overall, in FY 2019, 13 grades improved, 17 grades remained the same, and two declined. This means that more than 90 percent of agencies increased or maintained their grade from last year.

Chart 5 shows that the City was able to increase its grade to a “C” because of the collective effort of agencies to increase their spending with M/WBEs. The four agencies that received “D” grades account for 48 percent of the City’s total M/WBE program spending, while the 28 agencies that received “A,” “B,” and “C” grades account for 52 percent. Growth to an “A” grade would require additional improvement in M/WBE spending among the City agencies with the highest amount of Local Law 1-eligible procurement spending.

Table 3 provides each agency’s assigned grade and compares grades from FY 2019 to the last five fiscal years.

Chart 5: Composition of Citywide M/WBE Grade by Total Agency Spending, FY 2019

Source: Checkbook NYC.

Grading by Minority Group

This report also finds that there is significant room for increased spending with every minority group. For their spending with African American-owned firms, five agencies received “A” grades, zero agencies received “B” grades, three received “C” grades, five received “D” grades, and 19 received “F” grades.

With Hispanic American-owned businesses, 12 agencies received “A” grades, three agencies received “B” grades, four received “C” grades, seven received “D” grades, and six received “F” grades.

With women-owned firms, eight agencies received “A” grades, two agencies received “B” grades, eight received “C” grades, nine received “D” grades, and five received “F” grades.

With Asian American-owned businesses, 18 agencies received “A” grades, one agency received a “B” grade, seven received “C” grades, three received “D” grades, and three received “F” grades.

Tables 4 through 7 provide assigned grades for agencies by minority group and industry.

Additional information about individual agency grades is available in Appendix A. The worksheets used to calculate each agency grade appear in Appendix B and a complete explanation of the report’s methodology can be found in Appendix D. Subcontract data for each agency can be found in Appendix C. A review of the City’s top vendors and their M/WBE utilization appears in Appendix E, showing that M/ WBEs received just 8.5 percent of the $3.9 billion that went to the City’s top 50 vendors.

Table 3: Comparison of FY 2014 – FY 2019 Grades

Table 4: Agency Grades with African Americans by Industry

Table 5: Agency Grades with Hispanic Americans by Industry

Table 6: Agency Grades with Women by Industry

Table 7: Agency Grades with Asian Americans by Industry

Getting to the “A” Grade: Comptroller’s Best Practices

Several agencies maintained or improved their marks in FY 2019, resulting in the City of New York earning its first “C” grade, its highest grade yet. The Comptroller’s Office received its first “A” grade in FY 2019, earning an “A” grade across all minority groups and exceeding 36 percent spending with M/WBEs. This was accomplished by proactively implementing a series of reforms to internal processes that have in turn gradually opened up more opportunities for M/WBEs since 2014. The practices the Comptroller’s Office has adopted are replicable and could be used as a model for other agencies to improve their own M/WBE procurement and reach an “A” grade. These best practices can be found in Chart 6.

Chart 6: Getting to the A Grade

Recommendations

Based on the data on spending with M/WBEs, feedback from the focus groups, and the Comptroller’s survey data, this report makes the following recommendations:

Recommendation: The City should require agencies to conduct market analyses to inform decisions concerning procurement requirements.

Prior to the approval and release of every solicitation, the Comptroller’s Chief Diversity Officer conducts market analyses to ensure that contracts encourage meaningful participation by, and opportunity for, M/WBE firms on both prime and subcontracting levels.[39] In order to expand opportunities citywide, the City should require all agencies to conduct these types of analyses to inform decisions concerning procurement requirements such as minimum criteria and scopes of work. Currently there is no legislation, procurement rule, or administrative guidance requiring that solicitations correspond with market availability.

For each upcoming contract, the M/WBE Officer, Agency Chief Contracting Officer, and Bureau Head should conduct line-by-line reviews of the procurement requirements, including the scope of work and minimum criteria, comparing them with M/WBE availability and the overall market in order to set M/WBE goals and to remove solicitation language that creates artificial barriers to competition.

Based on this market analysis, the M/WBE Officer and Agency Chief Contracting Officer (ACCO) should recommend changes that will increase M/WBE opportunities, which should be agreed upon by the Bureau Head and the Commissioner. These recommendations may include altering components of the solicitation, such as better tailoring the minimum criteria to meet industry standards, or they may recommend breaking up large contracts into multiple contracts. The M/WBE Officer and ACCO can recommend optimizing competition by choosing different procurement methods, such as the M/WBE purchase method or a request for proposals rather than negotiated acquisitions where appropriate. Notably, the market analysis allows agencies to confidently assign attainable M/WBE utilization goals that match market availability and ensure inclusive competition. A sample memorandum outlining market analysis recommendations can be found on the next page.

Recommendation: The City should conduct a workforce disparity study and create a workforce diversity program.

Although the City as a whole has a historically low unemployment rate, this does not necessarily signal an inclusive workforce among vendors with City contracts.[40] In fact, a 2018 analysis by the New York Building Congress found that people of color make up a smaller and smaller portion of the construction workforce in New York City, and the number of women construction workers remains stagnant.[41] As the City moves forward in diversifying its vendors, it should also be focused on ensuring that vendors’ workforces are reflective of the city’s population.

Other cities are currently implementing workforce diversity goals as part of their M/WBE programs. For example, Philadelphia set a 40 percent participation goal for minority workers in the construction industry based on a study of the ethnicity and gender of its vendors’ workers. Their study recommended setting goals for each contract depending on the split of skilled vs. unskilled labor hours required for each project. When vendors fail to meet these goals, Philadelphia’s disparity study recommends holding vendors accountable by allowing agencies to withhold payments, withdrawing financial assistance from the project, suspending vendors from bidding, or imposing penalties and fines when firms do not show good faith efforts to meet goals.[42]

Another city currently implementing workforce diversity policies is Kansas City, which set a 10 percent minority goal and 2 percent women workers goal for construction projects with a focus on people from economically disadvantaged neighborhoods. Their disparity study recommended requiring firms to prove good faith efforts towards workforce diversity goals in order to be eligible to bid for City contracts. The study also recommends reporting requirements for hours worked by minorities, women, and Kansas City residents for each project.[43]

Most recently, New York State implemented a construction workforce diversity program after studying occupational disparities among women and different racial and ethnic groups in all industries – including construction, non-construction services, and goods.[44] The program requires workforce goals in all construction bids, and it requires agencies to include workforce diversity language in standard construction contracts for both prime and subcontractors. The new law empowers State agencies to reject bids and proposals of vendors that cannot prove good faith efforts to meet these goals.[45]

Using these models set by Philadelphia, Kansas City, and New York State as examples, the City should conduct a workforce disparity study across all industries (construction; professional services; standard services; and goods). The workforce analysis should include an employee breakdown by skill level (i.e. laborer, apprentice, supervisor, etc.), race, ethnicity, gender, and geography. New York City could begin this analysis in the construction industry by requiring racial, ethnic, and gender data to be added to payroll reports, which construction vendors are currently required to submit to individual agencies per New York State Labor Law. Vendors should submit these reports to one centralized office where a disparity analysis can be completed.

This disparity study can then be used to create a citywide workforce diversity goal on all contracts with City vendors. It should also inform the creation of a workforce diversity program. The program would require prime vendors and subcontractors to show their efforts to employ diverse New Yorkers as a prerequisite to doing business with the City, helping to close persistent wage inequities and strengthen New York City’s economy across all five boroughs.

Recommendation: The City should expand the role of M/WBE Officers to serve as advocates for M/WBEs and address agency responsiveness and contracting issues.

Based on the Comptroller’s survey of certified M/WBEs, shown below in Chart 7, many firms struggle to get responses to basic questions, receive timely notice of contract opportunities, or get paid on time.

Many of these challenges can be addressed at the agency level through the role of the M/WBE Officer. The City should empower M/WBE Officers to address these challenges by strengthening their roles. M/WBE Officers should serve as advocates for M/WBEs and address agency responsiveness, help M/WBEs navigate the nuances of each agency’s procurement process, handle payment issues, and monitor M/WBE utilization goals. This would make M/WBE Officers responsible for agency accountability, allowing them to work with ACCOs during solicitation development and with procurement staff to ensure prompt payment.

Currently most M/WBE Officers do not have the influence they need to address M/WBE challenges. They are charged with:

• Liaising with M/WBEs;
• Ensuring that bid solicitations and requests for proposals are sent to M/WBEs;
• Referring firms to technical assistance services;
• Reviewing requests for waivers of M/WBE utilization goals;
• Monitoring contract compliance, including job site inspections, contacting M/WBEs identified in utilization plans to confirm their participation, and auditing contractors’ records; and
• Reporting M/WBE contract awards to the Mayor’s Office of Contract Services and the Mayor’s Office of M/WBEs.

In addition, according to recently passed legislation, M/WBE Officers will also be responsible for training agency staff and developing agency-wide M/WBE standard operating procedures.[46] Expanding their role to advocate for M/WBEs struggling to do business with their agencies would make the entire process less burdensome for these businesses and improve the overall procurement market.

Chart 7: M/WBE Survey: Suggestions on Areas to Improve Access to Public Contracting

Appendix A: M/WBE Letter Grades

See Agency Grades

Appendix B: M/WBE Letter Grade Worksheets

See Agency Grades

Appendix C: Subcontract Data

See Agency Grades

Appendix D: Data and Methodology Data and Methodology

Comptroller Stringer is committed to boosting M/WBE procurement in City agencies. A core part of that effort is improving transparency surrounding M/WBE spending and accountability for City agencies.

This report focuses on 32 mayoral agencies that account for the vast majority of M/WBE spending. In addition, the Comptroller’s Office has been graded.

One agency that is required to submit utilization plans under Local Law 1 (LL 1) and has significant spending, the Department of Investigation (DOI), is not given grades due to a prior agreement not to publicly display vendor data in Checkbook NYC for security reasons. Checkbook NYC is the source of all agency spending data analyzed in this report, and therefore its spending is not included. The Police Department’s vendor data was previously excluded from Checkbook NYC and was made available for the first time in Fiscal Year 2018. With the addition of spending data from the Police Department, the City’s overall grade for subsequent years, including FY 2019, includes spending by 32 agencies rather than 31. Grade calculations for past fiscal years remain the same.

As with previous gradebooks, all certified M/WBE subcontractor payments subject to LL 1 entered into the Payee Information Portal by prime vendors are included in the agency letter grade calculations. M/WBE subcontractor payments default to the industry and contract characteristics of the prime contracting vendor.

As described below, agency grades are the result of a six-step process that compares agency spending with M/WBE certified vendors to total agency procurement spending in four industry categories established by Local Law 1: Construction, Professional Services, Standard Services, and Goods (contracts less than $100,000). The ratio of M/WBE spending to total spending is then compared to the specific citywide participation goals laid out in LL 1 to determine a final grade based on performance.

Data Availability

The FY 2019 spending transactions for prime vendors and their subcontractors used in this report were downloaded from Checkbook NYC. The analysis calculates spending by the agency listed as the contracting agency—the agency that registered a given contract and is directly responsible for not only setting contract specific participation goals, but also monitoring the contractor’s progress in meeting those goals.

Responsibility for Completeness

The Checkbook NYC data used in this report originated from the City’s Financial Management System (FMS). In a significant percentage of spending, no award category was available in FMS, making it difficult to identify the industry in which the spending took place.

To correct for any missing data, the Comptroller’s Office examined data from the expense category field in FMS and matched entries with industry data where possible. Using expense category data is less reliable than contract type and award category data, but including it provides a more accurate overall picture of agency spending than not including it. A percentage of spending could not be classified using this method and was therefore excluded from the calculations.

Methodology

The following methodology was used to calculate each agency’s grade. Each agency’s individual grade calculation can be found in Appendix C.

Step 1

To calculate the FY 2019 M/WBE eligible spending per industry, or the denominator, the transactions for Construction, Professional Services, Standard Services, and Goods (less than $100,000) were added and totaled. Transactions labeled Individuals & Others, Human Services, Unknown, or Unclassified, as well as expense categories, contract types, and award methods that met specific criteria were not included. Those criteria cover transactions that are not subject to LL1, do not represent true procurement opportunities, and where there is no M/WBE availability.

Step 2

The analysis includes a weighted-average proportional to the spending in a given industry. For example, if 75 percent of an agency’s M/WBE eligible disbursements are Professional Services, 15 percent Standard Services, five percent Construction, and five percent Goods (less than $100,000), then the final grade is most influenced by the Professional Services spending, as that is where the agency spends the greatest amount.

For each industry—Construction, Professional Services, Standard Services, and Goods (less than $100,000) — the spending is divided by Step 1 to determine the percentage of total eligible spend in a given industry category.

Step 3

To calculate the FY19 LL 1 spending with M/WBE vendors, or the numerator, the transactions for each industry—Construction, Professional Services, Standard Services, and Goods (less than $100,000)—were added and totaled for Black American, Asian American, Hispanic American, and Women, respectively.

Step 4

The FY19 LL 1 M/WBE spending as a percent of the eligible spending is calculated by dividing M/ WBE spending (Step 3) by total eligible spending (Step 1) per industry and M/WBE category.

Step 5

To determine M/WBE spending as a percentage of relevant LL 1 participation goals, Step 4 was divided by the LL 1 participation goals. For example, if an agency spent four percent of its FY19 construction funds with African American firms, which have an eight percent LL1 goal, then that agency only reached 50 percent of the target. Note that Asian American Professional Services is not calculated since Local Law 1 has no goal for that category.

Step 6

Each M/WBE category was assigned a score based on its weighted-average across the four industries using the following chart:

Next, the average of the four numbers was assigned a grade, such that:

Grading Scale Rationale

The goal of this report is to drive behavioral change in agency procurement practices. With this in mind, assigning letter grades allows agencies to easily see where their efforts to do business with M/WBEs have succeeded or failed – creating a simple metric to help bring positive changes to procurement practices.

The model employed here is designed to reduce the boost agencies would receive from doing exceptionally well in one category if they are performing poorly in others, and instead reflects the principle that agencies must focus on hitting participation goals across all M/WBE categories in the industries that make up their procurement.

Appendix E: Businesses Receiving the Most City Dollars

Businesses Receiving the Most City Dollars in FY 2019

Appendix F: Comptroller’s M/WBE Survey

This year, the Comptroller’s Office conducted a survey of 567 M/WBEs certified by the City of New York. The purpose of the survey was to understand the experiences and obstacles M/WBEs face in public contracting and to help shape the recommendations in this report.

The key results are below.

Q: In total, approximately how many hours did you devote to the certification process?

Q: How do you think the City of New York could improve the process of proving your ethnic or minority status?

• Sample responses:
  • Provide more options for race and ethnicity, e.g. Middle Eastern, Native American, Brazilian
  • Using documents such as passports or drivers licenses
  • Streamline the process for FastTrack certifications

Q: Since being certified, do you feel that NYC government provided adequate support and resources to help you apply for contracts?

Q: Did you receive NYC government support to navigate any of the following vendor systems?

Q: Have you attempted to contact NYC agency buyers, such as Agency Chief Contracting Officers and M/WBE Officers, with phone calls, emails, meeting requests, etc.?

Q: Have you competed for a prime or subcontract with the City of New York since becoming certified, e.g. responded to a Request for Proposal, submitted a bid, or submitted a quote to an agency?

Q: Have you received a prime contract from the City of New York?

Q: Have you been a subcontractor on a New York City contract?

Q: On average, how long did it take to receive payment after submitting your first invoice for a prime contract / subcontractor?

Q: Please rate the following areas to improve M/WBE access to public contracts on a scale of 1 to 5.

Methodology and Limitations

The survey was administered online from September 12, 2019 to October 4, 2019. While the names and contact information of certified M/WBEs are public, the feedback solicited in the survey was anonymous.

The Office of the Comptroller conducted direct email outreach to all currently certified M/WBEs that appear in the Department of Small Business Services M/WBE Directory and phone outreach to businesses that the Office of the Comptroller has been in contact with through its initiatives. A total of 567 survey responses were collected. The survey was not based on a scientific, randomized sample of the City’s directory of certified M/WBEs. While not all respondents answered each question, the vast majority of respondents replied to each applicable question. The information below provides more detail about the survey respondents.

Business Information

Twelve percent of respondents indicated that they certified as Asian American-owned businesses, 32 percent as African American- owned, 17 percent as Hispanic American- owned, 59 percent as women-owned, one percent as emerging businesses and one percent as local businesses.

Twenty-one percent of respondents reported providing construction services, 13 percent sell goods, and 14 percent report providing standard services. The majority of respondents, about 53 percent, provide professional services, including architecture and engineering.

Most respondents were small businesses. 57 percent of respondents reported annual revenues of less than $500,000. However, 13 percent reported annual revenues of $5 million or more. While the Small Business Services M/WBE Directory includes firms’ largest contracts, it does not list their annual revenue.

Respondent Demographics

Fifty-nine percent of respondents were women, 38 percent were men, and less than one percent non-binary, genderqueer, or gender nonconforming individuals.

Seventy-eight percent of respondents identified as heterosexual and five percent identified as lesbian, gay, bisexual, questioning, or other.

Five percent of respondents have served in the U.S. military and six percent are living with a disability.

Receiving Contracts

Respondents were more likely to receive a contract than the general population of M/WBEs. Forty-six percent of respondents reported receiving prime contracts, and 38 percent reported being subcontractors.

Acknowledgements

Comptroller M. Stringer thanks Wendy Garcia, Chief Diversity Officer, and Patricia Dayleg, Deputy Chief Diversity Officer, for leading the creation of this report.

He also recognizes the important contributions made by:

Alaina Gilligo, First Deputy Comptroller; Jessica Silver, Assistant Comptroller for Public Affairs and Chief of Strategic Operations; David Saltonstall, Assistant Comptroller for Policy; Alyson Silkowski, Assistant Policy Director; Amedeo D’Angelo, Deputy Comptroller for Administration; John Katsorhis, Agency Chief Contracting Officer; Bernarda Ramirez, Deputy Agency Chief Contracting Officer; Denise Hudson, Deputy Agency Chief Contracting Officer; Michael Bott, Assistant Comptroller for Technology/Chief Information Officer; Edward Sokolowski, Executive Director, Systems Development and Program Management; Troy Chen, Executive Director of App Development and Web Administration; Ron Katz, Executive Director, Technology Support and Business Continuity; Archer Hutchinson, Graphic Designer; William Henriquez, Supervising Computer Service Technician;

Lisa Flores, Deputy Comptroller, Contract Administration; Christian Stover, Bureau Chief, Contract Administration; Enrique Diaz, Director or Management Services, Contract Administration; Kathryn Diaz, General Counsel; Marvin Peguese, Deputy General Counsel; Constantine Kokkoris, Assistant Comptroller, Labor Law; Brian Ceballo, M/WBE Officer; Nailah Garard, Diversity Intern; and Kevwe Abamwa, Diversity Intern.

Comptroller Stringer also recognizes the important contributions to this report made by the Advisory Council on Economic Growth through Diversity and Inclusion:

Robert Abreu, Dominicans on Wall Street; Vincent Alvarez, New York City Central Labor Council; Deborah Axt, Make the Road New York; Danielle Beyer, New America Alliance; Neeta Bhasin, ASB Communications; José Calderón, Hispanic Federation; Alejandra Y. Castillo, Minority Business Development Agency; Louis J. Coletti, Building Trades Employers’ Association; Kelvin Collins, Harlem Commonwealth Council; Reverend Jacques DeGraff, Canaan Baptist Church; Lloyd Douglas, Lloyd Douglas Consulting Company; Hazel N. Dukes, NAACP New York State Conference; José Garcia, Surdna Foundation; Michael Garner, Metropolitan Transportation Authority; Robert Greene, National Association of Investment Companies; Javier H. Valdes, Make the Road New

York; Jay Hershenson, City University of New York; Jill Houghton, Disability:IN; Gary LaBarbera, Building and Construction Trades Council of Greater New York; Bertha Lewis, The Black Institute; Jonathan Lovitz, National LGBT Chamber of Commerce; Annie Minguez, Good Shepherd Services; Marc Morial, National Urban League; Ana Oliveira, New York Women’s Foundation; Quentin Roach, Merck & Co.; Lillian Rodriguez Lopez, The Coca-Cola Company; Bazah Roohi, American Council of Minority Women; Reverend Al Sharpton, National Action Network; Hong Shing Lee, Chinatown Manpower Project; Ruben Taborda, Johnson & Johnson; Abigail Vazquez, Aspen Institute; Elizabeth Velez, Velez Organization; Rosie von Lila, New American Alliance; Bonnie Wong, Asian Women in Business; Joset B. Wright-Lacy, National Minority Supplier Development Council; and Charles Yoon, Yoon & Kim LLP/Council of Korean Americans.

Comptroller Stringer thanks the M/WBE community for important contribution to this report, including:

Miriam Abramowitz, Court Street Office Supplies; Quenia Abreu, Women’s Chamber of Commerce; Roben Allong, Lightbeam Communications; Nestor Anavitate, Base One Security Patrol, Tyron Barrington, BARRINGTON GROUP; Kyana Beckles, Leverage Assessments, Inc.; Aliki Besson, TNT Staffing; Gereld Boffa, RCI Technologies; Jean Brewster, Garth Group Consulting; Natasha Bryan, Alpha Ridge Inc.; Cynthia Cox, Health and Wellness Ministry; Jerrod Delaine, Carthage Real Estate Advisors; Stephanie DeVane, National Urban League; Isseu Diouf Campbell, Afrikanspot LLC; Karen DiPeri, HMG Plus Inc.; Mahyla Espinoza, Re-Earth of Stroudsburg Inc; Juliette Fairley; Jackie Flynn,TNT Staffing; Keith Ginsberg, Maureen Data Systems; Jay Hershenson, City University of New York; Marion Hindenburg, Mrs. Paper; Kevin Hudson, Eriksen Translations Inc.; Ayo Jemiri, CG GLOBAL MANAGEMENT SOLUTIONS, LLC.; Andrea Katz, Ideon, Inc.; Helen Kogan, Basic Moving; Carter Larde, Penda Aiken; Julie Liu, Centsible House, Inc.; Susan Logan, RedStream Technology; Gloria Lovece, Infrastructure Unlimited Inc.; Yen Mac, ICM; Kimberly Mitchell, Young Professional Staffing Solutions; Tim Murphy, BRS RELOCATION; Phuong Nguyen, Partners in Company; Maryann Pagano, BlackHawk Data; Divya Pandya, CLS Inc., Sergio Paneque, NewGov Strategies; Jennifer Portland, Portland Spreadworks, LLC dba Excel Rain Man; Shantanu Rana, Louder Communications; Robin Richie, WOMEN: LEVEL UP NYC/Imagine That! With Robin Richie; Denene Rodney, Zebra Strategies; Santos Rodriguez, Building & Construction Trades Council of Greater New York; Andre Robinson, PcDoc4U LLC; Karen Ross, Sharp Decisions; Daphany Sanchez, Kinetic Communities Consulting; Zeeshan Sandhu, JPCL Engineering; Tamecca Seril, Element 9; Michael Serrano, MAS DYNAMICS LLC.; Blair Smith, UMEZ; Amira Strasser, Applied Research Investments LLC.; Freda Thomas, Business Management Consultant; Jessica Wilkins, Base One Security; and Robin Wilson, Robin Wilson Home.

Endnotes

[1]U.S. Small Business Administration Office of Advocacy, “Small Business Facts: Spotlight on Minority-Owned Employer Businesses,” May 2019: https://cdn.advocacy.sba.gov/wp-content/uploads/2019/05/31131339/Small-Business-Facts-Spotlight-on-Minority-Owned-Employer-Businesses.pdf.

[2] United States Census Bureau. “2012-2016 American Community Survey 5-Year Estimates.”

[3] “Dinkins plan gives minority concerns more in contracts” The New York Times, February 11, 1992: https:// www.nytimes.com/1992/02/11/nyregion/dinkins-plan-gives-minority-concerns-more-in-contracts.html.

[4] $1.8 billion Ahead of Projections, Mayor de Blasio Announces New Goal to Award $20 Billion to M/WBEs by FY 2025”, May 30, 2018: https://www1.nyc.gov/office-of-the-mayor/news/277-18/-1-8-billion-ahead-pro- jections-mayor-de-blasio-new-goal-award-20-billion-to.

[5] New York City Council Intro. 1293-A-2018: https://legistar.council.nyc.gov/LegislationDetail.aspx-?ID=3776475&GUID=140B19AA-8A79-4DF1-9A21-BB277797201F.

[6] Women.nyc: City Launches New Program to Create New Affordable Lines of Credit.” The Official Website of the City of New York, 6 Mar. 2019, www1.nyc.gov/office-of-the-mayor/news/128-19/women-nyc-city- launches-new-program-goldman-sachs-10-000-small-businesses-fundation-.

[7] City Announces Initiative Exceeds Goal And Serves Over 6,000 Women Entrepreneurs In Three Years, www1.nyc.gov/site/sbs/about/pr20181128_WENYCMilestone.page.

[8] National Mentoring Month: City Announces New Mentors For Program That Facilitates Women Supporting Women, https://www1.nyc.gov/site/sbs/about/pr20190131_NewWEConnectMentors.page.

[9] Newly Streamlined Online Portal Creates Easier Path To City Contracting For Minority And Women-Owned Businesses, www1.nyc.gov/site/sbs/about/pr20190514_SBSConnect.page.

[10] “De Blasio Administration reaches milestone goal of 9,000 City-certified M/WBEs” https://www1.nyc.gov/of- fice-of-the-mayor/news/333-19/de-blasio-administration-reaches-milestone-goal-9-000-city-certified-m-wbes.

[11] NYC Small Business Services, “SBS Launches Black Entrepreneurship Initiative ‘BE NYC’ To Help More Black-Owned Businesses Start and Grow,” September 12, 2019, https://www1.nyc.gov/site/sbs/about/ pr20190912_benyc.page.

[12] City of Richmond v. J.A. Croson Co. 488 U.S. 489 (1989)

[13] “Dinkins plan gives minority concerns more in contracts” The New York Times, February 11, 1992: https://www.nytimes.com/1992/02/11/nyregion/dinkins-plan-gives-minority-concerns-more-in-contracts.html.

[14] “Giuliani Revamps Minority Program on City Contracts.” The New York Times, January 25, 1994: https://www.nytimes.com/1994/01/25/nyregion/giuliani-revamps-minority-program-on-city-contracts.html.

[15] New York City Council, Int. 0727-2005: https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=444904&GUID=F981C035-E957-4306-887E-81E640208014&Options=ID%7CText%7C&Search=727-a.

[16] Local Law 129 of 2005: http://ddcftp.nyc.gov/inet/pdf/LocalLaw129.pdf.

[17] New York City Council, Int. 0911-2012: https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1189797&GUID=2729B38A-BC05-4393-9857-3295E345C694&Options=ID%7CText%7C&Search=0911-a.

[18] “Mayor de Blasio and Counsel to the Mayor and M/WBE Director Maya Wiley Launch Advisory Council on Minority and Women-Owned Business Enterprises,” December 14, 2015: https://www1.nyc.gov/office-of-the-mayor/news/934-15/mayor-de-blasio-counsel-the-mayor-m-wbe-director-maya-wiley-launch-advisory-council-on.

[19] “Mayor de Blasio Announces Bold new Vision for the City’s M/WBE Program,” September 28, 2016: https://www1.nyc.gov/office-of-the-mayor/news/775-16/mayor-de-blasio-bold-new-vision-the-city-s-m-wbe-program/#/0.

[20] “$1.8 Billion Ahead of Projections, Mayor de Blasio Announces New Goal to Award $20 Billion to M/WBEs by FY 2025,” May 30, 2018: https://www1.nyc.gov/office-of-the-mayor/news/277-18/-1-8-billion-ahead-projections-mayor-de-blasio-new-goal-award-20-billion-to.

[21] “De Blasio Administration Reaches Milestone Goal of 9,000 City-Certified M/WBEs.” The Official Website of the City of New York, 8 July 2019, www1.nyc.gov/office-of-the-mayor/news/333-19/de-blasio-administration-reaches-milestone-goal-9-000-city-certified-m-wbes.

[22] New York City Council Int. No. 1293-2018: https://legistar.council.nyc.gov/LegislationDetail.aspx-?ID=3776475&GUID=140B19AA-8A79-4DF1-9A21-BB277797201F.

[23] New York City Council Intro. 1452-2019: https://legistar.council.nyc.gov/LegislationDetail.aspx-?ID=3872955&GUID=391F7DE2-91E6-4D0C-9CAC-2AC8A166BF0E&Options=&Search=.

[24] New York State Senate Bill S06575/New York State Assembly Bill A08414: https://assembly.state.ny.us/ leg/?default_fld=&leg_video=&bn=A08414&term=2019&Summary=Y.

[25] State of New York 2016 M/WBE Disparity Study Personal net Worth Final Report, June 2017, https://esd. ny.gov/sites/default/files/Vol_%20III_NYS_PersonalNetWorth.pdf.

[26] Albany Business Review, “Cuomo vetoes change to M/WBE requirements” January 2, 2018: https://www. bizjournals.com/albany/news/2018/01/02/cuomo-vetoes-change-to-M/WBE-requirements.html.

[27] New York State Senate Bill S06575/New York State Assembly Bill A08414: https://assembly.state.ny.us/ leg/?default_fld=&leg_video=&bn=A08414&term=2019&Summary=Y.

[28] New York State Senate Bill S06418-A/New York State Assembly Bill A08407: https://assembly.state.ny.us/ leg/?default_fld=&leg_video=&bn=A08407&term=2019&Summary=Y.

[29] New York State Senate Bill S6513B https://www.nysenate.gov/legislation/bills/2017/s6513.

[30] The Procurement Policy Board, composed of representatives and appointees from the Mayor’s Office and Comptroller’s Office, is authorized to promote and put into effect rules governing the procurement of goods, services, and construction by the City of New York: https://www1.nyc.gov/site/mocs/legal-forms/ about-procurement-policy-board-ppb.page.

[31] Rules of the City of New York, M/WBE Noncompetitive Small Purchase Provisions, Effective November 5, 2018: https://rules.cityofnewyork.us/content/mwbe-noncompetitive-small-purchase-provisions#target-Text=The%20M%2FWBE%20Noncompetitive%20Small,not%20exceeding%20%24150%2C000%20with- out%20competition.

[32] Median spending.

[33] Local Law 1 of 2013, http://www.nyc.gov/html/ddc/downloads/pdf/obo/NYC_Local_Law_1.pdf

[34] $938.6 million was not subject to City laws. $753 million was instead subject to Federal or State M/WBE or DBE programs goals. $185 million were task orders stemming from master agreements that were listed as not subject to Local Law 129, which is a previous iteration of the City’s M/WBE law.

[35] When the City enters into master agreements, M/WBE utilization goals are set at the task order level rather than at the master agreement level. $250 million in master agreements were included in this analysis, and each of these had contract documents stating the intention to set goals at the task order level.

[36] Mayor’s Office of Contract Services, Economic Opportunities for M/WBEs Under Local Law 1 of 2013, 2019 Citywide Indicators Reports: https://www1.nyc.gov/site/mocs/reporting/citywide-indicators/econom- ic-opportunities-for-mwbe-under-local-law-1-of-2013.page.

[37] “De Blasio Administration reaches milestone goal of 9,000 City-certified M/WBEs,” July 8, 2019: https:// www1.nyc.gov/office-of-the-mayor/news/503-18/onenyc-mayor-de-blasio-city-awarded-more-10-billion-m- wbes-since-2015.

[38] De Blasio Administration reaches milestone goal of 9,000 City-certified M/WBEs, July 8, 2019, https:// www1.nyc.gov/office-of-the-mayor/news/333-19/de-blasio-administration-reaches-milestone-goal-9-000- city-certified-m-wbes.

[39] The U.S. General Services Administration provides federal guidelines on conducting market research to arrive at the most suitable approach to acquiring goods and services. Federal Acquisition Regulation Part 10- Market Research, https://www.acquisition.gov/content/part-10-market-research.

[40] Office of the NYC Comptroller, Q2 2019 NYC Quarterly Economic Update, August 8, 2019, https://comptroller.nyc.gov/reports/new-york-city-quarterly-economic-update/.

[41] New York Building Congress. “U.S. Census data shows over a quarter of a million construction industry workers in New York City,” January 29, 2018: https://www.buildingcongress.com/news/press-releases/US- CENSUS-DATA-SHOWS-OVER-A-QUARTER-OF-A-MILLION-CONSTRUCTION-INDUSTRY-WORKERS-IN-NEW-YORK-CITY.html.

[42] City of Philadelphia Department of Commerce, Office of Economic Opportunity, “Annual Disparity Study, Fiscal Year 2018,” https://www.phila.gov/media/20190604141616/oeo-disparity-study-fy18-employment-report.pdf.

[43] Keen Independent Research, “Kansas City Workforce Disparity Study,” March 2019, https://www.keenindependent.com/kcmoworkforcedisparitystudy/.

[44] Empire State Development, “State of New York 2016 M/WBE Disparity Study Workforce Study Final Report,” May 2017, https://esd.ny.gov/sites/default/files/Vol_IV_NYS_WorkforceStudy.pdf.

[45] New York State Assembly Bill A08414/New York State Senate Bill S06575: https://assembly.state.ny.us/leg/?default_fld=&bn=S06575&term=2019&Summary=Y&Actions=Y&Text=Y&Committee%26nbsp- Votes=Y&Floor%26nbspVotes=Y.

[46] City Council Int. No. 1452-A-2019: https://legistar.council.nyc.gov/LegislationDetail.aspx-?ID=3872955&GUID=391F7DE2-91E6-4D0C-9CAC-2AC8A166BF0E&Options=ID|Text|&Search=minority+owned+business.