NYC Comptroller’s Annual Report Finds That City Contracting with Minority/Women-Owned Business Enterprises Continues to Falter Under Adams Administration

New York, NY – In his office’s Annual Report on M/WBE Procurement, New York City Comptroller Brad Lander found persistent inequities in City contracting with Minority/Women-Owned Business Enterprises (M/WBEs) in fiscal year (FY) 2024. In FY24, M/WBEs secured a meager 6% of the total $34.6 billion awarded for contracts citywide. Although the City slightly increased the share of M/WBEs’ contract dollars from FY23 (5%), the actual dollar amount, $2.1 billion in FY24, lags behind the total M/WBEs’ contract dollars just two years ago.

“Despite having one of the nation’s most diverse community of business owners, these findings frustratingly show that M/WBEs have fewer City dollars in their collective pockets than at the start of the Adams administration,” said Comptroller Brad Lander. “With the Trump administration’s recent attacks on diversity, equity, and inclusion at the federal level, New York City must take the lead to address past and present inequities. I urge the Adams administration to take up the recommendations I am putting forward to ensure we distribute City dollars fairly.”

The Comptroller’s Annual Report on M/WBE Procurement presents a detailed analysis of contract registration data, including information broken down by City agency, contract type, industry, and M/WBE subcategory, as well as historical trends to evaluate the City’s performance. This year’s M/WBE report includes new dynamic charts to make the report’s top findings easy for New Yorkers to digest and download. Key findings from this year’s analysis include:

M/WBEs Don’t Get a Fair Share: 

• Out of $34.6 billion in new prime contracts and purchase orders (POs) the Adams administration registered in FY24, only 6% went to M/WBEs.

• While 6% reflects a slightly higher share than the year prior (5%), the actual dollar amount awarded to M/WBEs, $2.1 billion, remains stagnant compared to FY23 and less than the $2.4 billion awarded in FY22.

• M/WBEs represent just 17% of contracts and POs value subject to M/WBE participation goals under the much narrower number of contracts specifically identified by Local Law (LL) 174 as a focus for M/WBE participation. This is up from 10% in FY23, which was unusually low because of one large construction contract, and returns roughly to the level of FY22.

• While the City awarded more contracts and POs to M/WBEs in FY24, these contracts are lower in value on average than those won by businesses owned by white men. Even among contracts subject to LL 174, the average dollar value of a business contract with a white-male-owned business was more than six times greater than an M/WBE contract — $3.10 million compared to just under $470,000.

• The City awarded less than 2% of the value of City contracts in FY24 to Black-owned M/WBEs, Asian American WBEs, Hispanic WBEs, and Native American M/WBEs.

• Even among awarded M/WBEs, disparities exist across gender and racial and ethnic lines. Women-owned minority businesses account for just 6% of all registered contracts and POs subject to LL 174 goals and a mere 3% of the total value.

• Only about one-in-five (21%) of the City’ certified M/WBEs actually entered into a new contract, subcontract, or PO in FY24 – roughly the same share as in FY23.

Contracts are later-than-ever:  

• The City registered nearly three-in-four (72%) contracts awarded to M/WBEs late, up from 61% in the prior fiscal year. As our recent analysis into the City’s contract retroactivity problem makes clear, agency-related processes account for the vast majority of these delays. M/WBE “Small” Purchase contracting is living up to its name, but not its potential:

• Following a change to State law championed by the Comptroller’s Office and City Hall, on average City agencies awarded more to M/WBEs via the small purchase method—approximately $245,000 in FY24, up from just under $185,000 in FY23—but are still falling far short of the maximum $1.5 million award.

“Master” Contracts of Disguise: 

• The City’s Master Agreements greatly overinflate the contract value actually going toward M/WBEs. Agencies only spent around half of the $2.06 billion in reported M/WBE master agreement value for completed contracts in the report’s lookback period (leaving $986 million unspent) and therefore inaccurately reported towards M/WBE utilization totals.

Submerged Contract Data: 

• Subcontracting is an essential vehicle for M/WBEs to work with the City, and many prime vendors are required to subcontract work to fulfill M/WBE participation goals. However, only about 10% of eligible City contracts recorded a subcontractor on the City’s reporting website, even though a much greater are hiring subcontractors. Additionally, the Department of Education (“DOE”) does not require its vendors to record subcontractor activity at all.

The report also ranks individual agencies’ use of M/WBEs, comparing the performance of agencies of similar procurement portfolio sizes.

• Top performers: Department of Parks and Recreation (large), Administration for Children’s Services (moderate), Human Resources Administration (small), Department of Youth and Community Development (micro)

• Lowest performers: Department of Transportation (large), Department of Homeless Services (moderate), Small Business Services (small), Business Integrity Commission (micro).

This year’s report makes clear that the City needs to do more work to level the playing field for M/WBEs. Despite the critical need for reform, the City under the Adams administration made little-to-no progress increasing equity in procurement. Of the 16 recommendations Comptroller Lander put forward in his annual reports, the City completed one recommendation last year– securing an increase in the M/WBE small purchase method threshold – and took no steps to address half of them. While procurement policies and systems are complex and present challenges for agency staff and vendors alike, our City must do better to serve our diverse communities and the businesses that contribute to our vibrant economy. The previously published M/WBE contracting recommendations, underscored in this year’s report, point toward a path forward.

These recommendations include:  

1. To support M/WBE access to higher-value competitive contracts, the City should establish prequalified lists of M/WBEs at all City agencies; to date, only six agencies have done so. The City should also take steps to increase the use of M/WBEs in human services contracting.

1. To leverage flexibility where it is available, the City should more fully maximize discretionary awards, including ensuring wider and higher-dollar use of the M/WBE small purchase method.

1. To better resource contracting staff across agencies, the City should prioritize the basic step of updating and revising agency materials to support M/WBE goal-setting—which the City neglected to do.

1. To cut red tape and help M/WBEs navigate the procurement process, the City should create a one-stop shop for current and planned contracting opportunities and make M/WBE procurement data more accessible.

Read the FY24 M/WBE Contracts Report here.

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