9 months ago
NEW YORK — Businesses owned by women and people of color continue to represent a tiny share of spending on city contracts, according to a new report from city Comptroller Brad Lander.
Just 5.3 percent of the city’s roughly $40 billion in annual contract spending went to minority- and women-owned business enterprises, known as M/WBEs, in the 2023 fiscal year, the report found.
Even for procurement that was subject to M/WBE participation goals, businesses owned by women and people of color won contracts representing less than 10 percent of contract spending.
The report noted that M/WBEs are winning more city contracts than in prior fiscal years, but said the “pattern of historic discrimination largely continues.”
“M/WBEs deserve their fair share of City contracts, yet this year’s disappointing numbers fall woefully short of where we need to be,” Lander said in a statement. “The Adams Administration has taken steps to improve equity in City contracting — but the data tells a story of how far there is to go.”
“With stronger management and coordination, we can reverse these unacceptable trends and move toward fairness in City contracting,” he added.
For contracts subject to the participation goals, M/WBEs made up about 62 percent of new contract registrations and purchase orders. But they accounted for just 9.8 percent of the total value of the contracts.
Meanwhile, firms owned by white men received the more valuable contracts: The average value of a new contract registered to those firms was $4.6 million in fiscal year 2023, compared to just $511,000 for M/WBEs.
And just 20 percent of M/WBEs had a contract, purchase order or approved subcontract registered by the city, the report found. More than half of the contracts awarded to those businesses were registered late, posing a “particular challenge for smaller firms without sufficient working capital to endure long wait times for payment,” the report noted.
The figures in the comptroller’s report did not encompass non-mayoral agencies, like the New York City Housing Authority and Health + Hospitals, which are not covered under a local law focused on expanding M/WBE participation.
City Hall said with those agencies included, the total value of contracts awarded to M/WBEs reached $6.3 billion, compared to $2.1 billion in spending cited in Lander’s report.
Lander laid out a series of recommendations to diversify city contracting, including surveying certified M/WBEs to better understand why many don’t do business with the city and strengthening tools to connect M/WBEs to contracting opportunities.
The report also called for increasing M/WBE representation in human services contacts, which are exempt from the participation goals but made up almost half the volume and value of registered contracts in fiscal year 2023.
“We have lobbied, with you alongside us, our partners in the State Legislature to successfully pass legislation on Citywide mentoring, increased thresholds, and breaking down barriers to entry that disproportionately impact our M/WBEs,” Michael Garner, the city’s chief business diversity officer, wrote in a letter to Lander responding to the report.
“This administration has undertaken a culture change when it comes to our M/WBEs, instituting frequent, City Hall led meetings to hold agencies accountable for their contracting decisions and drive on the ground success,” he continued.
“The Adams administration has delivered a record-breaking year for MWBEs, including delivering the highest number of contracts to MWBEs in city history, working with our partners in Albany to pass critical reforms, and awarding over $6 billion to MWBE firms," mayoral spokesperson Liz Garcia said in a statement. "While we will review the report more fully, it is clear it does not reflect the full scope of our efforts for M/WBEs — and we look forward to advancing our bold moonshot goal of $60 billion in MWBE contracts by FY30 and creating a more equitable procurement system for all.”
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