New York City sucks when it comes to awarding contracts to women and minority-owned businesses, according to the city comptroller office’s grading scale, as detailed in its 2018 report. Most of the city’s departments received a “D” for the fourth consecutive year for doling out a minuscule $1 billion in contracts (just 5.5 percent) to minority-owned enterprises — that’s out of $19.3 billion awarded in 2018.
For African-Americans, New York City got an “F” in 2018. The city got the same grade a year earlier.
While several city departments told The Root they don’t agree with the comptroller’s conclusions, none of those dismal figures came as a surprise to the more than thirty African-American small business owners who listened to Comptroller Scott Stringer review his office’s findings this morning, March 15, on how poorly city departments have progressed in making the bidding for billions of dollars in contract dollars more accessible.
The report was originally published in October, but the comptroller convened this meeting to update attendees on the city’s progress. According to his office, the numbers haven’t changed much.
Love Malone, CEO of advertising recruiting firm The Group, told Stringer that city departments overload businesses with too much paperwork, making it nearly impossible to break into the contractor pool.
“New York City is the advertising capital of the world, and you can’t get into the agencies,” Malone told Stringer, as fellow business owners nodded in agreement. “I have contracts with Nike and Estée Lauder, but can’t do an ad for the subway.”
Tamecca Seril, CEO of consulting firm Element 9, said many contracts require a RFP, or request for proposal, that often places unfair benchmarks for businesses to be eligible for contract funds. Potential contractors can be cut from consideration if their businesses have not been contracting for a certain number of years or generating a certain amount of money.
“The number one problem with being a [minority and women-owned business enterprise] is essentially having to be re-validated every single time,” Seril said as she left the meeting early. “It’s not enough to be certified. It’s not even enough to demonstrate that you have x amount of work. For instance, when you get certified, they make you upload all of your actual contracts to show proof of evidence that you’ve done business. But that’s never enough for them. Why are we regurgitating the same information over and over and over again when we have it on file? You see us in the comptroller’s online checkbook. You see we have city contracts. Why do I have to demonstrate this over and over and over again?”
The Root was exclusively allowed to sit in on Stringer’s report and speak with the minority business owners about their experiences. Applying for contracts is a full-time job because of the rigorous paperwork the city requires but doesn’t provide much guidance for how to successfully complete it, many of the business owners complained. Others said that while Stringer’s efforts to grade city departments’ progress are laudable, there are no real consequences when those agencies do not comply with the comptroller’s recommendations on diversity.
There is no clear threshold for which city agencies should strive.
Rev. Al Sharpton of the National Action Network, who was also in attendance, told the attendees that diversity in New York contracting needs to be included in the city charter so that agencies and those who do business with them are obligated to do business with black-owned businesses.
“One of the things that trouble me, when I go into any city and I look at the skyline, you do not see black or Latino or brown, or, in many cases, women involved in building or developing any of the major skylines in America,” he said. “Try landing in LaGuardia, and tell me how many of us are involved in building the skyline of New York?”
Some city departments that earned an F for failing to adequately award contracts to black-owned businesses include buildings, the fire department, police, law, finance and design, and homeless services.
Other ethnic groups are doing somewhat better than black-owned businesses. Latinx-owned businesses and women-owned firms earned a “D” grade in 2018. Asian-American-owned businesses came out on top, letter grade-wise anyway with, drum roll please, a “C.”
One of the challenges of getting more black-owned businesses into New York City’s contract money pool is getting them city-certified as minority and women-owned business enterprises (or M/WBEs). The comptroller’s report shows the city has made promising increases in certified M/WBEs from 5,259 in 2017 to 6,679 in 2018—an increase of 1,420 firms. But getting certification doesn’t guarantee contracts from the city, which is made clear by the paltry 5.5 percent of contracts going to minority-owned businesses.
Several city departments, including the mayor’s office, challenged the comptroller’s methodology in statements to The Root.
The law department’s managing attorney Muriel Goode-Trufant said that they are “firmly committed to the purposes and goals of the City’s MWBE Program.” Furthermore, Goode-Trufan said “a significant percentage of our discretionary procurements are for expert witnesses, in specialties where there are no certified MWBE firms. We have made several efforts to encourage certification in these areas and will continue to do so.”
A spokesperson for the department added that the comptroller’s report is not the best metric for measuring how much they have expanded opportunities for MWBEs.
A rep from Parks and Recreation claims to rank No. 2 among city-agencies in MWBE engagement, citing that since 2014, “we’ve increased awards to African American businesses by 650 percent. Overall, we’ve awarded $422 million to M/WBEs since 2015. We look forward to taking this progress even further.”
The Office of New York City Mayor Bill de Blasio told The Root the city has awarded more than $10 billion to minority- and women-owned businesses since de Blasio first became mayor, with $3.7 billion awarded this year alone, the office claims.
“While we appreciate the Comptroller’s advocacy, his miscalculation of this progress discourages businesses from participating in our marketplace,” Raul A. Contreras, spokesperson for City Hall, told The Root.
Another sentiment shared by one agency that declined to go on record is that they, too, are constrained by the tough requirements for black-owned businesses to be certified by the city, making the comptroller’s assessments unfair and lacking in context.
Towards the end of the meeting, one African-American business owner stood up and said he’s tired of good-faith but ultimately fruitless efforts and pressed Stringer to tell him what guarantees he could offer the group. Stringer politely told the gentleman his office would hold more meetings during which the man could air his grievances in more detail.
After the meeting, Stringer told The Root he didn’t blame the man for being impatient.
“I respect people’s frustrations,” he said. “I feel it, too. But if you look at the body of work over the last six years on diversity issues, this office has become the thought leader in the country on these issues. But I understand people saying, ‘How is my life going to change.’ And that’s the bottom line of government because sometimes politicians get annoyed when people don’t appreciate all that is being done on their behalf, and I don’t take that view. [The gentleman] should be angry and pissed off. This is discrimination at the highest levels.”
Business owners at the meeting called for a required threshold for all agencies to meet, and penalties when they don’t. Stringer said he doesn’t have the power to demand that (he claims the mayor does). He said calling for agencies to get chief diversity officers and continue grading agencies in the awarding contract dollars process is a step in the right direction.
Ivy Newman, whose advertising agency specializes in community-based messaging, said after the meeting that 80 percent of her firm’s budget is comprised of city contract dollars. And while she respects Stringer’s efforts to hold the city accountable, she isn’t going to be satisfied until there is a citywide, legally-binding mandate requiring agencies to award money to minority-owned businesses.
“The only way to increase involvement of [minority-owned businesses] is to set a percentage-based mandate that’s in the city charter that is passed via ballot initiative,” she said. “I think that it should be 10 percent or more. That way, every agency has to meet that mandate. If not, there need to be repercussions.”