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City Falls Short on Contracts With Minority, Women-Owned Biz

NYC Comptroller's Report says just 5.3% of overall contract value went to M/WBEs in 2023.
black-owned business
Photo: Pexels/RODNAE Productions.

The city continues to come up short when it comes to equitable distribution of contracts among minority- and women-owned business enterprises (M/WBEs).

The Annual Report on M/WBE Procurement report by NYC Comptroller Brad Lander found that even though the city encourages higher M/WBE utilization, agencies registered only 9.8% of eligible contracts to M/WBE prime vendors in FY23.

Black, Hispanic, and women-of-color owned business each hover at just 1% of contract value.  

"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 news release. “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.” 

The report's key findings include: 

  • M/WBEs secured only 5.3% of the roughly $40 billion of new city contracts and purchase orders (POs) registered in FY 2023, compared to 5.2% in FY 2022. 

  • In the narrower universe of city contracts and POs subject to M/WBE participation goals under Local Law 174 (about one quarter of the City’s total procurement), M/WBEs represented just 9.8% in FY23, down from 16% in FY22. 

  • Black M/WBEs represented only 1.16% of registered value contracts and POs subject to LL 174 goals, Hispanic M/WBEs only 0.96%, and women-of-color combined only 1.03% 

  • M/WBEs are winning more contracts, but those contracts are for a fraction of the value of firms owned by white men. M/WBEs accounted for 60.3% of the total number of new contract registrations subject to LL 174 goals (up from 58.5% in FY 22). But the average value of a new contract registered in FY23 to M/WBE was just $511,000, less than one-ninth the $4.6 million average of contracts with non-certified firms. 

  • Only about 20% of all city-certified M/WBEs secured a contract, PO, or approved subcontract registered by the city in FY 2023. 

  • More than half of contracts awarded to M/WBEs are registered late, posing a significant challenge for smaller firms without sufficient working capital. This was even the case even for M/WBE Noncompetitive Small Purchase contracts, which were late nearly 70% of the time despite that agencies have the authority to self-register these actions.   

"Insufficient oversight for goal-setting in contracts also underscores the need for a more rigorous and extended examination and utilization process beyond the initial contract award," the report said. "The system for tracking subcontractors remains badly incomplete, making it difficult to meaningful utilize or measure subcontracting to M/WBEs."   

The report offers new recommendations, including to streamline connections between M/WBEs and agencies; survey underutilized firms; strengthen goal-setting procedures, support, and oversight; and increase utilization of M/WBE subcontractors in human services contracting.