The de Blasio administration is seeking state legislation that would help the city hire more contractors owned by women and minorities, said Deputy Mayor Richard Buery, who is spearheading the effort.
State law limits the size of contracts the city can dole out as discretionary spending, among other constraints that Buery argues hamper the administration’s ability to spend money at such businesses. A state bill would lift the ceiling to $200,000—the same ceiling that state government has—from $20,000. It would also allow the creation of pre-qualified lists of minority and women-owned enterprises, MWBEs, meaning the firms could gain work without filing cumbersome proposals for every job.
“Businesses, they may have the know-how, they can do the work, but they may be new to city contracting, they may be inexperienced when it comes to how to compete for a bid, or frankly, the work might be too small for it to be worthwhile for a small business that didn’t have a big administrative infrastructure” to do all the required paperwork, Buery told Crain’s.
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The bill would also enable the city to set up a mentoring program and to choose contractors who do not offer the lowest bids on projects.
“Having this type of increase in discretion has to work hand-in-hand with a cultural change across agencies, to work with agencies to improve their procurement processes,” Buery said. “It has to work hand-in-hand with ambitious procurement goals around minority and women-owned businesses. All these things have to work together in lock-step. And again, if we had all these tools … that’s how you unleash opportunity.”
The city spends $15 billion to $17 billion on procurement annually, officials said. Of that, roughly a third is subject to the city’s MWBE targets (for example, contracts for nonprofits don’t count). The administration aims to contract out 30% of the value of that work to MWBEs by 2021, up from about 19% today. It contracted $696 million of work to MWBEs, about 14%, in fiscal 2016, and 8% in the previous year.
The Building Trades Employers Association, which released a study earlier this week describing a shortage of MWBEs that can fulfill city construction contracts, opposes the bill. The industry group cited the legislation’s low-bidder provision and prequalification list components, and said the measure should apply to all city and state agencies. BTEA does support the mentoring program piece.
“We look forward to working with the city on having this legislation passed with respect to the mentoring language as we believe that is a key to increasing the capacity of MWBE companies to win contracts, and working to amend the bill in the ways we outlined in our report,” BTEA President and CEO Louis Coletti said in an email.
The Senate bill is sponsored by Marisol Alcantara and Diane Savino, two city members of the Independent Democratic Conference, which caucuses with the Republicans. That affiliation enhances the chances of the bill passing the Senate but is a source of rising tension in the city.