Stringer gave NYC a ‘D’ in spending on minority and women-owned businesses
More than two-thirds of city agencies earned “D”s or “F”s on Comptroller Scott M. Stringer’s inaugural letter grades assessing how well New York City government is procuring goods and services through minority and women-owned business enterprises (M/WBEs). The letter grades, outlined in the “Making the Grade” report released on Wednesday, are intended as a diagnostic tool for agencies to improve performance and transparency in M/WBE spending, increase competition in city procurement and save taxpayer dollars.
“New York City spends more than $17 billion on goods and services each year, but less than four percent goes toward Minority and Women-Owned Business Enterprises,” Stringer said. “When the city gets a ‘D’ for how well it is meeting its own goals, it’s clearly unacceptable. Growing the pie for M/WBE firms will be a key weapon in our battle against income inequality while increasing competition in procurement, driving down costs for taxpayers and creating jobs across all five boroughs.”
Local Law 1 of 2013 – which updated citywide goals for M/WBE procurement, broken down along ethnic and industry lines – provided the framework for the grading system. Thirty-one Mayoral Agencies and the Comptroller’s Office received grades, which are based on actual spending by City agencies. The criteria used to ascertain each Agency’s achievement against Local Law 1 goals included determining the total Local Law 1-eligible spending by each City agency, determining each agency’s actual spending across M/WBE categories and industries and weighting results based on how agencies spend their budgets (for example, if an agency spends 50 percent of its budget on construction, 50 percent of its grade is based on M/WBE utilization in construction.)
The citywide average for M/WBE spending as measured against Local Law 1 in FY14 was a grade of “D.” Just two agencies in the Comptroller’s report received a “B” grade: the Department of Cultural Affairs and the Landmarks Preservation Commission. Nine agencies received a “C,” including the Comptroller’s Office. Seventeen agencies received a grade of “D,” and four Mayoral Agencies received a failing grade.
New York City has more than 400,000 minority-owned firms and 300,000 women-owned firms, yet the M/WBE share of City procurement has dropped from a recent high of 5 percent in FY12 to only 3.9 percent in FY14. The Comptroller’s letter grades examine agency spending, not contracting, and excludes spending not subject to Local Law 1, such as human services.
“Improving our spending on M/WBEs is an economic and a social justice issue. It is unacceptable when not a single city agency can meet the standard set forth by our own laws. We need to take concrete steps to make sure that every company has an equal opportunity to compete to do business with the city. All agencies, and my office, must redouble efforts to help ensure our city’s economic future,” Stringer said.
Comptroller Stringer offered recommendations to improve Agency performance, including expanding the promise of Local Law 1 by having it boost the number of agencies required to prepare utilization plans, offer enhanced training to M/WBE officers and hold agencies accountable for spending further down their supply chain. Stringer also suggested increasing transparency, suggesting that city agencies have robust information available on M/WBEs on their websites to help guide business owners through the procurement process.
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