New York City is failing its minority- and women-owned businesses, annual report finds

Comptroller Stringer’s annual Making the Grade Report reveals that New York City fails to do business with more than 80 percent of minority- and women-owned business enterprises (MWBE). 

The report, published annually since 2014 by the Office of the New York City Comptroller Scott M. Stringer, evaluates the performance of the City’s MWBE program and makes recommendations for its improvement. 

This year’s report for the 2021 fiscal year found that out of $30.4 billion in contracts awarded by the City in 2021, only $1.166 billion (3.8 percent) was awarded to MWBEs. Since 2015, the share of MWBEs receiving City dollars has never exceeded 22 percent. The 2021 report also examined the rollout of Chief Diversity Officers across the country, following an Executive Order that called for appointing Chief Diversity Officers within every New York City agency. 

NYC receives “C-” overall, but fails in other areas 

Based on the report’s findings, Comptroller Stringer announced that the City fell to a “C-” Grade for MWBE Spending in fiscal year 2021 after two consecutive passing “C” grades. However, the city failed in other areas earning a “D” with Hispanic American- and women-owned businesses, and an “F” with African American-owned businesses. 

Additional Highlights 

  • The City has nearly tripled the number of certified MWBE firms since 2015. However, of more than 10,500 certified MWBEs, 8,886—84 percent—did not receive City spending in 2021. The share of certified MWBEs receiving City dollars has never exceeded 22 percent since 2015.
  • The City spent $1.27 billion with M/WBEs, an additional $261 million from 2020 and an increase of more than $900 million since 2014.
  • Since 2014, the City has improved its grades with Asian Americans, Hispanic Americans, and women-owned businesses, but it has been unable to improve its “F” grade with African American-owned businesses over the last eight years. In 2021, the City earned a “B” grade with Asian American-owned businesses. 
  • Two mayoral agencies: The Commission on Human Rights and Department for the Aging earned their fifth consecutive “A” grades; both spent more than 50 percent of their Local Law 1-eligible dollars with MWBEs.
  • The Department of Transportation received an “F” grade, spending less than five percent of its Local Law 1-eligible dollars with MWBEs.
  • The Comptroller’s Office earned its third consecutive “A” grade. Over the last eight years, the Comptroller’s Office increased its MWBE spending from 13 percent in 2013 to approximately 53 percent in 2021.
  • In 2020, Comptroller Stringer announced that the Office’s registration process would now include a rigorous review of MWBE goals on City contracts. Between November 2020 and May 2021, the Comptroller’s Office registered 63 contracts subject to Local Law 1. Of these, 42 contracts, or about 67 percent, had MWBE goals below 30 percent.

New York City Comptroller Scott M. Stringer (Photo Source)

Recommendations for incoming administration to increase opportunities for MWBEs

As the current administration prepares to leave office, Comptroller Stringer puts forth recommendations to reduce barriers and increase opportunities for MWBEs and urges the next cohort of citywide leadership to prioritize diversity, equity, and inclusion within their first 100 days of office.

“Over the last eight years, my office has given voice to solutions from MWBEs directly on how the City can better connect them with opportunities, which has led to real change. But there is still room for significant improvement,” said Comptroller Stringer. “As this administration prepares to leave office, it is clear that the City, from the next Mayor and Comptroller to the next City Council, have abundant opportunities to address the systemic inequities experienced by communities of color especially as we continue to rebuild our economy amid the COVID-19 pandemic.”

The first step is for all incoming Citywide officials to appoint executive-level Chief Diversity Officers. Per the report’s recommendations, “the mayoral CDO should oversee the rollout of the City’s programs designed to increase diversity and inclusion within the City, and they should also play a role in the City’s Budget and should have oversight over agency Chief Diversity Officers to ensure a unified citywide inclusion effort.” 

Next, City leaders should adopt the Rooney Rule to ensure diversity in their cabinets. The Rooney Rule, first adopted by the National Football League, requires that women and people of color are included in every future CEO search. 

Additionally, the next Comptroller should conduct a racial equity audit of the City’s agencies. With the signing of President Biden’s Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, all federal agencies have been mandated to perform an equity assessment to address systemic barriers erected by the government which have adversely impacted communities of color.

You might be interested: New America Alliance CEO Solange Brooks says, “Diversity is one of the elements of success”

Finally, Comptroller Stringer suggests that the next Mayor should create a plan to close the gap between certification and receiving City spending for MWBEs. In the last eight years, the list of certified MWBEs in the City has tripled from just 4,000 to almost 11,000 businesses. However, no more than 2,000 MWBEs have ever received City contract dollars in a given year. Within their first 100 days, the next Mayor should create a plan to close the gap between the number of people in the program and the number of MWBEs that win contracts.

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