View From Here: NYC Purchasing Promotes Inequality

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NYC Spending FY 2016 Source: NYC Comptroller By David Mark Greaves

By David Greaves

 

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NYC Population by Race – 2010 Census
Data Source from NYC Comptroller Website
Data Source from NYC Comptroller WebsiteBy David Greaves

(Note:  This column has been corrected due to a misattributed quote and includes the administration’s responses to questions.)

Despite efforts by the de Blasio Administration, the legacy of racism continues to cause New York City to spend its money in a way that is grotesquely unequal; promoting segregation, gentrification, poverty, crime, broken lives and lost futures. The accompanying illustrations show that African-Americans and Hispanics, representing over 50% of the population, together received less than 1 (one) % of the vendor spending in 2016. The city actually spends more with Black and Hispanic firms than calculated here, but the percentage of the NYC budget spent with Black and Hispanic firms that we do know about is a civic crime, and if the $16 billion ten-year plan for MWBE spending were for them alone, then we would be impressed. However, at the current Black and Hispanic share of the program, it is only promising a policy of an ever-increasing pie flaking off larger crumbs than before.

Last year, Comptroller Scott Stringer issued “Making the Grade”, a report on the progress the city was making in the area of MWBEs.   The report contained a number of recommendations such as enforcing the requirement that prime contractors report on the subcontractors they actually use, and that non-mayoral agencies be subject to all of the M/WBE reporting requirements. It was a call for accountability throughout the purchasing chain. Since then, the Small Business Services say, “From the beginning of this administration, we noticed that prime contractor utilization of the Payee Information Portal was low. This is also why the comptroller, in his own report, acknowledged that his data was incomplete and provided an inaccurate picture of the M/WBE subcontracting landscape. Utilization of the Payee Information Portal did not provide an accurate picture of the utilization of M/WBEs. However, we have seen utilization of the Payee Information Portal, along with utilization of M/WBEs, increase each fiscal year since the beginning of this administration. This requirement continues to be enforced”.

More hope is pinned to the state increasing to $200,000 the discretionary “small purchase” orders which would be impactful, as are the outreach efforts the administration is already making through the SBS program.

We also asked SBS if there was an effort to have the non-mayoral agencies, including the New York City Housing Authority, the School Construction Authority and the Department of Education, subject to the parameters of LL 1. They responded, “As agencies under the jurisdiction of both federal and state laws, agencies like NYCHA, the SCA and the DOE have different M/WBE legal requirements. Recognizing this, the administration implemented the OneNYC Plan for M/WBEs which goes above and beyond LL1 to provide reporting structures and M/WBE accountability to such city-affiliated entities. For the first time ever, the city is capturing and reporting on contract awards to M/WBEs at these agencies”.

All of these actions, while good for small businesses, can only be seen as the very first steps in a long journey to vendor equality and achievement of full economic rights.

We asked the comptroller and Small Business Services if it is possible for the share of public spending with Black and Hispanic businesses to ever look more like the Black and Hispanic percentages in the population.  If not, why not, and if so, what would have to be done, over what period of time, to make that happen? Comptroller Stringer issued a statement saying: “Every M/WBE firm in our city deserves a chance to compete for their fair share of the city’s $14 billion procurement budget. But too many M/WBE firms are stuck in first gear when it comes to competing for large contracts. That’s why we must empower all business owners by ensuring prime vendors use M/WBE subcontractors, pay them on time and support their growth. With a level playing field, more African-American and Hispanic business owners can bid on and win contracts which promotes competition, creates more jobs and grows our economy in all five boroughs.”

SBS responded by saying: “There are many successful minority and women-owned businesses for whom selling to government is not part of their growth plan.”

Will it ever be possible for the share of public spending with Black and Hispanic businesses to ever look more like the Black and Hispanic percentages in the population? Not the way the city calculates it, no.  The goal is not to increase spending to approximate population percentage, the goal is to decrease “disparity”.   The “Making the Grade” report describes the disparity discovery process this way: “Disparity Studies are commissioned by an agency to determine if there is disparity between the availability of firms owned by minorities and women in a market area and the utilization of those firms by an agency.”   Does this mean that if there are no Black or Hispanic firms available for the contract then there is no disparity?   Or, if there are 2 Black and Hispanic firms of 100 industry-wide, and both are being used, then again is there no disparity measured?  We’ve asked SBS for a clarification.

What we are certain what has to be done is that we have to insistently invest in widening the horizons of our young people and expanding the universe of Black and Hispanic businesses if we are to have any hope of having the economic engine of New York be a positive force for all.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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