A New York task force charged with increasing participation by minority and women-owned underwriters as senior managers yesterday
The recommendations on so-called minority and women-owned business enterprises, or MWBEs, affect the five state authorities that issue personal income tax bonds and are subject to approval by their boards.
The move toward a more uniform RFP and transparent process is critical, said Paul Williams Jr., who chairs the Minority and Women-Owned Business Enterprise Task Force and is the executive director of the Dormitory Authority of the State of New York.
"We will have made changes to our RFP that will recognize and value the experience firms have gained in other jurisdictions that apply to the kinds of issuances that they may be looking to work on here in New York state," Williams said.
One complaint voiced by MWBE firms at a hearing in September was that some RFPs set up a barrier to entry by requiring firms wishing to qualify to senior manage deals to already have senior manager underwriting experience on state deals.
"Changing that RFP to set the table for a more robust competition among these firms is one of the best things that has come out of these recommendations," Williams said.
The proposal also would create a centralized performance review database so that an issuer could evaluate how all underwriting firms did on deals with other issuers.
"One the frustrations we heard [from firms] was that the value that they brought to the table wasn't being recognized," he said. "We'll be in a much stronger position to know how the firms are performing and what they are doing."
The task force described the 20% target for participation by MWBE firms as an "aspirational goal." Williams said that currently MWBE firms serve as senior manager on less than 5% of state-backed issues.
"It would be a significant increase, assuming that things are put in place to help them to achieve it," he said. "It's a goal. Obviously it's based on firms stepping up to the plate and demonstrating their ability to handle this work."
Gov. David Paterson formed the task force in June by executive order. The task force comprises executive directors from agencies that issue personal income tax bonds - DASNY, the New York State Thruway Authority, the Empire State Development Corp., the New York State Housing Finance Agency, and the New York State Environmental Facilities Corp. - and three gubernatorial appointees.
The recommended practices would better give firms an opportunity demonstrate their expertise and skills, according to Samuel Ramirez, president and chief executive officer of Samuel A. Ramirez & Co.
"It gives one the idea that if you do a good a job hopefully you're rewarded with more business," he said. "That's what it's all about. It's earning the ability to do good work for different issuers."
The task force will also begin looking at ways to increase MWBE participation among bond counsel firms that work on state-backed debt issues. The first meeting to discuss that issue is expected to take place in the middle of November.
