While touring minority-owned firm and city contractor Constructomics LLC in lower Manhattan on Monday, New York City Comptroller Scott Stringer asked: "Is the city paying you?"
"It looks right," the accountant responded.
Stringer said the stories for similar firms differ elsewhere. Myriad problems, he said, include prompt payment for woman- and minority-owned businesses, many of which typically have greater cash-flow burdens.
"The billing process is so painfully slow that for smaller firms it could be a death warrant," said Stringer.
Beyond operational problems, the overall share of $15.3 billion in city procurement with minority- and women-owned business enterprises, or MWBEs, is paltry, said Stringer. It dropped to 4.8% from 5.3% for fiscal 2016, prompting another D-plus grade in his third annual "
The study covered 32 city agencies and Stringer's own office.
Three agencies – the buildings and sanitation departments and the Business Integrity Commission – received F grades. Sanitation also earned an F the past two years.
"The results weren't pretty. While overall city MWBE procurement has gone up, the share with MWBEs has gone down. Minority and women business don't get a fair shot at success, and that simply is unacceptable," Stringer told reporters and business leaders at 40 Broad St. in the financial district.
Other businesses, including 12-year-old construction financing firm Constructomics, "are doing well in this space but can also identify some issues."
Stringer, whose office oversees city bond issuance and the $160 billion pension fund among other matters, said the city needs a full-time chief diversity officer who answers to the mayor.
Mayor Bill de Blasio's administration quickly fired back.
"Comptroller Stringer is wrong on the facts," said Richard Buery, deputy mayor for strategic policy initiatives and director of MWBEs. "Last year this administration awarded $697 million in contracts to MWBEs, a 52% increase in dollars from the year prior. Our contracts went to M/WBEs 14% of the time, up from 8% in the year prior.
"We are well on our way to awarding 30% of the value of our contracts to this important community of businesses. Comptroller Stringer's report is not an accurate measurement of the important progress this administration has made in improving city contracting and sharing the results of our city's economic progress with all our businesses."
Stringer called for a more comprehensive development program across all city agencies, which "at minimum" should consist of a pre-qualification for small businesses and MWBEs to compete against similarly sized firms for a dedicated pool of appropriately sized contracts; a mentorship program; and a streamlined certification process.
"The city has come a long way," said Alexis Peña, a principal and director of business development for Totem Development. "But what's missing is education, such as how to go through the surety bonding system. Another problem is access to capital."
The city has roughly 540,000 minority-owned and 414,000 women-owned firms. Only 1%, or 4,527, are certified with the city. Stringer's analysis found that merely 994 of the certified firms received city spending in 2016.
Cumbersome bureaucracy works against these firms, Stringer added.
"You think you're a certified MWBE and you're going to make a living and grow your business then you start knocking on the doors of city agencies and they basically say 'We're out to lunch, do not apply, we have no capacity to bring you in.'"
His report cited a multiplier effect, saying that in Chicago, black business owners are five times more likely to hire other black workers than white-owned businesses.
According to Stringer, elevating the percentage closer to the desired 30% will take time, as will an educational campaign.
"It's one of the most challenging and most difficult issues that we face because it's very hard to turn out 10,000 people for a rally on procurement reform," he said. "Nobody ever says 'no procurement, no peace.'"
Stringer on Tuesday was scheduled to host a roundtable with minority and women-owned business leaders.
He praised the Metropolitan Transportation Authority and School Construction Authority for developing programs that have substantially increased MWBE contracting in their respective agencies.
In the six years of the MTA's small business development program, it has awarded $197 million in prime contracts to small businesses, many of which are minority- or women-owned, creating 4,735 new direct jobs.
"The success of these programs can be attributed to their holistic nature," said Stringer.
"Both agencies offer a full range of support and development services to the small, local, minority- and women-owned businesses in their programs."
His office also released an
