NYC adopts M/WBE plan

NYC adopts M/WBE plan – New York City’s Minority and Women-Owned Business Enterprise Program

Ingrid Sturgis

With the announcement of the New York City Minority and Women-Owned Business Enterprise (M/WBE) Program by Mayor David N. Dinkins, New York has finally joined other major cities that have adopted plans to address discrimination by race and gender in the awarding of city contracts. To document the necessity for the program, the city commissioned a study conducted by the New York-based National Economic Research Associates Inc. (NERA) of approximately 90,000 city contracts issued during fiscal years 1989 and 1990. “The study’s conclusions are striking,” says Dinkins. “Despite the fact that minority- and women-owned firms make up almost 25% of the business community, as prime contractors they received only 7% of the $2.3 billion of city spending analyzed.”

The M/WBE program, scheduled to begin at the start of the city’s fiscal year on July 1, represents the first time that New York has adopted a plan designed specifically to help minority- and women-owned businesses. The program’s minimum goal is to award 20% of all city contracts to these companies.

While cities such as Atlanta and Chicago mandated goals for city contract set-asides to minorities and women-owned businesses, Dinkins’ predessessor, Edward I. Koch, refused to endorse any plan requiring city agencies to do business with minorities and women during his 12-year tenure as mayor. The issue was a key component of Dinkins’ successful election campaign in 1989.

New York’s M/WBE program will be administered through the city’s Department of Business Services Division of Economic and Financial Opportunity. The division is charged with establishing systems to certify and track M/WBEs, and to establish standards and procedures for participating agencies to follow. The division will also monitor the performance of participating agencies, each of which will be responsible for their own program compliance.

Department of Business Services Commissioner Wallace L. Ford II says the plan conforms to the requirements mandated by the 1989 U.S. Supreme Court decision, J.A. Croson v. The City of Richmond, in which the high court ruled that race-based set-aside programs were discriminatory unless bias was documented. “The policy enunciated by Mayor Dinkins was constructed under the guidance and advice of the city’s law department,” says Ford, noting that 57% of New York residents are nonwhite citizens. “We are confident of the legal stance the mayor has taken.”

The NERA’s study examined contracts and business orders issued by city agencies for construction, professional and personal services, goods and supplies. It also compiled anecdotal evidence from public hearings, telephone and personal interviews and mailed surveys of a cross section of the city’s business community. The study outlined significant disparities in the awarding of city contracts. For example, on major construction contracts, the NERA found that black-owned businesses received only 17 cents of every dollar the city expected them to receive.

COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.

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