By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
The Mayor's Office of Contracts has submitted two reports to the City Council tracking the first year and a half of contract awards to MWBEs under SBS's new program. Both reports conceded that "the data does not yet reflect the levels of MWBE participation the City is aiming to achieve."
In fact, the percentage of contracts, by dollar value, going to Hispanic firms hit zero in 10 of 13 categories (such as "construction, $5,000 to $100,000") for the first half of fiscal year 2008, and zero in nine categories for black firms. On the other hand, non-minority women got zero dollars in a single category, and Asians in four. For blacks, the percentage declined in five categories compared with FY 2007, rose in one, and remained the same in seven—hardly an indication of progress. In the first six months of the current year, firms owned by non-minority women won $116 million in total contracts, while blacks won $7.8 million and Hispanics $5.1 million. In the first half of 2008, women-owned firms were awarded contracts valued at twice the amount for all of 2007, while black and Latino firms were on pace to earn just about as much as they did the year before.
There are a series of stark anomalies inside these numbers. Blacks received no prime contracts in construction in FY 2008; Asians got $19 million, women $13 million, and Hispanics $3.2 million. In 2007, women and Asians combined for $53 million in construction contracts; Hispanics received $5.3 million, and blacks got $550,020. Women-owned firms sold $11.4 million in goods to city agencies in the current fiscal year; the number for Hispanics is $987,143, and for blacks, $715,360. Even in the category of "micropurchases" (i.e., less than $5,000), women-owned companies received almost as much business as the combined totals for black- and Hispanic-owned firms. Hispanic firms got no subcontracts in construction and professional services, while blacks did a minuscule $2.6 million.
Research Assistants: Samuel Breidbart, Sarah Lavery, Shaunna Murphy, Shea O'Rourke, and John Wilwol
Walsh prefers to talk about how many more MWBE firms have been certified, though that's no measure of a program that's supposed to deliver contracts. He's also claimed in memos to the mayor that $152 million in MWBE contracts have been awarded, but women- and Asian-owned firms are reaping the overwhelming majority of those contracts. And very few of the contracts that Walsh is citing were actually awarded as part of the city's MWBE program, which is limited by LL 129 to contracts of $1 million or less. But the mayor's contract office cites these larger contracts—like a recent $83.2 million service contract—in its reports to the council anyway, though the new law has nothing to do with them. Without these giant awards, the MWBE numbers would be too dreadful to disclose.
But even those big MWBE wins went from a paltry 1.2 percent of all contracts above $1 million to a still-paltry 2.4 percent. As quick as the administration has been to note that rise in its reports to the City Council, it cites no figure for the growth of contracts below $1 million, which is the only real measure of whether the city is moving toward the contracting goals established under the law that Bloomberg actually signed. That's why, when asked in a separate phone interview if Bloomberg might be out of office before a goal-based MWBE program is "fully up and running," Walsh said matter-of-factly: "Yes, we will be." A few days after that interview, at a May 12 council hearing, Walsh announced a renewed determination to get the MWBE effort going, declaring that "over the next year and a half, my focus will be on helping MWBE firms be better prepared to bid on and win more contracts," and sounding as if the failings so far were attributable to the minority companies themselves.
The snail's pace of MWBE progress is partly a result of the Bloomberg administration's failure to complete a court-mandated study to determine whether a disparity exists between the number of available minority vendors and the city contracts they receive. The City Council released its own disparity study in 2005, and it was the council's San Francisco–based consultant who limited the provable discriminatory impact to contracts under $1 million. The study found that while many minority-owned firms might not have the capacity to perform on larger contracts, they could perform on smaller ones—and yet they still weren't getting their fair share. Walsh dismissed this study as "flawed" in a Voice interview, claiming that it contained sections from an earlier study done for another city, and also that it low-balled the impact on Asian and Latino firms. This is why the administration insisted on an updated study—and when Local Law 129 passed in 2005, it called for two more, one in 2007 and another in 2009.
However, SBS took almost a year to award the contract for the studies, leaving too little time for the research firm that it hired to complete the first phase by the April 2007 deadline. Walsh's deputy, Andrew Schwartz, acknowledges that the study "has been delayed on our side." And so SBS has decided to move on to the Phase II report, which is due a few months before Bloomberg's departure—virtually guaranteeing that the establishment of an enforceable program will be a challenge waiting for the next mayor. Candidates to replace Bloomberg may wind up making the same promises he did.