By Lucy Jordan and Grace Smith
City Comptroller Bill Thompson yesterday released an audit criticizing the Department of Small Business Services for its lousy record of awarding contracts to businesses owned by women and minorities.
At a press conference outside City Hall, Thompson said that SBS had “demonstrated a stunning pattern of inaction” in improving the city agencies’ minority and women contracting record, and described SBS’s attitude to the program as one of “utter indifference.”
Our own Wayne Barrett pointed out last year that officials who were supposed to help improve city contracting with minorities seemed to be more focused on finding employees who would help the fortunes of the agency’s softball team.
The SBS is responsible for ensuring that city agencies adhere to the provisions of the Minority and Women-owned Business Enterprise (MWBE) program, which Bloomberg signed on the 2005 campaign trail while flanked by black endorsers like Queens Borough President Helen Marshall and State Senator Malcolm Smith. The MWBE bill, Local Law 129, was aimed at tackling the racial and gender disparities that a January 2005 City Council study found in the city’s contract procurement process. Today Thompson said the mayor used that bill to “curry favor” with minority groups and win their votes in his 2005 re-election.
“It was obviously meant… to try and make a statement about the mayor believing that minority businesses, and trying to help them, was important. It’s clear that 4 years later nothing has happened.”
Thompson called that the administration’s attempt to help minority and women owned businesses win more city contracts “an absolute failure.” Eleven out of the 23 city agencies required to submit MWEB plans were found to meet none of their MWEB goals. Of those who did, just 21 of 241 goals for prime contracts were met. The target goal for the city was to spend $108 million on contracts with MWBEs. But city agencies only managed 14 percent of that, with city-wide minority contracts totalling just under $15 million.
“In a city that awarded $19.2 billion in contracts in fiscal year 2008,” said Thompson, “there should have been room for these groups to grow and participate in this process. That they were denied this opportunity is simply inexcusable.”
This isn’t the first time that SBS has been scrutinized for its handling of the MWBE program. Public Advocate Betsy Gotbaum released a report in July 2007 entitled More Hassle Than It’s Worth: Problems with the City’s MWBE Program that contained similar criticisms. It charged that “of the city’s 600,000 Women and Minority Businesses, only 1,114 are certified by the city” and concluded that “the city’s MWBE program is generally perceived as ineffective for MWBEs.”
SBS didn’t seem to consider Gotbaum’s report urgent, as it took commissioner Robert Walsh about 9 months to respond. He subjected the comptroller to a slightly shorter delay: Thompson said SBS “ignored” initial requests for documents for five months.
Walsh’s 11-page response to the comptroller’s findings (Gotbaum received a 5-pager) claims SBS already meets three of the comptroller’s recommendations, and that the audit came during what LL 129 calls the “ramp-up” phase, a “three-year period of time explicitly designated in the law itself as the time frame when agencies are to be evaluated not merely on the goal numbers, but on the ‘steps… taken to initiate and ramp up their efforts to comply with the requirements.'” He writes “the citywide participation goal numbers are not rigid benchmarks” and that they “will uphold ‘goals’ requiring good-faith effort.”
The letter is dated September 23, the same day the Bloomberg administration put out a press release touting the success of the MWBE program, claiming “city contracts and subcontracts worth more than $1.2 billion have been awarded to the City’s certified MWBE firms.”
SBS confirmed with the Voice that this figure includes contracts with a value of over $1 million. LL 129, however, limits the contracts that are relevant under MWBE as those for $1 million and under. This ceiling is based on research carried out for the 2005 City Council disparity study, showing that while many minority-owned firms might not have the capacity to perform on larger contracts, they could compete on smaller ones. The limit serves to make sure that the success of one individual doesn’t mathematically skew the reality of racial inequality.
Asked for comment, Andrew Brent, Bloomberg’s deputy press secretary, said, “we don’t stop helping position minority-owned businesses to win bigger contracts just because the law encompasses only smaller ones.”