Unveiling a new letter grading system for city agency spending with minority and women-owned business enterprises (M/WBEs), Comptroller Scott Stringer gave the City of New York an overall grade of “D” for the last fiscal year.
“New York City is spending more than $17 billion on goods and services each year, but less than 4 percent goes toward minority and women-owned business enterprises,” Stringer said. “When the city gets a ‘D’ for how well it is meeting its own goals, it’s clearly unacceptable.”
The city set its goals for M/WBE procurement in Local Law 1 of 2013. The Comptroller then released the grading system based on the Local Law 1 framework — determining each agency’s actual M/WBE spending and weighting results based on how agencies spend their budgets — and found that of 31 mayoral agencies, only two received “B” grades: the Department of Cultural Affairs and the Landmarks Preservation Committee.
On the other end of the spectrum, four departments received “F's”: the Department of Environmental Protection, Department of Finance, Department of Information Technology and Telecommunications and the Department of Sanitation.
The city has over 400,000 minority-owned firms and 300,000 women-owned firms, but the M/WBE share of city procurement dropped from a recent high of 5 percent in 2012 to 3.9 percent in 2014.
“It’s going to hurt, and it continues to hurt communities, because when we talk about income inequality and closing the wage gap, let’s face it, New York City’s not doing our part,” Stringer said.
“We can’t create opportunities for women and minority-owned businesses that will be located throughout the city. Those businesses will hire local. Those businesses will employ different people with new exciting ideas and opportunities, and we’ve closed the door to so many women and minority-owned businesses for so long.”
The comptroller also graded his own office because, he said, he “didn’t want this to be a political issue.” His office received a “C.”
Stringer said he immediately began to address the poor grade.
“I called our people in who handle the procurement of services that our office needs to operate, and I said, ‘How do I go from a C to an A?’” Stringer said. “There were a lot of ‘ums’ and pauses. And I said, ‘I want a plan for my office.’ Because I think we should lead by example.”
Stringer released the grades the same week Governor Andrew Cuomo said that the state’s M/WBE procurement goal is 30 percent.
Clearly, New York City is far from reaching that goal, but Stringer said he has hope. Some agencies, he said, contacted him immediately to discuss ways to improve their grades. Others, he said, he was surprised to see did not address the grades at all.
“I think you have some agencies in this city that are very committed to the goals of Local Law 1 and procurement, and then I think we’re going to find some agencies that are just slow to this process,” he said. “And we’re going to stay on them.”
The “Make the Grade” letter grading system will be utilized every year, with reports coming out analyzing the spending of the prior fiscal year. In order to improve grades, Stringer recommended that more agencies prepare utilization plans, offer enhanced training for M/WBE officers and hold themselves accountable for spending further down their supply chain.
“Improving our spending on M/WBEs is an economic and a social justice issue. It is unacceptable when not a single city agency can meet the standard set forth by our own laws,” Stringer said. “We need to take concrete steps to make sure that every company has an equal opportunity to compete to do business with the city.”