Making the Grade: Holding Agencies Accountable for M/WBE Spending

An Op-Ed from Scott M. Stringer


New York City is as diverse as it’s ever been, with nearly 40 percent of our residents born outside the U.S., nearly 50 percent speaking a language other than English at home, and over 55 percent of New Yorkers identifying as people of color.


As the Chief Financial Officer of the City, it is my job to not only scrutinize our City budget for waste, fraud, and abuse, but also to look beyond the four-year financial plan to envision what our economy will look like decades down the line. Part of this effort is in understanding how diversity—from the factory floor to the boardroom and everywhere in-between—is an economic development imperative.


At the City level, a robust minority and women-owned business enterprise (M/WBE) program not only makes government more efficient for taxpayers by increasing competition in procurement, but also helps to foster an inclusive economy of shared prosperity throughout the five boroughs. As a recent Department of Commerce study showed, minority-owned businesses are “engine[s] of employment in emerging and minority communities,” and their success is essential to reducing the high rate of unemployment that continues to plague many minority communities in the wake of the Great Recession.


However, you wouldn’t know it by looking at how our City spends its taxpayer dollars to purchase goods and services—everything from office supplies and heavy machinery, to professional services and food for the City’s 1.1 million school children. In Fiscal Year 2014, only 3.9 percent of the City’s $17.8 billion procurement budget went to M/WBEs.


I recently issued a new report—“Making the Grade”—that gives 32 City agencies, including my own, a letter grade for M/WBE procurement. The grades are based on target goals laid out in the most recent amendments to the City’s M/WBE program.


Known as Local Law 1, these amendments include procurement goals for African-American, Hispanic-American, Asian-American, and Women-owned firms across four industry categories: Construction, Professional Services, Standard Services, and Goods.


The results should be troubling to every New Yorker who cares about the future of our City and its economy. Only two agencies secured better than a “C” and the majority of agencies were issued “Ds” and “Fs.” That’s not only an embarrassment; it’s costing taxpayers money and hurting our communities.


Of the over $5.7 billion in FY 2014 spending reviewed in my report, Women-owned businesses received just $92.8 million dollars—a total of 1.7%. That’s unacceptable and we, as a City must do something to change this immediately.


The fundamental goal of the gradebook is to press agencies to redouble their efforts to increase outreach to M/WBEs and ultimately get more contracts into the hands of these crucial job-creators.


But it doesn’t stop there. The report also provides a series of recommendations to strengthen the City’s M/WBE program, including:


  • Expanding the scope of contracts that fall under Local Law 1;
  • Improving City agency websites to provide more robust information about the procurement process;
  • Urging agencies to do a better job classifying contracts so that the public has access to fully transparent information; and
  • Building out a program within the Comptroller’s office that can serve as a model for other agencies to follow in expanding M/WBE procurement.


Just as restaurant letter grades have led to declines in violations of the health and safety code, these M/WBE letter grades will change the conversation about procurement in the City of New York and create an incentive for agencies to take concrete steps to ensure a level playing field for all who wish to do business with our City.


In the midst of the first great wave of progressive politics in America, Louis Brandeis wrote, “Publicity is justly commended as a remedy for social and industrial diseases…Sunlight is…the best of disinfectants.”  This idea still resonates over a century later. Although agencies may feel the sting of taking a bad grade home on their report card, our goal is not to attack agencies, but instead is to provide data-driven analysis that will boost M/WBE procurement by increasing transparency and accountability and, in turn, promote economic growth across our great city.



Scott M. Stringer is Comptroller of the City of New York

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