Guest Op-Ed: Holding agencies accountable for M/WBE spending

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 identifying as people of color.

As the city’s chief financial officer, it is my job not only to scrutinize our budget for waste, fraud and abuse, but also to envision what our economy will look like decades down the line. Part of this is understanding how diversity—from the factory floor to the boardroom—is an economic development imperative.

A robust minority and women-owned business enterprise (M/WBE) program not only makes government more efficient by increasing competition, but also helps foster an inclusive economy of shared prosperity.

As a recent Department of Commerce study showed, minority-owned businesses’ success is essential to reducing the high rate of unemployment that continues to plague many minority communities.

However, 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 report—“Making the Grade”—that gives 32 city agencies, including my own, a letter grade for M/WBE procurement based on target goals laid out in the most recent amendments to the city’s M/WBE program, including procurement goals for African-American, Hispanic-American, Asian-American and Women-owned firms across four categories: Construction, Professional Services, Standard Services, and Goods. Only two agencies secured better than a “C” and the majority of agencies were issued “Ds” and “Fs.”

Of the over $5.7 billion spending reviewed, Women-owned businesses received just $92.8 million dollars—1.7 percent. That’s unacceptable and we 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 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 a program within the comptroller’s office that can serve as a model for other agencies.

Just as restaurant letter grades have led to declines in violations of the health and safety code, M/WBE letter grades will 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.

Our goal is not to attack agencies, but to provide data-driven analysis that will boost M/WBE procurement and, in turn, promote economic growth across our great city.

Scott M. Stringer is New York City comptroller.