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N.Y. Gov. Paterson Opens Supplier-Diversity Opportunities

Gov. David Paterson signed four bills into law yesterday to expand government procurement opportunities for minority- and women-owned business enterprises (MWBEs) in the Empire State and to help stimulate job creation.

“Our State is building on its proud history of opening the door to success for any New Yorker who has the talent, drive and passion for their business to succeed,” Paterson stated in a press release. “But there is still much work to be done to correct disparities in government contracting. By improving equity in the State procurement process and facilitating greater access for Minority and Women-Owned Business Enterprises, we help businesses thrive, and we will help our State recover from recession.”

The number of MWBEs based in New York has increased dramatically over the past several years. Take Black-owned businesses, which according to recently released data from the U.S. Census Bureau jumped 57.8 percent, from 129,329 firms in 2002 to 204,093 in 2007.

Paterson’s push to open state contract opportunities to more diverse suppliers began two years ago when he issued Executive Order No. 10 to form an MWBE task force. The result: MWBE contract participation has quadrupled, reports the governor’s office. “Under Governor Paterson’s leadership, minority and women firms have yielded an increase of $162 million in revenue from prior year levels,” states the release.

More specifically:

  • MWBE firms involved with the state’s investment banking and the issuance of debt rose from 4.2 percent in 2007 to 23.9 percent today
  • Thirteen percent of New York’s stimulus transportation projects have been allocated to state-designated Disadvantaged Business Enterprises, totaling $146 million and creating about 3,500 new or saved jobs

Supplier-Diversity Disparities

With current MWBE availability levels at 28.92 percent in the New York market, reports the state’s Department of Economic Development 468-page study “The State of Minority- and Women-Owned Business Enterprise: Evidence From NY,” contracting opportunities “are substantially lower than those that we would expect to observe if commercial markets operated in a race- and gender-neutral manner.” Paterson’s sweeping mandates, which will impact state agencies, public authorities and others, have been designed to close the disparities gap.

Bill No. 297 (S.8312/A.11525): Raises the cap on discretionary purchases that a state agency can award to MWBEs or small businesses from $100,000 to $200,000. This legislation is subject to the agency’s own internal controls but not based on competitive procurement procedures.

Bill No. 298 (S.8313/A.11526): Expands contracting practices of public authorities granting increased opportunities for MWBE participation. In addition, this law requires that the procurement guidelines for each state public authority include the designation of one or more senior staff to oversee the authority’s MWBE program. It also requires that procurements be conducted “to achieve the authority’s MWBE goals to the maximum feasible extent.”

Governor’s Program Bill No. 299 (S.8314/A.11527): Strengthens New York state’s MWBE contracting program and “authorizes a new and more thorough disparity study before the provisions relating to the MWBE program expires in 2014, including in-depth review of contractors’ hiring and promotional practices.” The bill also creates a new position of chief diversity officer, responsible for overseeing the MWBE program and equal workforce representation.

Emerging Investment Managers Bill (S.6888/A.9976): Addresses non-executive agencies that control large pools of investment dollars, including the comptroller, the state insurance fund and the deferred compensation board. According to the governor’s office, “This legislation will provide emerging investment managers the ability to invest with MWBE financial institutions and to adopt a strategy that motivates investments in underserved regions of the State.”

Michael Jones-Bey, executive director of the state’s Economic Development Department’s Division of Minority and Women-Owned Business Development, welcomes Paterson’s changes. “We have made tremendous progress under this governor, yet we have had to build our program without the tools and legal authority necessary for maximum success,” he says. “This legislation provides us with the ability to build a more robust MWBE program that will rival the best of any state in the nation.”

DiversityInc, a veteran-owned business, will also be implementing enhanced supplier-diversity metrics in The 2011 DiversityInc Top 50 Companies for Diversity¨ survey. For more information, contact bfrankel@DiversityInc.com.

1 Comment

  • Anonymous

    Can you and your company help get something like this program started in Memphis, TN. Their are company’s down here that are contraced to use mwbe’s but are not, please help.

    Mark

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