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Calls current MWBE status a “National Embarrassment”...
Unveils plan to enhance leadership, build capacity, focus on market opportunities, improve management and generate disparity studies
Click here, Spitzer-Paterson Plan on Reforms in Five Critical Areas
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| Left to right: Jerusha Ramos, Sandra Webster, Melanie McEvoy, Senator David Paterson, Carolyn Sevos, Sallie Mullins Thompson |
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Queens, NY, September 19, 2006 — Candidate for Lieutenant Governor David A. Paterson today unveiled a plan to “break down the barriers to opportunity” and significantly step up New York State’s investment in minority- and women-owned businesses.
Branding the current investment a “national embarrassment,” Paterson and his gubernatorial running mate, Eliot Spitzer, said the plan is fashioned to reverse the downward spiral of opportunity afforded businesses owned by women and minorities. Minority- and Women-Owned Business Enterprises, or MWBEs, have encountered sagging progress in receiving work on State projects over the last 12 years.
“If Eliot Spitzer and I win in November, we are going to break down the barriers to opportunity for MWBEs and change the culture of our government,” Paterson said in announcing the proposal before more than 200 business and community leaders at York College in Queens. “I am absolutely committed to developing MWBEs in New York after a 12-year period of abuse and neglect.”
The Spitzer-Paterson plan calls for revamping the State’s MWBE program by targeting five critical areas: the provision of strong leadership, capacity building, a focus on market opportunities, effective management systems, and implementing disparity studies to demonstrate legal standing for MWBE government support.
“New York needs strong leadership to empower minority- and women-owned businesses and the Spitzer-Paterson team is ready to provide it,” Spitzer said. “Our administration stands ready to pave the way for business owners to do just that from Day One.”
Paterson, who has served as the New York State Senate’s Minority Leader since 2002, has urged Governor Pataki to reform MWBEs before, but to no avail. Now, his running mate has stressed that Paterson will spearhead MWBE reforms if elected in November.
This is the fourth proposal unveiled by Paterson to address reforms in State government. Previously, he has announced plans to address stem cell research, energy and domestic violence in New York State. MWBE, he said, is of particular importance.
Statewide, there are 956,114 small businesses in New York owned by women, black Americans, Latinos, Asians and Alaskan natives, according to the U.S. Small Business Administration’s Office of the Advocacy. New York State has more MWBEs than any other state except California and Texas and the most black American-owned firms in the country, ranks second in its numbers of women-owned and Asian-owned firms, and fourth in the number of Latino-owned firms, the agency reported.
However, the statistics show that the doors of opportunity have not swung open for these firms, and that other states have established many more MWBE opportunities:
- MWBE participation in New York State contracts plummeted from $822 million in 1999-2000 to $509 million in 2001-2002, according to the New York State Comptroller’s Office. The current MWBE utilization rate under Governor Pataki is 5%. In 2002-2003, 1.0% of all state contracts went to Asian-owned firms, .74% went to Hispanic-owned firms, and only 0.66% went to black-owned firms.
- A 2005 study by Mason Tillman Associates for the New York City Council found that from 1997 to 2002, the City awarded $18.8 billion in contracts, including $6 billion involving construction. Yet, in the City, where minorities comprise 65 percent of the population, 85.89 percent of the money for all construction contracts was awarded to firms owned by white males. Minority-owned businesses received only 7.27 percent of those contracts, and white, women-owned businesses received another 6.85 percent.
- MWBEs make up almost 57 percent of all construction firms in New York City’s market area but received only 29 percent of the prime construction dollars in contracts under $1 million, according to the study. Yet, white, male-owned construction firms comprised only 43.12 percent of City construction firms and received 71.47 percent of the prime New York City construction dollars in contracts under $1 million.
- From 1997 to 2002, black Americans represented 16.72 percent of the available construction firms in New York City yet received 1.7 percent of the City government’s construction prime contracts of under $1 million, the study found.
- “When it comes to MWBE, New York is a national embarrassment,” Paterson said, cautioning about his proposal: “This isn’t a call for racial and gender set-asides. This is a call for government to require that qualified MWBEs be given opportunities for contracts to develop the permanent capacity of our minority and women-owned business so that they can eventually compete on a level playing field, because right now, the playing field isn’t level.”
He added: “It’s economically significant, it’s politically significant, and it’s morally significant.”
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The Spitzer-Paterson Plan calls for Reforms in
Five Critical Areas:
• Leadership at the executive level
• Capacity building
• Focus on market opportunities
• Effective management systems
• Generating disparity studies
Leadership at the executive level
Under the Spitzer-Paterson plan, Governor Spitzer will issue an executive order to ensure equal opportunity for minority- and women-owned businesses. This order will outline a commitment supporting MWBEs in New York State and establish guiding principles for MWBE procurement utilization.
Further, this order will assist MWBE business development growth and urge compliance with the existing provisions of Article 15A of the Executive Law concerning MWBEs for both contracts and New York State agencies and authorities.
A Spitzer-Paterson administration additionally will establish an Executive Leadership Council, or ELC, which will be comprised of representatives from agencies and authorities with the largest budgets, including the Port Authority and the Metropolitan Transportation Authority, the Department of Health, and the SUNY system. The ELC will issue report cards monitoring individual agencies and their utilization of MWBEs.
Spitzer-Paterson will help create Community Benefit Agreements to leverage the benefits of development for the surrounding communities. Paterson credited the Southeast Queens community for demanding that its neighborhoods benefit from construction of the AirTran Terminal in Jamaica Station, which sparked the creation of a Community Oversight Committee and led to MWBEs receiving about $49.3 million in contracts, $10.6 million of which went to MWBEs in the surrounding communities.
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Capacity building
A cornerstone of the Spitzer-Paterson proposal will be to increase access to firms to bid on and complete projects.
The proposal calls for replicating a highly successful Mentor Protégé Program established by the New York City School Construction Authority, providing job training for MWBE firms on school construction contracts under $1 million. The program teaches MWBEs management and technical skills, and partners them with larger, more experienced firms, which mentor them through the process.
Further, a Spitzer-Paterson administration will work with banks, bonding companies and major corporations to build the competitive capacity of MWBE suppliers of goods and services. It also will create solutions to capital access issues through innovative programs that mirror, for instance, the Illinois Capital Access Program, which encourages financial institutions to make loans to small and new businesses that don't qualify under conventional lending policies.
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Focus on market opportunities
A Spitzer-Paterson administration will ensure that the New York State MWBE Division will maximize procurement for qualified MWBEs by improving access to information regarding contract opportunities.
Paterson said the administration will broaden the scope of the MWBE program to encompass banking, insurance and the sales of securities and bonds.
The proposal calls for using technology to help minority firms discover business opportunities. The state Division will improve its online, searchable database of certified MWBE firms for easier use and downloading by agencies, contractors and corporate America. Additionally, the Division will provide procurement directors with a list of capable firms eligible to compete for contracts with their agencies.
Paterson said he also wants to explore ways to increase opportunities for MWBEs in any development deals receiving state subsidies. Currently, certain projects receiving state funding through the Dormitory Authority and Housing Finances Agency are not required to ensure MWBE participation.
A Spitzer-Paterson administration, as well, will follow Florida’s lead and extend a commitment to assisting MWBEs to compete for contracts in the private sector.
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Effective management systems
New York State’s MWBE program will develop a customer service-oriented delivery model and implement a system that provides transparency, monitoring, accountability and enforcement.
Measures will be implemented to end bureaucratic inefficiencies such as certification delays and problems in accessing information.
A Spitzer-Paterson administration will insist on full compliance for timely utilization reporting. Currently, Paterson said, the State’s MWBE Division does not issue its annual report on a timely basis. In fiscal year 2000-2001, eight state agencies under Pataki had participation goals for minority firms and women firms of zero percent.
Further, the State’s current certification process must be simplified and made more efficient.
A 2004 report by New York State Comptroller Alan Hevesi found that New York State’s MWBE certification process is “cumbersome and inadequately controlled.” It now takes five months on average to become certified as an MWBE firm.
plan list >
Generating disparity studies
Under a Spitzer-Paterson administration, New York will undertake a series of disparity studies to measure actual MWBE procurement rates. Many State and local governments already have commissioned such examinations following a U.S. Supreme Court decision to provide the factual predicate to set reasonable MWBE goals.
Paterson said this research and analysis will allow New York State to create the factual predicates for setting reasonable goals based on the number of firms, capacity of firms and the market opportunity.
“MWBE development isn’t just about doing business in New York,” Paterson said. “It’s about the way New York sees itself. I am committed to supporting MWBE procurement in New York business life at every level, large and small, public and private.”
“If you don’t have shoes, it doesn’t matter if the playing field is level. If you’re not allowed on the field, it doesn’t matter if the game starts on time. So we need to level the playing field while making sure all the players are allowed to play. Then, and only then, can market competition reveal merit and the best firms can win.”
For more information on Eliot and David,
visit www.spitzerpaterson.com
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