BILL NUMBER: S9351

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the New York city charter, in relation to opportunities
for businesses owned by women and minorities

 
SUMMARY OF PROVISIONS:

Section one of this act would amend paragraph one of subdivision (i) of
section 311 of the New York City Charter, which currently allows the New
York City Procurement Policy Board to adopt rules for City agencies to
make procurements of goods, services, and construction not exceeding
$500,000 from MWBEs without a formal competitive process. This section
of the act would raise the MWBE procurement threshold to $1,000,000.

Section two of this act would amend paragraph three of subdivision (i)
of section 311 of the City Charter to update the dollar threshold of the
reporting provision associated with the MWBE procurements authorized in
paragraph one of such subdivision.

Section three of this act provides that this act would take effect imme-
              

diately.

 
REASONS FOR SUPPORT:

The most recent disparity studies conducted by both the State of New
York and the City of New York demonstrate that discrimination continues
to affect MWBEs seeking to do business in the market where the City
conducts its procurements.

The City has undertaken many efforts to address such discrimination,
including setting subcontractor participation goals for MWBEs and EBEs
pursuant to the program established pursuant to New York City Adminis-
trative Code section 6-129, the use of a procurement method to award
contracts to MWBEs without a formal competitive process, and the use of
the best value vendor selection technique authorized by the General
Municipal Law and the City Charter. In recent years, the State Legisla-
ture has provided the City with legislative tools to implement these
programs. See L. 2019, ch. 98; L. 2018, ch. 19; L.  2017, ch. 504. The
City has also launched a contract financing loan fund to improve access
to capital for MWBEs seeking to enter into and perform on City
contracts.

These steps, among others, have helped to triple the City's MWBE utili-
zation rate and more than double the total value of contracts awarded to
MWBE firms, compared with the corresponding levels in Fiscal Year 2015.
But disparities due to discrimination persist, and they have been
exacerbated by the economic effects of the COVID-19 pandemic. A recent
national analysis of MWBEs by the National Bureau of Economic Research
estimates that between February and April 2020, 41% of Black-owned busi-
nesses, 32% of Latino-owned businesses, and 26% of Asian American-owned
businesses closed either temporarily or permanently, while only 17% of
white-owned businesses closed.

Allowing the City to award contracts not exceeding $1,000,000 to MWBEs
without a formal competitive process would allow the City to procure a
broader range of contracts from MWBEs, and build on the City's previous
successes using these methods. A formal competitive procurement process
can be time consuming. The time required to complete such a competition
can be especially burdensome for MWBEs, which, because of historic
racial wealth gaps, typically do not have the cash cushions of wealthi-
er, larger non-MWBEs that have historically played a disproportionate
role in City contracting. The most recent increase in the MWBE procure-
ment threshold to $500,000, authorized by chapter 98 of 2019, led to a
20% increase in the average size of contract awards to MWBEs in the
first year following the implementation of this amendment.

Accordingly, the Mayor urges the earliest possible favorable consider-
ation of this proposal by the Legislature.

Respectfully submitted,

CHRISTOPHER G. ELLIS, Jr. Director