Lawmakers expect to take at least two years to reform the state’s Minority and Women-Owned Business Enterprise program, and say they plan to pass a one-year extender before the program expires next year.
Article 15-A within state Executive Law sets the parameters for state-certified MWBEs, which the Legislature reviews and renews every five years, sunsets in 2024.
State law requires the Legislature to conduct a study to review discrimination in awarding state contracts and the need for the program, which is meant to ease barriers and promote economic equity for businesses owned by women and minority New Yorkers. The study must be done for the program to continue, but lawmakers have not started the work.
“We’re not going to be able to do it by next year, definitely not,” Assemblywoman Rodneyse Bichotte Hermelyn said Tuesday.
The Brooklyn Democrat says the study, mandated and funded in past state law, will take about a year, with the additional year for lawmakers to consider the data and recommendations.
“I can guarantee you that we will be looking to expand in make the program a little bit more robust,” she said.
Empire State Development is expected to make updated announcements about the progress of the disparity study, projected dates to renew 15-A at its MWBE forum Nov. 14
New York has an annual target of awarding at least one-third of its contracts to companies owned by women and people of color. It was a goal the state met in 2021 at 30.5%.
Bichotte Hermelyn said while the state is meeting its 30% goal, disparities persist as contracts often favor larger companies.
“It really depends on what is the makeup of the 30%,” she said. “Is it 100 small businesses, or is it just one or two, that’s taking up the vast majority of those businesses? …That’s why we have legislation that would allow us to see the breakdown of these reports, the breakdown of the awards. How long does it take for them to get paid?”
Advocates have floated implementing a tiered system for MWBEs depending on annual profits and number of workers to ensure smaller businesses or companies in smaller markets aren’t overlooked.
Bichotte Hermelyn says she will be focused on improving the certification process, education for businesses eligible to get certifed and increasing MWBEs access to grants and other assistance.
“Whatever, we cannot put in the same legislation we will do it separately,” she added.
The Legislature expanded eligibility for MWBEs when the law was last renewed in 2019, including increasing the threshold for a business owner’s personal networth and income threshold to become certified.
Advocates are concerned about strengthening legal protections for MWBEs in the next after the U.S. Supreme Court overturned the use of affirmative action in college admissions earlier this year.
“It has to take into account that Supreme Court case and include provisions that would be impervious to legal challenges to ensure that equity can still be part of the state contracting process,” said Valerie White, senior executive director with Local Initiative Support Corp. New York.
Neville Greaves is a housing developer finishing a project in Rochester. The president of 587 LLC is in the final stages of applying for his state MWBE certification. He says the process is long and can be cumbersome to reach approval, which could deter participation.
“It’s all about networking,” he said. “You have to talk to the people who know, and the people who know will steer you in the direction you want to go.”
Housing developer Desmonde Monroe, president & CEO of the Monroe Group LLC, agreed becoming a state-certified MWBE was a difficult and lengthy process.
Monroe knows MWBE owners who have not won a contract since getting certified and do not plan to renew it. Greaves recounted similar conversations with other MWBEs who say they haven’t felt the required effort and netted results were worth it.
“That becomes a problem because we need to stay certified so we can see the [statewide] numbers,” Monroe said.
But Monroe argues higher MWBE participation cannot be solved with greater program oversight or funding alone. For example, awarding vendors can check a box and request a waiver to not grant contracts to MWBE companies, and are not mandated to prove their efforts in including a minority- or woman-owned business.
“The MWBEs are out there and are actually begging for the contracts, they’re begging to be included in the system,” Monroe said. “There’s a line outside.”
MWBEs face different barriers across the state, Greaves said, with steeper competition in downstate metropolitan areas. Communities outside New York City rely more on local connections when awarding contracts.
“Upstate, it’s much more tight-knit — everybody knows everybody; everybody bats for everybody in each other’s corner,” Greaves said. “And you may come into their waters and seem as an outsider. How do you move past that? You make people feel that there’s something viable for them here as well.”
Lawmakers have started discussions with Empire State Development, the state’s economic development agency, which oversees the MWBEs certification process, as departments work to finalize their budget requests.
Advocates say they’ll push lawmakers to improve education and training for MWBEs so more participate in the program.
“There are some people trying, but they have an uphill battle,” Monroe said.”It’s about understanding that we are all part of this fabric and that having us in this space and giving us contracts also creates jobs, it creates things for our community and creates economic development and that’s what we need in this country.”
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