Mayor Michael R. Bloomberg today signed Executive Order 71 to increase the use of minority and women-owned businesses in City contracting. The Order directs the City's Department of Small Business Services (SBS) to establish a goals-based program for City agencies and their prime contractors to increase the pool of minority and women-owned businesses that are employed when government contracts are available. In June 2003, Mayor Bloomberg signed Executive Order 36 to assist minority and women-owned businesses to better compete for City contracts and more efficiently navigate the City's procurement process. Deputy Mayor for Policy Dennis Walcott, Deputy Mayor for Economic Development and Rebuilding Daniel L. Doctoroff, SBS Commissioner Robert W. Walsh, Regional Director of U.S. Department of Commerce Minority Business Development Agency Heyward Davenport, and SBS MWBE Advisory Board Member Elizabeth Velez joined Mayor Bloomberg at the signing of Executive Order 71.
"Small businesses, in particular those owned and operated by minority and women entrepreneurs, are the heart and soul of New York City's growing economy," said Mayor Bloomberg. "By lowering the barriers that have traditionally prevented minority and women owned businesses from competing for government contracts, we are reaffirming our commitment to spurring business growth, putting people to work, expanding our economy and creating a 'City of Opportunity' for all."
Under Executive Order 71, all City agencies will be responsible for submitting an annual procurement plan that includes detailed goals for employing certified minority and women-owned businesses. Agency plans will include the industries from which the organization purchases a significant amount of goods and services and the presence of minority and women-owned businesses in these industries. City agencies will be required to detail specific strategies to achieve an increase in the pool of minority and women-owned businesses which are awarded contracts. The City will track the performance of agencies in their use of minority and women-owned businesses and this data will be available annually when the Mayor's Management Report is issued.
"We've removed a number of the obstacles and made it easier for M/WBE firms to do business with New York City," said SBS Commissioner Robert Walsh. "The City's minority and women owned firms responded by certifying with the City in record numbers. Now we need to build on these accomplishments by holding City agencies and their prime contractors to a higher standard. By working with each agency, assessing their record and setting aggressive goals, we are taking stock of where the opportunities are and building a better program for the City's M/WBEs and disadvantaged individuals."
Executive Order 71 is expected to expand the pool of minority and women-owned businesses working with the City on large construction development and in construction related areas including architecture, engineering, professional and standard services. City agencies will be encouraged to employ minority and women-owned businesses and disadvantaged firms in three "dollar" categories. One covered category of contracts authorized by City agencies are micro-contracts for the purchase of goods and services less than $5,000. In the most recent fiscal year, there were more than $58.5 million in micro-purchase contracts. A second category that will be impacted by Executive Order 71 is "small" purchase contracts which range from $5,000 to $100,000. There was $119 million in "small" purchase contracts in the most recent fiscal year. The third category of contracts to be impacted by Executive Order 71 is contracts of less than $1 million. Prime construction contracts of less than $1 million total more than $234 million of all construction related contracts in the most recent fiscal year. Finally, prime contractors awarded City construction contracts will be required to provide evidence of their efforts for increasing the percentage of minority and women-owned businesses participating in subcontracts of $1 million or less. In the most recent fiscal year, there were more than $1.4 billion in such subcontracts.
In the next few months, SBS and the Mayor's Office of Contract Services will formally propose new rules for the inclusion of minority and women-owned businesses in the awarding of City contracts. These rules will establish goals, which will be set for minority and women-owned businesses, and expressed as a dollar figure and a percentage of overall contracts. SBS will also begin certification for a larger group of businesses that may claim "disadvantage," regardless of race or gender. Eligibility for certification as a Disadvantaged Business Enterprise (DBE) will include ownership by an individual who can prove social and economic disadvantage, mirroring guidelines established by the federal government. Draft rules are expected to be published in late fall and final rules are expected to be published next spring.
The success of the SBS program to increase the pool of minority and women-owned businesses employed by City agencies will be measured annually and after 5 years the City will conduct a comprehensive review to evaluate evidence of continuing disparity so as to restructure the initiative as necessary.
"The strategies announced today will result in new standards and a higher level of accountability in agency procurement which will ultimately allow us to leverage our purchasing power as an effective economic development tool," said Deputy Mayor Doctoroff.
"The program the Mayor is announcing today offers opportunity to minority and women-owned businesses to compete in the procurement marketplace and to grow their capacity," said Deputy Mayor Walcott. "As a result, we all benefit - minority and women-owned businesses and the City's taxpayers."
"I commend Mayor Bloomberg and his administration for the significant steps they have taken to strengthen the City's M/WBE Program," said Heyward Davenport, Regional Director of the U.S. Department of Commerce Minority Business Development Agency and Chair of the SBS M/WBE Advisory Board. "Working with the Department of Small Business Services over the past few years, we have made tremendous gains in building the capacity of the City's minority and woman-owned firms and creating new opportunities for them. This is critical work and will go a long way towards strengthening and diversifying the City's economy. This new Executive Order creates even more opportunities, and I look forward to continuing our work together."
In New York City today there are more than 200,000 small businesses that account for 1.5 million in private sector employment and $4.5 billion in annual tax revenues. Nearly one third of City businesses are owned and operated by minority entrepreneurs and more than a quarter are owned and operated by women.
In the past three years, SBS has made the certification of minority and women-owned firms easier, eliminated bureaucratic hurdles, implemented new technologies, built partnerships with the public and private sector, and better prepared minority and women-owned firms take on even larger contracts.