NYC gets an “F” grade for spending with African-American businesses

For the eighth consecutive year, New York City received an “F” rating for spending with businesses owned by African Americans.

The dismal note was published on Monday in City Comptroller Scott Stringer’s annual Making the Grade report on city spending with minority / women-owned businesses (M / WBE).

Although New Yorkers took to the streets from May of last year to demand racial justice for black Americans, Asian Americans and other minorities, the city received a “C” rating. – “in 2021 for his overall spending with M / WBE,” Stringer said.

NYC Controller Scott M. Stringer speaks at a 2o15 press conference calling on the city to provide more support to M / WBE entrepreneurs.

The “C-” grade represents a drop from the “C” passing grade of the last two years. The report also found that the City does not do business with 84% of M / WBEs.

“For the past eight years, my office has given voice to M / WBE solutions directly on how the city can better connect them to opportunities, which has led to real change,” Stringer said.

“But there is still room for significant improvement.”

What happened last year?

The City runs its M / WBE program to promote city government contracting and subcontracting opportunities for certified minority and women owned businesses.

Since taking office as Controller in 2014, Stringer has published an annual evaluation of the program.

The pandemic has been particularly difficult for minority-owned businesses due to institutional racism.

Kareem Bunton, of Bunton’s World Famous bar in Bushwick, spoke out against the racial inequalities he faces as a business owner. Photo: Jessy Edwards for BK Reader.

As Stringer points out, research has shown that Hispanic-owned businesses are 60% less likely to get loans from major banks than white-owned businesses. Businesses owned by Asian Americans have lost more revenue than any other ethnic group. And more than a third of black entrepreneurs say business conditions are deteriorating.

This is not helped by the fact that the city has failed to secure contracts with M / WBE with women and people of color during the pandemic. In fiscal 2021, the City awarded $ 30.4 billion in contracts, of which only $ 1.166 billion (or 3.8%) was awarded to M / WBE.

Some departments better than others

While the city has improved its ratings with Asian Americans, Hispanic Americans and women-owned businesses since 2014, it has not been able to improve its “F” rating with businesses owned by women. African Americans.

In fiscal 2021, the city achieved a “B” rating with Asian American-owned businesses, a “D” with Hispanic-American and women-owned businesses, and a ” F ”with businesses owned by African Americans.

Some city departments are better than others at contracting with M / WBES.

For example, the Commission on Human Rights and the Department of Aging received their fifth consecutive “A” grade. Both spent over 50% of their Local Law 1 eligible dollars with M / WBEs.

A stall at the Caton Flatbush Market sells colorful Caribbean wares. After months of closure due to the coronavirus crisis, market management feared that many suppliers could not remain in business. Photo: Alex Williamson / BK Reader

However, the Department of Transportation received an “F” rating, spending less than 5% of its local law 1 eligible dollars with M / WBEs.

During the pandemic, the Department of Parks and Recreation, the Financial Information Services Agency, the Department of Consumer and Worker Protection, the Health and Hospital Corporation, and the Department of Small Business Services have dealt exclusively with non-M / WBE for their COVID-19 related contracts. .

Meanwhile, in July 2021, New York City only certified four Native American-owned businesses and spent $ 0 with those businesses.

Recomendations

As the Stringer administration plans to leave the office for the new controller, he has recommendations for New York City to improve its relationship with M / WBE in the future.

First, he calls on all new city leaders to appoint diversity leaders at the executive level. He says all city leaders should embrace the Rooney Rule, which requires them to include women and people of color in every future CEO search.

Eric Adams. Photo: Krystalb97 / Creative Commons / https://bit.ly/2LPghcG

Stringer also asks the next comptroller to conduct a racial fairness check of the city’s agencies. He says the next mayor should create a plan to close the gap between certification and receiving city spending for M / WBEs.

Finally, Stringer believes New York City Council should reassess M / WBE legislation with a focus on goals.

“Council should consider ways in which the City can use its full purchasing power to set aggressive M / WBE targets wherever there is M / WBE availability,” he said.

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