New York Law Strengthens Minority- and Women-Owned Businesses, Forgets Locals

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The Equity Factor

New York Law Strengthens Minority- and Women-Owned Businesses, Forgets Locals

Mayor Michael Bloomberg has done a lot to help New York City’s minority- and women-owned businesses grow. Now, the next mayor should make sure publicly funded projects go to businesses owned by local minorities and women.

In 2005 New York City Mayor Michael Bloomberg signed Local Law 129, which promoted government contracting opportunities for certified minority- and women-owned businesses (MWBE). The number of certified MWBEs skyrocketed from 700 in 2005 to more than 3,500, winning about $3 billion in the process.

On July 1 an expansion of Local Law 129, Local Law 1, goes into effect. Another step in Bloomberg’s efforts to strengthen New York’s MWBEs, the expansion removes a $1 million cap now part of the law. Up until this point, certified MWBEs could only apply for city contracts that were $1 million or smaller. Which, when you think about it, is patently insane. Yes, many MWBEs are smaller companies that might have fewer resources, but why stunt growth?

“The cap was always to keep us from growing, obviously. Because women really can’t handle anything bigger, I think was the attitude,” Lina Gottesman, president of Altus, a specialty contracting company, told me. “Thank god our growth isn’t stunted any longer and we have a little bit more growth potential.”

The cap was a result of a disparity study from 2005 that determined that there were not enough MWBE firms with the capacity to work on contracts over $1 million, according to Merideth Weber from New York City’s Small Business Services. If you want to take the high road here, you can say the cap was lifted because Local Law 129 fostered business growth.

But what’s still missing from this law — and New York City procurement in general — is parameters to make sure city contracts go out to city-owned businesses.

“I have been bidding on city projects for over 20 years,” Gottesman said, “and I have been beat out many a time by a company that is not from New York State, not from New York City. And it’s very discouraging because there’s nothing that I can do.”

The problem that Gottesman and other local contractors run into is nothing new: They have to pay union wages. So their bids are more expensive. And while you can’t blame the city for watching its bottom line, it’s not unreasonable to call for more strict measures to ensure that publicly funded projects go to companies paying city taxes.

New York is a global economy, so it’s difficult for the five boroughs to close off their borders for public bids. But if we’re going to pay more attention to MWBEs and the procurement process, we need to examine how more local businesses can cash in on big-city contracts.

I’ve written about Colorado’s recently passed Keep Jobs In Colorado act, which requires 80 percent of workers on publicly funded constructed projects be Colorado residents. It’s a good model for cities and states looking to boost local businesses and, in turn, make sure their tax base stays afloat. Or, god forbid, increases.

Staunch capitalists will argue that this goes against the pillars of a free market. But there’s plenty of private construction going on in New York City — which is probably more lucrative than some of the public contracts — and it would be smart business if the majority of those publicly-funded projects went to local workers.

The Equity Factor is made possible with the support of the Surdna Foundation.

Bill Bradley is a writer and reporter living in Brooklyn. His work has appeared in Deadspin, GQ, and Vanity Fair, among others.

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Tags: new york cityjobseconomic developmentsmall businessreal estateequity factormichael bloomberg

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