When the most populous city in the United States needed to understand how minority and women-owned business enterprises (M/WBEs) were faring in the competition for local government contracts, city leaders turned to the firm they knew they could depend on for thoroughness, accuracy, and integrity.
In February 2015, the City of New York (NYC or City) selected MGT to conduct what would turn out to be one of the largest and most sweeping disparity studies ever completed. The study included purchases from July 1, 2006-June 30, 2015, totaling $87,269,054,086 of procurement and contracting — the largest procurement contract volume analyzed in any disparity study.
MGT analyzed this public spending while gathering evidence from thousands of businesses and individuals to develop a comprehensive set of recommendations to further the city’s goals for fairness and equity in public procurement.
Finalized and released in 2018, the study followed several earlier efforts in 1992, 2005, and 2012. Those studies had informed the creation and subsequent expansion of the City’s M/WBE programs, regulations, and participation goals. NYC believed its programs had been successful in starting to level the playing field and create opportunities for historically disadvantaged businesses seeking City contracts. Now City officials wanted to verify that the success was real and establish a factual basis for the continuation and possible further expansion of the M/WBE programs.
The MGT Diversity and Inclusion team had its work cut out for it. New York City is not only the largest and most densely populated city in the country, but it also has the country’s largest municipal economy and is among the world’s most culturally and ethnically diverse – it’s estimated that as many as 800 different languages are spoken in NYC!
The study examined City contracts awarded between July 1, 2006, and June 30, 2015. These contracts reflected more than $87 billion in public spending on goods and services across the selected areas of Architecture and Engineering, Construction, Professional Services, Standardized Services, and Goods or Commodities.
While the effort required to analyze those public contracts was substantial, perhaps the most noteworthy element of the study’s data gathering was the MGT-led public outreach. The multilingual, multimedia outreach featured messaging in English, Spanish, Chinese, Korean, and Haitian Creole distributed across digital and print ads, radio ads, and postings on social media. The study team reached over 100,000 businesses and business groups by email and phone, and community meetings were held in each of the City’s five boroughs. Ultimately more than 5,000 business owners and representatives provided direct input through surveys, interviews, focus groups, and testimony.
The study found substantial and significant disparities in virtually every procurement category and M/WBE classification. These statistical findings were further reinforced by the anecdotal experience of City vendors who perceived barriers throughout the procurement process that included process issues themselves, certification challenges, financial obstacles, and the behavior of prime contractors.
Because of these disparities, MGT recommended the NYC M/WBE program continue and supported the continuation of the City’s aspirational goal of 30 percent M/WBE utilization. The report also called for increased goals in industry-specific areas and expansion of the program with the following changes:
- Increase a $100,000 contract cap in the Goods or Commodities category.
- Include Asian American firms in the M/WBE program’s Professional Services category.
- Expand the minority categories to include Native American firms.
Today, armed with the results of the MGT Disparity Study, the Mayor’s Office of Minority and Women-owned Business Enterprises continues its work to expand opportunities across the City. In July 2019, the City achieved its goal of 9,000 City-certified M/WBEs – doubling the pool of vendors in less than three years. In that same month, the governor signed into law an expansion of the M/WBE program that included among its provisions the MGT-recommended increase of the Goods or Commodities contract cap enabling the City to make discretionary awards to M/WBEs of up to $500,000. Meanwhile, as of this writing, the City continues to make steady progress toward its goals of awarding $25 billion to M/WBEs by end of FY 2025 and awarding 30 percent of the value of all City contracts to M/WBEs by end of FY 2021.
