State Rebuilds MWBE Efforts

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Two state committees missed the Nov. 1 deadline for completing a pair of reports on how state agencies can increase contracting opportunities for minority- and women-owned businesses.

Gov. Eliot Spitzer signed Executive Order 8 in February creating the committees – one composed of agency heads and the other of corporate leaders – to look into how the state can diversify its vendors. The committees, both chaired by Lt. Gov. David Paterson, were due to publish their findings online one month ago.

The governor’s office declined to comment on the reports, but a spokesman did say drafts of both reports are being prepared and should now be published by Dec. 15. He said they were delayed because the Spitzer administration was concentrating on training staff in how to run procurement programs for minority- and women-owned business enterprises, known as MWBEs.

More than 300 staffers across various state agencies have participated in MWBE training programs this year, the spokesman said. He also said the administration was trying to revive MWBE programs that had withered under former Gov. George Pataki, when 75 percent of MWBE procurement staff was cut.

Paterson made MWBE procurement a signature issue during the gubernatorial campaign, and the Spitzer administration has moved to address gaps in state contracting for MWBEs. The U.S. Supreme Court has ruled that before any affirmative action programs can be put in place, states must establish that a disparity in contracting exists. Last month, the state chose global research firm NERA Economic Consulting to investigate gaps in contracting across different sectors and regions of the state. The results, which will form the basis for any MWBE targets state agencies set, are due in April.

Even without a formal disparity study, there’s evidence that the state has room to improve.

A recent report found that the Port Authority, the Thruway Authority and the Energy Research and Development Authority spent almost $9.6 million on outside legal counsel in 2006, without any of the money going to MWBE firms. The report, by the
National Association of Minority and Women Owned Law Firms, spurred some agencies to send staff to the group’s annual meeting to learn how to address the problem.

Assemblyman William Scarborough, a Queens Democrat, said the report showed that MWBE initiatives had been “gutted.”

“A lot of it is simply the fact that these law firms had found the doors shut in their faces with such regularity and over such a period of time that they had no longer bothered to apply,” he said. Scarborough has pledged to file legislation intended to close the gap.

Officials say the state has taken other steps to increase contract opportunities for MWBEs. The Empire State Development Corporation, the state’s leading economic development agency, awarded 27.5 percent of contract dollars in the third quarter of 2007 to MWBE firms – a portion worth $5.4 million, according to spokesman A.J. Carter. That’s up from less than 7 percent in 2005-06.

“Since taking office this year, we have worked hard to improve our MWBE division, starting with the appointment of a new director, Michael Jones-Bey, and a commitment to increase staff,” Carter wrote in an e-mail. The agency has expanded its staff devoted to MWBE programs from nine to 16 – still down from a high of 35 during Gov. Mario Cuomo’s administration, according to state officials.

And despite the tardy reports, the committees set up by Spitzer’s executive order have each convened twice and are scheduled to meet again Dec. 13. A third committee, devoted exclusively to construction contracting, also has been formed.

For Assemblyman Richard Brodsky, a Westchester Democrat and chairman of the Assembly’s committee on corporations, authorities and commissions, the efforts sound good but have not shown results. “There’s been no major functional improvement,” Brodsky says. “There’s been an improvement in attitude and in intent, and that should yield functional improvement, but it hasn’t yet.”

– John Tozzi