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QUESTION
Council Member Brooks Powers Delves into MWBE Disparities and Access to Capital
1:53:02
ยท
6 min
Council Member Brooks Powers and Michael Garner, Chief Business Diversity Officer from the Mayor's Office, discuss persistent disparities affecting MWBE utilization in city contracts. The conversation covers access to capital, surety bonding, and the necessity of debundling projects to empower MWBEs as prime contractors. Garner details current city efforts, including introducing cost-effective construction insurance and surety bonding programs, as well as the potential use of letters of intent to facilitate MWBEs' access to banks for capital.
Speaker 1
1:53:02
Mister Gardner, according to the city wide despair, study, there are significant gaps in MWBE utilization on city contracts compared to availability.
1:53:12
What from your perspective and your experience explains this these continuing disparities?
Speaker 5
1:53:21
I think Maggie indicated that they were the 1st agency to assign this aggregate goals.
1:53:31
And so we are monitoring agencies now to include those disparate groups including black Hispanic and Asian women in their outreach and in their focus on awarding contracts.
1:53:46
And so once again, we are having weekly ComStat type meetings that's certainly one of the the topics on the agenda, and certainly having those weekly asylum meetings where we are action agencies, those 6 agencies that's buying services What's how many contracts were awarded last ship last week?
1:54:08
How many of those contracts were awarded to Blackysmatic And Asian businesses?
1:54:12
Wishing your pipeline.
Speaker 1
1:54:14
But what do you feel is like contributing or, like, continuing the disparities that we're seeing.
1:54:25
What are the contributing factors?
1:54:27
Because I'm I'd like to understand is to see how we better address it.
1:54:31
I hear the work that you all are doing, but what are the underlying causes?
Speaker 5
1:54:36
Well, in in in construction, there there's always gonna be access to capital, access to surety bonding, and the lack of opportunities in which these diverse firms can bid on.
1:54:47
Certainly, working as a subcontractor is a good business for some.
1:54:53
I believe that the new paradigm is debundling projects, actively going out and recruiting those black Hispanic and Asian firms equipping them with access to capital, access to surety bonding, and having them bid directly as prime contractors and consultants.
1:55:15
So they can be in control of their own destiny and not simply relying on working as a subcontractor.
Speaker 1
1:55:22
And and I agree with you and appreciate hearing that.
1:55:27
And when we talk about the access the capital and bonding in particular.
1:55:32
That's something that's been a long standing issue.
1:55:36
And even in terms of some of, like, the banking practices, in terms of whether or not they'll approve the access to capital.
1:55:43
And if they do what those rates look like, versus if a larger non minority business were to approach the same institution.
1:55:52
So what is the city doing or what does the city think that the council can do to support addressing this issue to be able to address that?
Speaker 5
1:56:02
Right.
1:56:02
So it it is my understanding.
1:56:04
Any that SBS have numerous access to capital programs and funding that they will have those banking institutions and CDFI's to award not award, but to grant access to capital to those that those companies.
1:56:24
So within the SBS sphere, there are programs for access to capital.
Speaker 1
1:56:30
Right.
1:56:31
And I'm hearing even with some of the CDFI's, which are great, and sometimes the only, like, silver lining for some of these firms don't provide enough capital.
1:56:40
So for example, while not a city project, but on city land, you have the JFK redevelopment, a multibillion dollar infrastructure program.
1:56:50
Wanting to see how we create a path or pipeline for these businesses to play in that space.
1:56:57
But then at the same time, we have you know, tons of construction projects in the pipeline through DDC and other agencies as well that require, you know, higher access to capital insurance and and what have you So is there any effort or plan for the administration to increase what is available now?
Speaker 5
1:57:28
Certainly those conversations with respect to access to capital are going on and continuing and bringing more banking institutions into the fold to issue cost cost effective access to capital.
1:57:45
I just mentioned the OSEP, the state law that we got Mhmm.
1:57:49
Got passed, owner's control and insurance programming, that's going to allow the city now to offer more cost effective construction insurance to our M and WBE firms.
1:58:01
And and certainly access to surety bonding.
1:58:06
It's one thing to talk about or training contractors to become vulnerable is a different thing in bringing a consultant in that will actually access them with surety bonding.
1:58:19
And that's where we're focusing on now under this umbrella of OSAP.
1:58:25
The cost effective insurance.
Speaker 1
1:58:27
And then in terms of the capital, is there a way, like, that the city or the prime could be acquired to give, like, a letter of intent where the business could then go to, like, a regular bank and say, I've been selected for this contract to be able to to get that access that way as well.
Speaker 5
1:58:47
Certainly, there there are letters from the agency that once are awarded a contract, a contract in hand, they can use that.
1:58:54
And on the sublevel, there's a subcontract agreement, which outlines their subcontract.
1:58:59
They can certainly use that also as well.
1:59:02
You know?
1:59:02
And I just think that we need to bridge the gap on historical barriers they entry would access to capital.
1:59:10
And there are successful programs at the SEA and at the MTA.
1:59:15
Where we were able to, in fact, do that.
1:59:17
I'm optimistic in having conversations and input from the city council and others that we can work with SBS in creating viable solutions that will eradicate the barriers barriers to entry and the lack of access to capital.
Speaker 1
1:59:34
I would love to be a part of those conversations and if there's, like, a working group around that to be a part of that also.