TESTIMONY
Magalie D. Austin, Executive Deputy Commissioner of the NYC Department of Design and Construction (DDC), Outlines DDC's MWBE Program and Challenges
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10 min
Magalie D. Austin, Executive Deputy Commissioner of the NYC Department of Design and Construction, discusses the department's MWBE program, including its strategies, successes, and challenges. Austin outlines the DDC's efforts to increase MWBE participation through alternative project delivery methods, legislative reforms, and public outreach. Despite successes, Austin highlights the struggle to expand MWBE participation in infrastructure projects due to market and regulatory barriers, while emphasizing DDC's leading role in MWBE contract awards.
Speaker 4
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Good morning.
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Chair Brooks Powers, chair 1, council members, I'm Magalie D Austin, Executive Deputy Commissioner of the New York City Department of Design And Construction, and I'm very pleased to appear before your committees today to discuss DDC's MWA program.
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I currently oversee the office of Diversity And Industry Relations, which manage is our MWE program.
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Previously, I served as senior advisor to the mayor and director of the mayor's office of MWE's.
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With me this morning is deputy commissioner Tom Wen, who leads our infrastructure division.
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I'm proud to report that CDC remains one of the city's leading agencies for contract awards to MWE's.
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We've had many successes in practices that are now shared citywide.
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And we anticipate substantial improvement in the future as we continue to move toward alternate forms of capital project delivery outside of the traditional lowest bidder contracting system.
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Which give us greater flexibility.
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We also still struggle with some aspects of the program where we would like to see improvements.
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This is in part because of the laws that we would like to change in Albany, but it's also a function the construction market and the availability of subcontracting opportunities and capacity challenges on DDC's infrastructure projects.
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DTC structures its procurements to take advantage of new tools authorized by New York State to create additional opportunities for MWBEs.
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I want to note that we've also been very creative in our efforts.
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In fiscal year 21, our utilization rate on projects subject to local 1, which requires us to report annually on MWB contract awards, was nearly 26%.
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With 350 total contract valued at $660,000,000 awarded to the city's MWA's.
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In fiscal year 22, utilization rate on projects subject to local law 1 was 19% with contracts valued at $515,000,000 to MWA.
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Though this was the first time in over 5 years that DDC's utilization was below 20%.
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This was due to an especially large contract drag valued at over $1,200,000,000 for highly specialized sewer, water main and flood protection work.
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In the latest annual MWBE program compliance report for fiscal year 23, as well as the most recent PMMR, DTC achieved 25 percent MWE utilization with approximately $370,000,000 in contract awards to MWE's.
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Note that for our alternate delivery program, including design build, we have exceeded our goals on both programs to date.
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And we would like we would be happy to discuss this good news with you further.
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We've we have an extensive public outreach program.
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And since 25th team, the office of Diversity And Industry Relations has engaged more than 94100 MWBEs through internal and external workshops in MNRs led by DDC staff.
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Earlier this month, for example, in conjunction with Queen's Bureau President and Donovan Richards, CDC hosted its 2nd construction career and training resource fair at Queensboro Hall.
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And CDC's ports MWEs, not just in the construction industry, but also in design, engineering, and construction management.
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Currently, half of the 20 firms that provide architectural design services for the city's next generation of public buildings or certified MWEs.
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40% of the 15 firms providing construction management services are MWE's.
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And most notably 68% of the 31 firms providing resident engineering inspection services, which encompasses day to day over site of our infrastructure work, and 4 of the 5 firms providing special inspections are MWA's.
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Much of the city's and the CDC's MWA program is regulated by the state, and we've devoted significant time and resources to lobbying for changes that would enable us to enhance our program.
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Those efforts have been coordinated with the mayor's capital process reform task force and our sister city agent in 2023 as part of the city's collective effort, DDC helped to secure legislation in Albany to allow for comprehensive wraparound insurance.
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We also help to raise MWE discretionary threshold to 1,500,000 as Chief Garner mentioned.
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We also realized significant success in establishing our own MWA only prequalified list for our general construction procurements between $500,003,000.
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And our mentoring program for MWDEs in small construction firms, which required legislation to establish was so successful that it has now been taken over by city hall to expand to other agencies.
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Prior to that, in 2020, 3, we awarded our first contract under the mentoring program and also accepted 29 new firms to add to the old already approved 49 firms.
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As I mentioned earlier, we have already demonstrated that alternative methods of project delivery outside of the traditional lowest bidder contracting system greatly increase opportunities for MWBEs.
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And that's because alternative delivery in its various forms allows for greater flexibility, and we can include the proposed MWE utilization plan as a formal factor or score in the evaluation process and selection of our alternative delivery teams.
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For years, culminating in the introduction of our strategic blueprint in January of 2019, DDC has been in age in an extensive process to implement capital process reform.
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And we have had substantial success in Albany gaining permission to use design build.
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Our very first design build project is a combined parking garage and community space in cue gardens.
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Completed as part of the Burrow based jails program.
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Not only did we build it in less than half the time we could, had we used the lowest bidder contracting, but MWA participation exceeded 37% for their design phase and 44% for traction.
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Again, that's because design build does not base everything on the lowest bid price, and that inevitably leads to a higher level of MWA participation.
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We said MWA goes up 30% for both the design portion and the construction portion of our design build contracts.
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And acknowledging that there is much work to do in ensuring that black and Hispanic WBEs have equal access to contracting opportunities in the program.
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We have disaggregated those goals further with individual 10% targets for both black and Hispanic vendors.
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We continue to advocate for other methods of alternative delivery which will also increase opportunities for MWBEs.
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1 of those is called Centimeters Build.
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CDC successfully used Centimeters Bill during the pandemic, for example, and built 3 large clinics for the city's public hospital system.
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Valued at $117,000,000 with 46 percent MWBE utilization.
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Another is progressive design build, which will be particularly helpful with our infrastructure projects and ultimately making DDC an authority.
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While we've been substantial progress in our public buildings division and the alternative delivery program, what of the greatest challenges for our MWBE program remains our extensive portfolio of infrastructure projects.
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The barriers for entry for smaller firms and the manner which the work in a typical project is divided.
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Even in New York City, the number of firms capable of competing for competing for our large infrastructure projects, similar to the tech work we do every day in the 2 point $5,000,000,000 Southeast Queen's initiative that we're completing with DP And DOT is limited.
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We see the same group of firms over and over and few of them are MWA's.
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This is not likely to change soon as the barrier for entry into the market to complete these types of contracts is very high, requiring large investments in machinery and materials.
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Another element we are bringing to our design build contract is aiming to hire local MWE's.
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For example, in July, we held a construction career in MWE Expo for the Brownsville Girls Empowerment Center and community help that DDC's building at 444 Thomas Boylan Street in Brooklyn.
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On March 13th, we're hosting our next quarterly information system in job fair for Eastside coastal resiliency, focused on how local residents can get into the relevant unions.
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We further held the Rockaway MWBE vendor event on December 14th, and we'll be replicating events like this across the city.
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So in closing, I would reiterate that CDC is one of the leading agencies for contract awards to MWBEs, and we are actively trying to improve on that performance both through legislative actions in Albany.
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And through innovative contracting and hiring strategies in the city.
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And as we improve capital project delivery for the city, we anticipate we will also expand opportunities for MWBE Firms.
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And thank you, and we would be happy to answer any questions at the moment.