1 CITY COUNCIL CITY OF NEW YORK ------------------------ X TRANSCRIPT OF THE MINUTES Of the COMMITTEE ON CONTRACTS JOINTLY WITH COMMITTEE ON SMALL BUSINESS AND THE COMMITTEE ON WOMEN'S ISSUES ------------------------ X December 14, 2015 Start: 1:15 p.m. Recess: 5:08 p.m. HELD AT: Council Chambers - City Hall B E F O R E: HELEN K. ROSENTHAL Chairperson ROBERT E. CORNEGY, JR. Chairperson LAURIE A. CUMBO Chairperson COUNCIL MEMBERS: Peter A. Koo Ruben Wills Costa G. Constantinides Chaim M. Deutsch Corey D. Johnson I. Daneek Miller Inez E. Dickens Mathieu Eugene Peter A. Koo Karen Koslowitz Carlos Menchaca Paul A. Vallone Eric A. Ulrich Darlene Mealy Elizabeth S. Crowley Ben Kallos World Wide Dictation 545 Saw Mill River Road – Suite 2C, Ardsley, NY 10502 Phone: 914-964-8500 * 800-442-5993 * Fax: 914-964-8470 www.WorldWideDictation.com 2 A P P E A R A N C E S (CONTINUED) Maya Wiley, General Counsel MWBE Program Director NYC Mayor's Office Lisette Camilo, Director Mayor's Office of Contract Services, MOCS City Chief Procurement Officer Greg Bishop, Commissioner NYC Department of Small Business Services Kerri Jew, Deputy Commissioner Department of Small Business Services Rodneyse Bichotte New York State Assembly Member James Sanders, Jr. New York State Senator Carra Wallace, Chief Diversity Officer New York City Comptroller Scott Stringer Wendy Garcia, Deputy Chief Diversity Officer New York City Comptroller Scott Stringer Bertha Lewis, President Black Institute Reginald Sweeney Small Business Owner Quenia Abreu, President New York Women's Chamber of Commerce 3 Veronica Harris, Director of Community Affairs Brooklyn Chamber of Commerce Staff Liaison, MWBE Committee and Services Appearing for Carlo A. Scissura, President & CEO Brooklyn Chamber of Commerce Alma Nugent Reiner Owner and Operator, SMR Floors Frank Garcia, Chairman New York Statewide Coalition of Hispanic Chambers Luiz Arroyo, Engineer Sir James L. Robinson, Engineer Eric McFadden, Melvient (sp?) Simone Surrell Peele, CEO New World Contracting Company Thomas Lopez Pierre Affordable Housing Professional, Upper Manhattan 4 COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 5 2 [sound check, pause, background comments] 3 SERGEANT-AT-ARMS: Quiet, please. 4 d CHAIRPERSON ROSENTHAL: [gavel] Really. 5 Good afternoon. I'm Helen Rosenthal, Chair of the 6 Committee on Contracts, and I'm delighted to be 7 joined today by my colleagues, Robert Cornegy, Chair 8 of the Committee on Small Business and Laurie Cumbo, 9 Chair of the Committee on Women's issues for this 10 joint hearing today. I'd like to introduce the other 11 members of the Council who have joined us this 12 afternoon, Co-Chair of the Women's Committee, yeah, 13 Elizabeth Crowley, Council Member Koo, Council Member 14 Ulrich and Council Member Mealy, the second Co-Chair 15 of the Women's Committee and, of course, City 16 Councilwoman Karen Koslowitz. It's a pleasure to see 17 you here. Thank you for joining us. We're here 18 today to discuss the city's progress in achieving its 19 aspirational procurement goals for Minority and 20 Women-Owned Business Enterprises, MWBEs. We'll hear 21 testimony from the Administration, from members of 22 the business community, MWBE advocates and workers on 23 how we can work collaboratively to achieve these 24 goals. Increasing the amount of city contracts 25 awarded to MWBEs, is a key component MWBE to ensuring COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 6 2 economic equality and strength for New York City. 3 This is why it has always been, and will continue to 4 be a priority for this Council and the Committee on 5 Contracts. In 2005, the City conducted a Disparity 6 Study. It's a very confusing title--and I think in 7 the next one we should come up with a better name, 8 but a Disparity Study nonetheless--to examine the 9 availability of MWBEs that were in a position to bid 10 on and win city contracts. Using the number of 11 identified available bidders, they established 12 aspirational goals set in Local Law 129 for the 13 percent of contracts that could be awarded to MWBEs. 14 Prior to that point, only 700 businesses were 15 certified as MWBE by the city, but by 2012 the 16 Department of Small Businesses certified more than 17 3,500 MWBEs. With the hope of strengthening the MWBE 18 program, the City conducted a second disparity study 19 to refresh the availability of MWBEs, and the results 20 of that study were codified in Local Law 1 of 2013. 21 Local Law 1 made a number of significant changes 22 based on MWBE availability most importantly by 23 applying MWBE program goal to all construction and 24 professional services city contracts where previously 25 it was limited to contracts that were under a million COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 7 2 dollars. So we went from contracts that were under a 3 million dollars to all contracts. And by lowering 4 the dollar value of goods and standardized services 5 city contracts to those under $100,000, previously it 6 has included contracts under million. So you see 7 where the disparities--the power of the disparity 8 study, which is able to identify the businesses that 9 are out there that have the capacity to bid on the 10 contracts. To measure the success of expanding the 11 pool in which MWBEs could apply, Local Law 1 also 12 required the Mayor's Office of Contract Services, 13 MOCS, to report MWBE progress on a quarterly basis 14 and improved and increased both education and 15 accountability of the businesses and agencies subject 16 to the City's MWBE program. Local Law 1 was 17 implemented on July 1, 2013, and we here today to 18 hearing from the Administration about whether 19 broadening and refining the opportunities for MWBEs 20 helped increase the number and percent of MWBEs 21 winning contracts with the city. According to the 22 most recent Procurement Indicator Report issued by 23 MOCS, there's been some progress. In addition, the 24 small--the Department of Small Business Services now 25 registered more than 4,100 MWBEs in Fiscal Year 15 up COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 8 2 15% from 2013. The overall percent of city contracts 3 awarded to MWBEs is up to 7%. I don't think that's 4 enough. We all know that there are MWBEs out there 5 who could benefit from certification, and we will 6 learn more in 2006--later in 2016 when the results of 7 this City's Third Disparity Study is completed. I 8 have heard numerous concerns regarding the city's 9 challenges in meeting its participation goals, as 10 well as barrier's MWBEs face when they try to compete 11 in the city contracting process. We're here today to 12 discuss those concerns, and to explore suggestions 13 for ensuring that businesses owned by minorities and 14 women have equal opportunities to compete for city 15 contracts. Additionally, we will discussing the 16 Administration's progress and initiatives announced 17 recently regarding MWBE procurement. I'd like to 18 thank the advocates and the thousands of Minority and 19 Women-Owned Business owners who provide essential 20 services and goods to the city and bring money back 21 into the local economy. I look forward to hearing 22 your testimony today. We'll also discuss a package 23 of MWBE related bills. My colleagues will highlight 24 the bills they sponsored. 25 COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 9 2 I would like to briefly describe the 3 bills I've sponsored that will be discussed today. 4 Intro Nos. 109 and 1--1019 and 1020 will make 5 technical updates to the MOCS reporting requirements 6 related to MWBE participation. Proposed Intro No. 7 1021-A would require prime contractors who are 8 awarded contracts in excess of $10 million to pay for 9 an independent MWBE consultant to oversee their 10 efforts. And finally, Resolution 923 would adopt the 11 Procurement Policy Board's rule to raise the micro 12 purchase limit for procurement and award construction 13 contracts up to $35,000. 14 Next, Council Member Cornegy, Chair of 15 the Committee on Small Businesses and Council Member 16 Cumbo, Chair of the Committee on Women's Issues will 17 give their opening statements followed by statements 18 from Public Advocate James, the prime sponsor of 19 Intro 976 and Council Member Crowley, the prime 20 sponsor of Intro 1005. Thank you all for being here 21 today. I look forward to a meaningful hearing. 22 CHAIRPERSON CORNEGY: Thank you, Madam 23 Chair. Good afternoon, everyone. Thank you Council 24 Member Rosenthal for convening this joint hearing and 25 Council Member Cumbo for the participation of the COMMITTEE ON CONTRACTS JOINTLY WITH THE COMMITTEE ON SMALL BUSINESS AND THE 1 COMMITTEE ON WOMEN'S ISSUES 10 2 Committee on Women's issues. My name is Robert 3 Cornegy, and I'm the Chair of the Committee on Small 4 Business. Today, we--we meet testimony on the City's 5 Minority and Women-Owned Business Minority and Women- 6 Owned Business Enterprise Certification and 7 Procurement Programs, and a package of related 8 legislation designed to improve the effectiveness of 9 this program.