Minority And Women Owned Businesses Get A Boost In New York
Adoption of Task Force Recommendations Leads to ‘New Era’ for MWBE Firms in New York, Governor to Propose Legislation to Codify Recommendations Tied to Progress.
Governor David A. Paterson today accepted the final report from the Minority and Women-Owned Business Enterprise (MWBE) Task Force, the capstone of the State’s evaluation of its use of MWBEs. The Task Force began its work at the direction of the Governor in June 2008 to review how authorities issuing State-supported debt selected underwriters and other professional services. Following a thorough examination of State procurement processes, the Task Force delivered a series of recommendations designed to provide MWBEs with an opportunity to compete for contracts. The final report outlines how the adoption of these recommendations have led to significant improvement in the utilization of MWBEs, setting a foundation for future progress and making New York a national leader in MWBE economic development.
“In 2006, the Department of Economic Development reported some very alarming numbers. Only 3 percent of all State procurement contracts were awarded to businesses owned by women or minorities: 2 percent of those were minority-owned, including African-American, Hispanic and Asian; and a mere 1 percent belonged to women. It was with these figures in mind that one of my first acts as Governor was to create a task force to address this inequity,” Governor Paterson said. “Today, we see the results. These recommendations have developed a uniform procurement process, removed barriers to entry and improved the diversity of debt underwriters and other professional service firms working with New York State.”
“There is more progress to be made, but this Task Force has laid a strong foundation. To help ensure that the work of this Task Force is not diminished with the passage of time, I will soon submit legislation to ensure that the progress that began with the Task Force continues,” the Governor added. “I congratulate the MWBE Task Force and Chairman Paul Williams. Their impressive results will continue to be used as a guide for diverse economic development in New York and across the country.”
Task Force Chairman Paul T. Williams Jr., the Executive Director of the Dormitory Authority, said: “MWBE firms have new opportunities to do business with and in New York State – progress we would not have made without Governor Paterson’s commitment to this issue. As more MWBE financial and professional service firms earn senior roles as underwriters, attorneys, bankers, brokers, agents and advisors, these firms will be able to expand their capital and customer base. That will create new jobs here in New York and help develop the next generation of minorities and women in the financial services profession. I look forward to working with the Governor and the MWBE team to ensure that a new and vibrant MWBE financial sector continues to grow in New York.”
The MWBE Task Force developed recommendations to increase the State’s use of MWBE underwriters, legal, financial and other professional service providers:
Underwriter Recommendations
The Task Force made 30 underwriter recommendations in October 2008. Chief among those adopted is the uniform Request for Proposal (RFP), which removes barriers to entry, reduces RFP cycles for all underwriting firms, and standardizes measures. This includes a mid-cycle performance review of each authority’s underwriting panels. Based on those reviews, firms have the ability to advance to more senior levels in the underwriting panels. Authorities have also used various syndicate structures to reach an aspirational goal of 20 percent MWBE participation.
Legal Services Recommendations
The Task Force Recommendations Regarding Best Practices in Procurement for Legal Services, adopted in May 2009, cover bond counsel and other legal services provided to the Task Force members. Recommendations include the elimination of barriers to entry for MWBE firms, outreach to organizations that serve MWBE firms, shorter RFP cycles, encouraging joint ventures and partnering arrangements, and requiring all firms to disclose their diversity practices. As a result of these recommendations:
- In 2009, the Thruway Authority selected five law firms to serve as special bond counsel. Among the empanelled firms was a joint venture, which was comprised of an MWBE and a non-MWBE law firm.
- In 2009, the Dormitory Authority of the State of New York (DASNY) had six voluntary collaborations between MWBE and non-MWBE law firms. The MWBE and non-MWBE law firms worked as co-underwriter’s counsel on DASNY transactions.
Financial Services Recommendations
The Task Force Recommendations Regarding Best Practices in Financial Services, adopted in November 2009, focus on increasing MWBE participation in accounting, banking, broker-dealers, certificates of deposit and money market fund investments, financial advisory and swap advisory services, risk management, and insurance brokerage services. The recommendations are centered on outreach to MWBE firms, the RFP process and evaluation criteria, establishment of aspirational goals, encouragement of joint ventures and partnership arrangements, consideration of the diversity practices of firms which hire minority and women financial professionals and the periodic evaluation of firms selected.
As a result of these recommendations, authorities have already begun procurements based on the principles adopted.
MWBE accounting firms, financial and swap advisors, and broker-dealers are now experiencing new opportunities to participate in authority financial services procurements. Examples include:
- In 2009, DASNY awarded its annual audit services to KPMG, which is partnering with TCBA Watson Rice, an MWBE firm. It is estimated that TCBA Watson Rice will be allocated 25 percent of the total audit hours.
- Empire State Development (ESD) is working with three MWBE broker-dealer firms and the Thruway Authority is working with five MWBE broker-dealer firms, executing substantial trades with the firms.
- ESD issued an RFP for financial and swap advisors in 2009, and has empanelled a joint venture of a majority and MWBE firm, and a joint venture of two MWBE firms and one majority firm.
- In 2010, RFPs will be issued by DASNY for financial and swap advisors and banking services; Environmental Facilities Corporation (EFC) will issue an RFP for accounting purposes; and HFA will issue an RFP for banking depository services. All three organizations will conduct their RFPs adhering to the recommendations of the Financial Services Best Practices.
To ensure that this progress continues, Governor Paterson will submit legislation that would mandate that the State’s procurements conform to the Best Practices recommended by the MWBE Task Force.
The legislation would:
- Require authorities to establish appropriate goals for participation by MWBEs in procurement contracts awarded by authorities and for the utilization of MWBEs as subcontractors and suppliers by entities having procurement contracts with authorities;
- Require that the evaluation criteria for awarding any procurement contract (other than contracts required by law to be awarded to the lowest responsible bidder pursuant to sealed bids) include an assessment of the proposer’s diversity practices;
- Require the director of the Division of Minority and Women Owned Business Development (DMWBD) to publish regulations requiring all State agencies to assess the diversity practices of contractors submitting bids or proposals in connection with the award of a State contract;
- Require enhanced reporting by State entities regarding their compliance with the procurement provisions and an annual report by DMWBD assessing the effectiveness of each state entity’s MWBE program; and
- Enhance penalties for contractors that willfully or intentionally disregard their responsibilities to utilize MWBE firms.
The Governor created the MWBE Task Force through Executive Order No. 10. It includes representatives from DASNY, ESD, EFC, the Housing Finance Agency (HFA), the Thruway Authority and members appointed by the Governor including a representative of the Office of State Comptroller and the Governor’s Office. Paul T. Williams Jr., the Executive Director of the Dormitory Authority, has served as the Task Force Chairman.
Click here for a full copy of the report: http://www.dasny.org/finance/mwbe_taskforce/E_O_10_report/index.php
Topics: 2010, accounting firms, African American, Asian, broker dealers, business, competition, contracts, DASNY, debt underwriters, economic development, Economy, Empire State Development, equality, ESD, Executive Order No. 10, final report, financial, Financial Services Recommendations, Governance, government, Governor David A. Paterson, HFA, Hispanic, Housing Finance Agency, immigration, inequality, Legal Services Recommendations, minorities, minority, Minority and Women Owned Business Enterprise Task Force, monitor, MWBE, New York, news, opportunity, procurement, professional services, progress, Request-For-Proposal, RFP, state procurement process, swap advisors, task force, U.S., underwriters, United States, Women
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