First-of-its-kind survey and analysis of more than 500 M/WBEs during pandemic reveals severe and systemic barriers to financial relief, exclusionary COVID-19 contracts and unresponsive City agencies
25 percent of surveyed M/WBEs did not apply for federal or City relief funding due to restrictive application criteria, lack of outreach and awareness, and depleted funds
Comptroller’s Office will be requiring documentation as evidence that the City is meeting its aspirational M/WBE goals
Stringer renews call for Chief Diversity Officers in City Hall and within every City agency to drive the representation of people of color and women across government
New York City Comptroller Scott M. Stringer released a comprehensive analysis outlining economic challenges facing minority and women-owned enterprises (M/WBEs) during the COVID-19 pandemic. According to a survey of more than 500 M/WBEs, 85 percent of City-certified M/WBEs report they cannot survive the next six months given their current cash on hand, and 30 percent of City-certified M/WBEs cannot survive the next thirty days or less. The Comptroller’s analysis additionally found that 60 percent of M/WBEs that competed for COVID-related City contracts were not able make contact with the City and only ten M/WBEs reported actually receiving a contract. Based on the survey findings and feedback from M/WBEs throughout the economic crisis, Comptroller Stringer announced new transparency and accountability measures in the contract registration process requiring the City to provide documentation and market analysis as evidence that the City is meeting its M/WBE goals.
“Minority and women-owned businesses are essential to our economy, generate strong local community wealth, are at the core of our city’s cultural identity and they are bearing the brunt of our economic crisis,” said New York City Comptroller Scott M. Stringer. “These findings are alarming and underscore the structural inequities facing M/WBEs and the urgent need for immediate action and relief before M/WBEs in our city are decimated. We will redouble our commitment to holding City agencies accountable and continue our efforts to identify and dismantle systemic barriers to participation. Our economy is strongest when it is equitable and inclusive, and our road to recovery must reflect those values.”
Based on survey results from more than 500 certified M/WBEs, this new analysis revealed the following findings:
M/WBEs are struggling to stay in business
- 85 percent of City-certified M/WBEs report they cannot survive the next six months given their current cash on hand.
- 30 percent of City-certified M/WBEs report they cannot survive the next 30 days.
- 80 percent of M/WBEs that shared revenue information lost a median of $38,000 during a 3-month period during COVID-19 (March – May 2020).
- 50 percent of M/WBEs ranked payroll and 40 percent ranked rent as the most challenging expenses to pay for during COVID-19.
- 35 percent of M/WBEs report they have not been able to operate during COVID-19.
M/WBEs face barriers to COVID-related contracts with the City
- 65 percent of M/WBEs that shared information about their services said they were ready and able to contract with the City on COVID-19 response efforts.
- Of the 62 MWBEs that competed for COVID-related contracts, 60 percent were not able to make contact with the City and only ten M/WBEs received a contract.
- M/WBEs surveyed received 10 COVID-related contracts for Personal Protective Equipment, Staffing, Technology, Medical supplies, Sanitation, and design/build of COVID-19 testing sites.
M/WBEs face barriers to federal, City and private COVID-19 relief funding
- Only 40 M/WBEs surveyed applied for the New York City Business Continuity Loan. Of the 40, only six were approved.
- Only 48 M/WBEs applied for the New York City Employee Retention Grant. Of the 48, only 15 were approved.
- 25 percent of surveyed M/WBEs did not apply for federal or City funding. Respondents cited many barriers to entry, including:
- Restrictive application criteria or use of funds
- High interest rates
- Lack of outreach and awareness
- Funds were exhausted before application was submitted
- 20 percent of surveyed M/WBEs applied for federal or City funding but were not approved. Respondents cited the following reasons for rejection and/or ineligibility:
- Low credit score
- Restrictive application criteria
- Still waiting approval
- Rejected and were not told why they were ineligible
- Funds were exhausted before application was processed
- 95 percent of surveyed M/WBEs did not receive private sector relief.
The Comptroller’s survey asked more than 500 M/WBEs in June 2020 how the City can level the playing field and increase access and opportunity for M/WBEs. Respondents cited:
- Increased access to prime and subcontracting opportunities by placing goals on every City contract
- Flexible grants and loans for reopening expenses such as cleaning supplies and services, PPE and testing assistance, as well as working capital
- Marketing and promotion assistance for reopening
- One-on-one support to navigate grants, loans and City contracts
- Resume City-funded construction projects
Comptroller Stringer announced new transparency and accountability measures in the contract registration process requiring the City to provide documentation, such as goal-setting worksheets and market analysis, on M/WBE goals in City contracts. In light of the City’s goal of awarding at least 30 percent of the dollar amount of City contracts to M/WBEs by 2021, these measures will provide clarity and insight into the City’s M/WBE contracting targets and help identify areas for improvement.
To read the full analysis, click here.
This week, Comptroller Stringer penned an op-ed on the need to install a Chief Diversity Officer in City Hall and within every City agency to serve as executive level diversity and inclusion strategists driving the representation of people of color and women across government. Text of the op-ed can be viewed here.
In April, Comptroller Stringer launched a biweekly series of online workshops to expand access to available resources, services, and business opportunities for small businesses and M/WBEs impacted by COVID-19. More than 1,600 M/WBEs have participated in the workshops to date.
To read the Comptroller’s “Making the Grade: New York City Agency Report Card on M/WBEs,” click here.
