BILL NUMBER: S6630
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the executive law, in relation to participation by
minority group members and women with respect to certain state
contracts; and to amend the state finance law, in relation to establish-
ing a mentor-protege program for small and minority and women-owned
business concerns and in relation to performance and payment bond
requirements
 
PURPOSE:
Minority and Women-Owned Business Enterprises ("MWBEs") have come to
constitute a large percentage of businesses in New York. MWBEs, just
like small businesses, are an increasingly crucial part of the State's
economy and contribute vastly to our economy's growth. However, despite
these increases, MWBEs continue to face barriers in government contract-
ing. This bill seeks to address and eliminate some of these barriers by
enhancing Article 15-A provisions and increasing small business and MWBE
participation in state agency commodity and service procurement and
State public authority assisted, construction and rehabilitation project
contracts and subcontracts.
 
SUMMARY OF PROVISIONS:
Creates a Small Business and MWBE Mentor/Protege Program; Creates
violations against contractors failing to comply with Article 15-A;
Creates greater accountability by requiring the Division of Minority and
Women Business Development to create a master list of all state agencies
required to file quarterly compliance reports and to list in its annual
report the names of non-compliant agencies and the extent of their
noncompliance; Expands contracting opportunities to certified MWBEs by
creating a Division website where certified MWBEs can access contracting
and subcontracting opportunities; Requires contractors to provide utili-
zation plans at the time a bid is submitted; Requires the posting of
contractor MWBE utilization plans and prohibits the use of automatic
waivers; Provides for greater contracting opportunities by alleviating
the burden of performance and payment bonds for small businesses and
certified MWBEs when the aggregate amount of the contract is under
$500,000; Provides the Director with the authority to mandate an audit
of state contracting agencies that do not comply. with Article 15-A
reporting requirements and requires the contracting agency to hire and
pay for an independent auditor; Increases MWBE and small business
participation in State public authority assisted, construction and reha-
bilitation projects.
 
JUSTIFICATION:
Public purchasing is one of the government's most important functions.
Its effective use or potential abuse can have a substantial impact on
governmental efficiency, the income of particular companies and communi-
ties, and the financial burden of taxpayers. Over many years, minority-
owned and women-owned businesses have experienced difficulties in
tapping into government procurement purchasing programs. Barriers to
government contracts still exist for MWBEs because they are smaller in
size and fewer in number than majority-firms. Small businesses experi-
ence similar barriers when trying to participate in government contract-
ing.
There are over 2 million small businesses in New York State, comprising
99% of total businesses and employing over 50% of the State's workforce.
MWBEs have come to constitute a large percentage of businesses in New
York, and continue to experience growth and increased public procure-
ment. According to the census, New York has nearly 220,000 black-owned
firms (with 129,324), more than 725,000 women-owned firms, and 266,000
Hispanic-owned firms. However, as of 2014, there were roughly 10,000
certified MWBEs in New York State. The Division reported that state
agency expenditures for MWBEs statewide totaled $1.48 billion, $1.96
billion, and $1.69 billion respectively, 2012-2013, 2013-2014, and
2014-2015 State Fiscal Years. While these participation figures have
risen as high as 25%, they also reflect a reduction in the pool of total
authority and agency procurement from which these participation goals
are being calculated.
Indeed, in SFY 2013-2014, the year with the highest participation rates,
the total procurement was $7.8 billion. This contrasts with a 10.28%
2010-11 when the total procurement was $10.8 billion. If adjusted for
those larger procurement totals, the participation rate in that highest
year would be about 15.6%. Further, despite the rise in certified
MWBEs-, the number of waivers granted as a result of lack of MWBE firm
availability to meet participation goals has increased significantly
since 2011-2012, rising from 213 to 871 for SFY 20142015. Challenges
with the implementation of Article 15-A include this increase in waiver
granting and difficulties connecting MWBEs with prime contractors who
are searching for them, and continued anecdotal reports of misuse of
MWBE certification name through misunderstanding or potential deceit or
fraud.
 
LEGISLATIVE HISTORY:
2023-2024: 5.5464 - Referred to Procurement and Contracts/A.7787
Referred to Governmental Operations
2021-2022: S.4473-A - Amend and Recommit to Procurement and
Contracts/A.2321-A - Amend and Recommit to Governmental Operations
2019-2020: S.766 - Referred to Finance/A.1975 - Referred to Governmental
Operations
2017-2018: S.4448 - Referred to Finance/A.1255 - Referred to Govern-
mental Operations
2015-2016: S.1568 - Referred to Finance/A.9141 - Referred to Govern-
mental Operations
2013-2014: 5.1681 - Referred to Finance
2011-2012: 5.380 - Committee Discharged and Committed to Rules/A.301
Referred to Governmental Operations
2009-2010: S.7654 - Referred to Finance/A.4094-A - Amend and Recommit to
Governmental Operations
 
STATE AND LOCAL FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately, provided however, the amendments
to article 15-A of the executive law made by sections one, two, three,
four and five of this act shall not affect the expiration of such arti-
cle and shall be deemed repealed therewith.

Statutes affected:
S6630: 312 executive law, 312(5) executive law, 316 executive law, 139-f state finance law, 139-f(4) state finance law, 139-g state finance law