NYC Proposes Increase in Discretionary Spending Limit for MWBEs

Earlier this month, New York City Mayor Bill DiBlasio announced a proposal to increase the discretionary spending limit for MWBEs in the city to $1 million for goods, services and construction. The proposal was hailed by elected officials, business entities and advocates across the state as a means of further leveling the playing field for minority and woman-owned businesses in New York.

The proposal would raise the current discretionary spending threshold of $150,000, which was increased from $20,000 for goods and services and $35,000 for construction in 2017. The higher dollar amount would eliminate the formal, time-consuming bidding process on many higher-dollar-value contracts, significantly lowering the burden on MWBEs. It would also give city agencies greater flexibility in contracting with MWBEs at higher dollar amounts.

According to a March 21 press release, the proposal could increase the value of MWBE contracts awarded by the City by $500 million a year.

In a statement accompanying the announcement, DiBlasio said:

“Our City only works best when everyone – regardless of race, gender or ethnicity – can participate in our economy. We want to take our commitment to that idea further and urge the State to give us more tools that expand economic opportunity for minority-and women-owned businesses. With the State’s help, we can continue building an economy that truly works for all New Yorkers.”

An Unprecedented Investment

The proposed legislation comes at a time when New York is already making an unprecedented investment in the success of MWBEs. Since the discretionary spending limit rose to $150,00 a little over a year ago, the City has awarded more than 840 contracts totaling over $61 million to MWBEs, almost doubling the volume of contracts in this dollar range awarded the previous year. The dollar value of the contracts more than doubled as well.

In all, New York City has awarded over $10 billion in MWBE contracts since 2015, when DiBlasio announced the OneNYC plan and proposed a goal of $16 billion in MWBE spending by 2025. Based on the program’s success, the city has since increased that spending goal to $20 million by 2025.

The new proposal expands on existing programs aimed at improving access to capital and building the capacity of MWBEs. These include the City’s $20 million investment in two revolving loan funds — the Emerging Developer Loan Fund and the Contract Financing Loan Fund — which provide low-interest loans to MWBEs. (Thanks to a $41 million investment by Bank of America, TD Bank and Union Bank in 2018, the amount of the fund increased to $60 million last year.)

More Accountability

In addition to increasing the discretionary spending limit for MWBE contracts, the proposed legislation would increase oversight by requiring a public report of MWBE contracts awarded under the new program. The city would also solicit multiple quotes from qualified MWBEs to ensure that bidding remains competitive and the taxpayers get the highest quality of work at the most affordable price.

About The Carmoon Group

The Carmoon Group Ltd. is a minority-owned insurance brokerage headquartered in Hicksville, New York. Through our large network of nationwide affiliates, we offer risk management solutions and comprehensive insurance programs for businesses in a wide range of industries. We have the expertise and experience to provide you optimal coverage at the best possible price. So why not give us a call today to set up an appointment for your insurance review? Or if you prefer, just reach out online and we’ll get back to you at a convenient time.

Leave a Reply

Your email address will not be published. Required fields are marked *