New York State’s Empire State DevelopmentConducting MWBE Disparity Study

By: Earl Hall, Executive Director, Syracuse Builders Exchange

New York State’s Empire State Development (ESD) is conducting a Disparity Study (study) to determine whether there is disparity between the use of minority and women-owned businesses (MWBE) and the availability of those firms throughout upstate New York (state).  Through the collection of qualit ative or anecdotal data, the Study seeks to determine if there is evidence of discrimination in the various geographic regions of upstate New York in which the State is the construction project owner.

In addition, the Study will look to determine the effects of race, ethnicity, and gender on businesses’ ability to do business with the State, acquire capital or bonding and win contracts or subcontracts in the markets in which the State does business. The Study will determine if there are barriers preventing diverse businesses from working with the State or the State’s prime vendors and identify how processes could be more accessible and inclusive for all businesses.

ESD conducted a similar Study in 2015, which was released in 2016. ESD’s 2015 Request for Proposal stated in part that its purpose was, “increasing participation of MWBEs on State’s contracts” among others, although the Study did not identify any New York State procurement discrimination during the 5-year period examined. Consistent with the 2015 RFP, some construction industry leaders concluded the Study assumed discrimination, and did not attempt to evaluate whether:

• Discrimination connected with any specific contract/subcontractor award had occurred;

• The actions of any agency, state employee or contractor were discriminatory;

• Lenders, sureties or insurers engaged in discrimination.

The 2016 Study concluded that a disparity in fact existed throughout upstate New York, which may lead one to conclude that the State had been discriminatory in their contract awards on public projects. The Study also concluded that 53.05% of available prime construction contractors, and 53.48% of available subcontractors, were certified MWBE employers. As a result, the State subsequently adopted a 30% MWBE goal on public work projects throughout upstate New York.

Today, ESD is conducting another Study for the construction industry. During my September 2023 interview with Brian Ansari & Associates, Inc., regarding ESD’s new Study, I challenged the interviewer to consider the questionable outcomes of the 2016 Study and those factors used by the 2015 vendor to reach those conclusions.

Additionally, I shared with the interviewer my opinion on the uniform 30% MWBE goals throughout upstate New York, as such a disparity throughout the region is not possible. While one may argue a 30% disparity exists in Monroe County and/or Onondaga County, the same disparity percentage may not exist in Lewis County or St. Lawrence County. To determine whether a disparity exists, such needs to be studied individually by region for the reason above.

MWBE capacity varies by region, and while the Syracuse Builders Exchange continues our efforts to build MWBE capacity in the central New York region via our Construction Company Growth Accelerator program, MWBE Showcase, and new mentorship program, there still remains challenges with the availability of certified contractors to bid and self-perform on public work projects.

Discrimination of any form has no place in society and is strongly opposed by industry leaders and others engaged in the construction industry. Fair, ethical, responsible and competitive bidding on private and public projects is vital to upholding the integrity of the bidding process and the contract awards thereof.

Upstate New York construction industry associations, industry leaders, contractors and elected officials should work collaboratively to address any disparities that may exist in particular regions of New York and develop solutions to address such disparities. Simply applying a uniform percentage for public projects is doing a disservice to all legitimate contractors.

I am excited to see the results of the 2023 Study and remain hopeful the disparities identified in the 2016 Study have decreased significantly or have been eliminated. While I am not optimistic elected officials will see the benefits of performing individual disparity studies in regions of New York, I remain optimistic that efforts to eliminate disparities in all industries will continue until such time none exist.