Could Black Entrepreneurs Lose Their Share of $20 Billion?

A group of politicians and government officials have urged minority entrepreneurs to support a New York State law or miss out on their share of more than $20 billion in contracts. Without their full support, however, some fear growing resistance that will delay or alter the landmark measure seeking to ensure procurement opportunities for minority- and women-owned business enterprises. Signed by Gov. David Paterson, the state’s first black chief executive, earlier this year, minority business advocates say the New York State Business Diversity Act could serve as a model for similar MWBE initiatives nationwide.

According to New York State Senator Ruth Hassell-Thompson, state officials “have not received one letter of support ” but 800 opposition letters since the law entered the mandatory 45-day public comment period that began on Sept. 29 and ends on Nov. 12. Says Clem Harris, special assistant to the governor, of the law expected to go into effect on Dec. 8: “Substantive criticism could force the state to review commentary and change the date of adoption.”

The act, a package of four bills, provides for, among other provisions, expansion of contracting practices of public authorities; establishment of a chief diversity officer to monitor and enforce the MWBE procurement process; raising the discretionary purchasing cap on awards to MWBEs from $100,000 to $200,000; and a mandate for executive agencies to invest with minority financial institutions. The legislation was initiated after the governor’s MWBE task force reported it findings last May from a comprehensive disparity study. Paul Williams, task force chair and president of the Dormitory Authority of the State of New York (DASNY), an agency that oversees a portfolio of construction projects worth $6.8 billion, says, “We wanted to ensure MWBEs received their fair share. We found they were capable of handling 30% of $70 billion in state procurement.”

Tepid response from the minority business community was part of the focus of last week’s DASNY MWBE conference, which attracted close to 1,000 attendees, including African American contractors and CEOs of BE 100s financial services firms. During the session on business diversity policies, Rep. Yvette Clarke (D-NY), the only African American on the House Small Business Committee, urged entrepreneurs to vigorously back the act because it “can be repealed in a blink of an eye.”