NERA Releases Recommendations for Improving New York State’s Minority- and Women-Owned Business Enterprise Program

13 May 2010

New York -- Minority- and women-owned business enterprises (M/WBEs) in New York State continue to experience statistically significant disparities in their access to private and public sector contracting and procurement opportunities, according to a study released by NERA Economic Consulting.

The New York State Department of Economic Development commissioned NERA to conduct a statewide disparity study under Executive Law § 312-a regarding the participation of minority and women-owned business enterprises in state contracts. NERA's report examined the past and current status of minority-owned and women-owned business enterprises (M/WBEs) in the geographic and product markets for contracting and procurement in the state of New York.

In the NERA report, "The State of Minority- and Woman-Owned Business Enterprise: Evidence from New York," co-authors NERA Vice President Dr. Jon Wainwright and longtime NERA collaborator Colette Holt, JD, of Colette Holt & Associates, found that M/WBEs have substantially lower business formation rates and business owner earnings; are more likely to be denied credit even with comparable balance sheets; and during the period of the study, found that M/WBE firms were generally utilized at far lower rates than their availability. Furthermore, the authors of the study determined that the statistical evidence supports the conclusion that these outcomes are consistent with discrimination in New York’s contracting and procurement markets.

In response to the NERA study's findings of discrimination in the use of M/WBEs in New York's markets, NERA authors issued an accompanying report including recommendations to improve M/WBEs access to state contracts. The authors' recommendations include:

  • Increase vendor communication and outreach to address complaints from M/WBE firms of the difficulty in accessing information about State contracting situations;
  • Increase contract "unbundling;"
  • Review surety bonding and insurance requirements, to ensure that coverage levels are no greater than necessary for the contract;
  • If permitted by law, NY State should consider adopting a New York Small Business Target Market program for small NY-based firms seeking work as prime contractors or consultants;
  • Expand the Capital Access Pilot Program, by providing loans to M/WBEs at favorable interest rates, using their State contracts as collateral; and
  • Improve contracting and procurement data collection and retention procedures.

NERA's disparity study and recommendations for New York State's M/WBE program can be accessed here: http://www.esd.ny.gov/MWBE.html.

About NERA

NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 25 offices across North America, Europe, and Asia Pacific.