SCHENECTADY — The city is poised to adopt a policy the city’s affirmative action officer believes will be a major boost for minority- and women-owned businesses competing for city contracts.
Under current policy, contractors without certification from the state’s apprenticeship program can only bid on projects up to $200,000, according to the city Corporation Counsel’s Office.
Lawmakers increased the cap to $350,000 on Monday, a number that will rise to $500,000 in 2021 if the measure is formally adopted by the City Council next week.
“This is a huge deal,” said city Affirmative Action Officer Ron Gardner. “This is the most comprehensive look at this MWBE [Minority and Women Owned Business Enterprises] program in the city’s history.”
Gardner has been working on the changes for the past 18 months in an effort to help small businesses, many of which operate in the city’s most distressed neighborhoods.
Obtaining certification can be daunting for smaller businesses with limited resources, Gardner said.
As a result, they can be boxed out of landing lucrative contracts.
Sixty-eight percent of the city’s bid awards were above $500,000 in 2019, with 48 percent coming in over $1 million.
And 24 percent were between $100,000 and $350,000, with 8 percent coming in between $350,000 and $500,000, according to the city’s Purchasing Department.
Ultimately, Gardner envisions more contracts will lead to stronger businesses providing higher wages to local employees, perhaps even spurring home ownership in the long run.
Lawmakers hotly debated the issue on Monday and struck a compromise deal on the two-year phase-in.
Skeptics, including City Council President John Mootooveren, wanted to cap the amount at $250,000 and revisit the issue at an unspecified future date.
“We can all revisit in the near future,” he said.
City Councilwoman Leesa Perazzo pushed for a more aggressive approach, increasing the number to $500,000 immediately.
“For years, we have heard from local small businesses that they want a seat at the table,” Perazzo said after the meeting. “This provision will allow that to happen.”
Councilwoman Marion Porterfield also supports the reforms.
“We say we want to support our department heads, and this is a way to do that,” she said.
Others urged for more caution, wondering about the ability of untested and relatively inexperienced contractors to take on large-scale projects and execute them successfully.
“I’m just concerned we’re not putting too much on the table and can’t get it accomplished,” Councilwoman Karen Zalewski-Wildzunas said.
Gardner acknowledged their concerns and said the change will come with protocols and vetting.
Contractors will be required to submit “utilization plans” with their bids outlining how they will fulfill and meet the contracts once awarded, he said.
“Putting teeth in the legislation is a game changer,” Gardner said on Tuesday. “Never before have [applicants] had to submit plans for their goals up front as part of the evaluation process.”
Prospective bidders will be subjected to the city’s existing vetting process, which includes a review of their resources and capacity to complete projects.
While the measure passed out of committee, it still needs to be approved by the full City Council on Monday.
Gardner acknowledged some larger contractors may grumble over increased competition.
“You’re not diluting anything,” he said. “You’re simply opening up an opportunity for firms to compete.”
If approved, Gardner’s office will provide extensive training and workshops for those seeking to take advantage of the new opportunities.
“We’ll be doing a robust outreach campaign to discuss resources they’re going to need,” he said.
Gardner acknowledges the education component will pose a challenge.
“They must come correct, prepared and ready to do this work,” he said.
And he said he will continue to stress the importance of obtaining state certification, citing the benefits, including broadened access to capital.
Mayor Gary McCarthy said he supported Gardner’s proposals and was “optimistic” they would spur economic activity.
“We want to work together to continue the growth happening in this community,” McCarthy said on Tuesday.
Clutchie Rammadh, owner of BKJ Construction, said boosting the threshold will be beneficial to his Corlear Avenue-based business, which employs six (but varies depending on the project).
“If we can increase that, it’s going to be good,” said Rammadh, who said he was “100 percent” supportive of Gardner’s efforts.
“He’s good people,” Rammadh said.
The state has also prioritized the utilization of MWBE firms and has set a target of using MWBE firms for 30 percent of state contracting by 2021.
That number is now 29.13 percent, the highest rate in the nation, according to the governor’s office.