Cuomo signs bill expanding MWBE certification for N.Y. businesses, boosts contract target

ALBANY, N.Y. — Gov. Andrew Cuomo on Wednesday signed legislation designed to increase the number of certified minority- and women-owned enterprises (MWBE) in New York.

The new law is effective immediately, Cuomo’s office said in a news release.

It authorizes the state to grant a one-year provisional MWBE certification status to firms that have historically been excluded from participating in state contracts.

“Increasing the number of minority and women-owned companies that do business with the state is an important way to encourage diversity and grow opportunities for New Yorkers,” Cuomo said in release. “We have made significant progress over the past four years in supporting MWBEs, and this law is another step forward.”

Cuomo on Wednesday also announced that his administration is “dramatically increasing” its goal to 30 percent for MWBE participation in state contracts.

That 30 percent goal represents the “highest such target in the nation for any state government,” Cuomo’s office said.

Cuomo made his announcement at the start of New York’s 4th annual MWBE Forum in Albany.

Cuomo spoke as he released data indicating that New York has “far exceeded” the original 20 percent goal that the Democrat had set in his first State of the State address.

During his appearance, Cuomo unveiled new data on “record” MWBE utilization in state contracting of 25 percent in the 2013-14 fiscal year, which represents a total of nearly $2 billion in contracts.

That figure is up from the 10 percent MWBE state-contract utilization rate in during the 2010-2011 fiscal year when Cuomo took office.

A 2010 study that the state commissioned found a “significant” disparity in state-contract participation by MWBEs relative to their overall statewide availability, Cuomo’s office said.

As a result, New York implemented a new law to provide for the “maximum feasible” participation of MWBEs on the performance of state contracts.

That law provides more opportunities for MWBE’s to conduct business with New York as long as they satisfy “certain certification criteria.”

The criteria include the requirements that MWBEs not employ more than 300 employees (or that they operate as small businesses) and that MWBE owners not have a personal net worth that exceeds $3.5 million, adjusted annually for inflation (which is about $3.7 million today).

Since 2010, a “substantial” number of firms have expressed concerns that the small business and personal net-worth requirements have had the “unintended” consequence of excluding a “significant” number of MWBEs from participating on state contracts, Cuomo’s office said.

Many of those “unintentionally excluded” businesses are firms that are “still maturing” and are participating in “highly competitive” industries where it is “exceptionally difficult” for them to find success without exceeding the small business or personal net-worth requirements.

The bill that Cuomo signed on Wednesday addresses this issue, his office said.

It authorizes the director of the state’s Division of Minority and Women-Owned Business Development to grant a one-year, provisional MWBE certification status to firms in certain industries, without regard to the personal net worth and/or small-business requirements.

The new provisional certification would be subject to the conclusion of an availability analysis and the director’s determination that the requirements in question have “significantly” contributed to excluding MWBEs within that industry from participating on state procurements.

The provisional certification would come up for review annually so that the director could determine whether such certification for businesses in that particular industry is still necessary in light of the changing dynamics within that space.

Contact Reinhardt at ereinhardt@cnybj.com