MWBE stands for Minority or Women Owned Business Enterprise, and is a certified designation to assist business owners who have been socially and economically disadvantaged to compete for government procurement contracts.

This program was created by Local Law 129, and has been expanded under the de Blasio and Cuomo administrations.  The law establishes targeted minimum goals for MWBE participation in government procurement (purchasing) and government funded development.  

These goals are formulated based on data derived from disparity studies that shows how diverse the groups of businesses that bid on and are awarded government contracts are.  

Consistently, minority and women owned businesses have been shown to be underrepresented.

According to the Comptroller’s office, MWBEs comprise just over half of all firms in New York City, with 539,447 minority-owned firms and 413,899 women-owned firms.  

Despite efforts to increase MWBE participation, we still have a long way to go.  The Comptroller’s office found that in 2016, NYC procured $15.3 billion worth of goods and services, with only 4.8 percent awarded to MWBEs.

This underrepresentation is directly caused by the owners’ social and economic disadvantage.

What exactly is a socially or economically disadvantaged person?  According to the law, it is

a person who has experienced social disadvantage in American society as a result of causes not common to persons who are not socially disadvantaged, and whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.

Capital and credit opportunities are what make and break businesses and dictate growth.  

Societal restrictions that prevent disadvantaged business owners from accessing these assets hurts our economy by hindering competition, stifling innovation, and allowing industries to stagnate under too few players.

The state benefits from increasing the size and diversity of businesses who bid on contracts as well, as it ensures tax dollars are being used most efficiently, lowers the overall costs of procurements, and stimulates economic growth of local businesses.

IDL is proud to be a minority owned contractor contributing to the vitality and diversity of NYC’s construction industry.  Stay tuned for more posts about the challenges facing MWBEs, and resources available to help overcome these obstacles.