NYC invests $10M to boost minority, women participation in construction
- New York City has created a $10 million fund to assist women- and minority-owned businesses win construction projects, according to Crain's New York Business.
- The money will go toward paying for up to $500,000 of surety bonds per contract. City contractors are required to furnish the bonds, which guarantee they will satisfactorily perform work and pay their bills, but they are difficult to obtain for smaller companies without a track record of completed projects.
- Aside from helping women- and minority-owned firms become successful, New York City building officials said the program will help other contractors who are required to hire a certain percentage of these firms but can't find enough of them to meet their mandated quotas.
The city aims to issue $16 billion worth of contracts to minority- and women-owned businesses by 2025, and the bond assistance program should help it meet that goal.
Considering that federal and state governments spend hundreds of billions on public construction work and typically set aside 5% to 10% for MBEs and WBEs, the potential payoff is substantial. However, many contractors have reported difficulty finding enough qualified firms.
Lengthy and complex applications and paperwork requirements are a few reasons that firms have a hard time earning the certifications required to qualify as minority businesses. There are plenty of third-party companies that will help with that task, but many are prohibitively expensive.
If a firm does manage to navigate its way through the certification process, it could be overwhelmed by the scope and requirements of a federal or state project. And because there are strict rules about how non-certified firms can assist, minority businesses are sometimes left on their own, without a mentor to show them the ropes.
Follow Kim Slowey on Twitter