When the city's education department decided to change its procurement rules to incentivize schools to consider more minority- and women-owned enterprises for contracts, many businesses owners cheered the decision. After all, just 6% of the total $34.6 billion in contracts given out by the city were awarded to M/WBEs, according to the latest figures from city Comptroller Brad Lander.
Now, more than a year after these changes were approved, some business owners say not much has changed and contracting with minority vendors at the DOE remain very low. Another hold up stems from the change in the registration process for W/MBEs in the comptroller's office, which was prompted by a federal investigation into the DOE, which accuse the agency of awarding contracts through a noncompetitive procurement process.
The Lag
In November 2023, the city’s Panel for Educational Policy, a 24-member voting group overseeing the New York City Public School System, approved changes to the DOE procurement rules, increasing the amount that the department can certify contracts from outside vendors to $50,000 from $25,000.
The move was meant to incentivize schools to provide M/WBEs with larger contracts, making it easier for these businesses to grow. But the latest city figures shows how little an impact this change has had.
The report also found that less than 2% of contracts were given to Black-owned M/WBEs, Asian American WBEs, Hispanic WBEs, and Native American M/WBEs.
“Despite having one of the nation’s most diverse community of business owners, these findings frustratingly show that M/WBEs have fewer city dollars in their collective pockets than at the start of the Adams administration,” Lander said when the report came out on Feb. 14.
However, some W/MBE vendors, like Kaya Royal, owner of the the Royal Foundation LLC, said it is the comptroller's office not putting the PEP decision into effect.
“We never received an answer as to why the ruling of 2023 has not been implemented, that is why we intend to hold Brad Lander accountable,” said Royal, whose firm provides career, training, social-emotional learning, health, wellness, nutrition and culinary classes in several DOE schools. “We're not asking for government handouts. What we're asking for, what we're demanding is what was approved through the PEP.”
Dr. Shango Blake, the founder of Black Edfluencers Unite, a collective of Black educators, community leaders and parents, works with Black vendors who contract with DOE schools. He said the comptroller's office is not approving the vendors, making it hard for the vendors to survive.
"If we're trying to build generational wealth, specifically communities of color, and you have these small businesses that operate like mom-and-pop shops, where they are the marketers, they are the back-office support, they are the direct deliverers of service, additional funding will allow those vendors to scale their business up,” Blake said.
The Holdup
Lander, however, says the problem lies with the DOE, which has failed to inform W/MBE vendors to the change in the registration process in his office.
Typically, contracts are approved by the PEP and then handed over to the DOE’s legal team, where they are finalized and delivered to the comptroller, according to Chalkbeat. Through 2024, the DOE was able to ask vendors to self-register directly with the agency, a method that was previously approved by the comptroller's office.
However, in October 2024, Politico reported that federal agencies served the DOE with a subpoena as part of their investigation into illegal procurement processes. The comptroller's office then did not renew the ability for the DOE to self-register vendors on their own, and instead asked the department to tell W/MBEs to register with the comptroller's office instead, according to a letter sent by Lander to Elisheba Lewi, the chief procurement officer at the DOE.
Lander, who spoke about the issue at a recent Black History Month celebration, said the DOE has not been asking the vendors to register with his office.
"They are not being truthful to M/WBE vendors because we're not preventing them from entering into contracts up to $50,000," he said. "They just have to send them to us for registration. It won't take any more than 30 days longer and we’ll gladly register their contracts, but they haven't done any of them and that's not on us, that's on the DOE."
When asked to comment about the confusion to the registration process, a DOE spokesperson did not answer directly, but did say the department is communicating with the comptroller to figure out a solution.
"Despite recent changes imposed by the Comptroller’s Office that have restricted contracts from NYC Public Schools to M/WBEs, we have continued working diligently to align our procurement practices with the city’s broader M/WBE goals. We are communicating with the comptroller’s office about this matter and look forward to working together towards a common equity goal as we refine our processes to ensure transparency, compliance, and meaningful participation for diverse businesses," a DOE spokesperson said through a statement to BK Reader.
“New York City Public Schools remains fully committed to our M/WBE goals to ensure we secure the best and most efficient services from vendors while providing equal opportunities to all businesses. In FY24, more than 14% of our eligible contracts were awarded to M/WBEs, accounting for 24% of the value of eligible contract registrations—outpacing many other city agencies," the statement also said.
Royal, who said she is looking forward to an upcoming meeting with the DOE and comptroller's office, said the disarray with the city's contracting system has a direct impact on children, schools and small M/WBE vendors like himself.
"If I'm gone after six months, well, the kids have forgotten again. It takes a while to establish trust and relationships with kids and parents,” said Royal. “It's hurting our M/WBE vendors from earning a living and providing equity to our communities.”
