N.Y. Stepping Up Enforcement of MWBE Regulations, Levying Fines
October 13, 2016

According to media analysis of a newly-issued New York State report, a growing number of businesses have been fined for not complying with the State’s increasingly toughening contracting requirements for hiring minority- and women-owned business enterprises, or MWBEs.

As covered in the Albany Business Review, New York businesses were issued a total of 36 violations and fined $765,610 during the 2015-16 fiscal year that ended in March, according to a new report by the Division of Minority and Women’s Business Development at Empire State Development Corporation. This is the highest number of both violations and fines since Gov. Andrew Cuomo took office in 2011.

Gov. Cuomo has made a point to encourage businesses to include qualified MWBEs when going out to bid on public works contracts, including increasing the “contract utilization rate” to 30 percent. The requirement is to make a “good faith” effort to use vendors that are MWBE businesses. Those companies that do not show they have made this effort can face violations and fines.

While many applaud the increased MWBE contracting requirements, government agencies as well as private companies doing business in the public sector need to ensure they are following the latest guidelines. Businesses subcontracting work to MWBEs in particular should be vigilant in ensuring that that the MWBE businesses they are considering are indeed viable companies capable of doing the work required, not “flow-through” entities which do not actually perform the contracted work.

The Battery Park City Authority hired Lemire LLC, an MWBE business itself, earlier this year “as a proactive step” to maintain the authority’s “outstanding record of vendor compliance,” according to New York State’s Division of Minority and Women’s Business Development.

Original press release