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Bad economics in the Big Apple: New York Mayor Rudolph Giuliani kills a program designed to give 20% of city contracts to minority- and women-owned companies.

New York Mayor Rudolph Giuliani kills a program designed to give 20% of city contracts to minority- and women-owned companies.

The New York Times called the move "wrong-headed - and hard-headed."

Anthony W. Robinson, president of the Minority Business Enterprise Legal Defense and Education Fund in Washington, D.C., says it was "an economic lynching."

But the strongest response to New York Mayor Rudolph W. Giuliani's decision to eliminate a city contracting policy crucial to the development of the city's minority- and women-owned business enterprises (M/WBEs) came from the entrepreneurs themselves. "This is a step back to the 1960s when minority contractors had to picket and riot in order to get the jobs," says Dolly Williams, vice resident of A. Williams Trucking and Trenching Inc., a Brooklyn-based excavation and demolition company.

On January 24, Giuliani announced that he had eliminated the city contracting provision under which M/WBEs could be awarded city contracts even if their bids were up to 10% higher than the lowest bid. Minority business advocates say that Giuliani's decision cripples the two-year-old New York City minority contracting program launched during the administration of his predecessor, David N. Dinkins.

Giuliani had condemned the provision during his mayoral race against Dinkins. Then, during brief period of outreach to New York's minority communities shortly after the election, he said that he'd reconsider his position. (Several calls to officials in the Giuliani administration went unreturned.)

"With all of the city's problems," says Williams, whose company gained contracts through the program, "why is the mayor making the dismantling of this program his first priority?"

It wasn't because the program was a burden on the city economy. It cost the city only $2.7 million in added contracting expenses, while giving $270 million in city contracts to M/WBEs. Between 1990 and 1993, the share of city business received by minorities and women nearly doubled, from 9% to 17.5%.

And while Giuliani painted the program as an "indefensible" form of reverse discrimination against white males (a view upheld by New York's Supreme Court on February 2), firms owned by white men actually got the largest share of city business through the program. Thanks to provisions giving preferences to majority firms joint-venturing with M/WBEs, companies headed by white men got $22.8 million in city contracts last year, versus $13.4 million for Hispanic firms, and $2.9 million for black firms.

"This just shows the connection between political concerns and economic development concerns," says Wallace L. Ford II, the former commissioner of New York's Department of Business Services under Dinkins. "Many people are now relearning this lesson in a much different classroom."
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Author:Hayes, Cassandra
Publication:Black Enterprise
Date:Apr 1, 1994
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