How about we address small business inequities?

The confirmation that I needed to run for office came last year after months of fighting in Albany so that the minority community could obtain the opportunity to have the monies that they invest in this city, state and country spent with their firms. Article 15-A, the law that implements these “goals”, expires every five years.  The prospect that we would have to come back to Albany in another four years to fight this same fight lacked common sense to me. Of course, the fight starts well before the law expires.  But four years from now it would still be just imperative to ensure that the diversity of the tax dollars going into the pot matched how those tax dollars were spent.  I realized that this and many other areas of the broken system was keeping firms in struggle mode. The reality is that it’s challenging to grow in struggle mode.  People know that and that is why they lobby and pay good money to ensure that things don’t change. 

There are inequities all around us. Some are disguised as risk management, some inequities are written into policy to legitimize them and some inequities are blatant.  Inequity is why I decided to start this blog.  After months of trying to have major outlets even acknowledge me as a candidate for the 2021 NYC Mayoral race, interviews that were never aired, segment footage that was lost, articles not written, I decided to create my own lane. I would be my own voice and work to get my message and platform out there.  

One of the biggest inequities that we see, the inequity that if changed would create changes in housing, employment, education and health, is the inequity that exists in how city and state government procure their contracts.  We simply have not created a system that would allow small businesses to thrive and grow while working for the government.  

So how do we change that?  We must enact policies that are going to create real opportunity and allow the city to be a leader in the efforts to work with minority and small businesses.  Below are a few of the areas where we can start.  By implementing these few policies we can take businesses out of struggle mode and into capacity.  

Elimination of Directive 7 / Auditing from the NYC payment process

https://comptroller.nyc.gov/wp-content/uploads/documents/Directive-7_AuditVoucherContracts.pdf

Auditing should not be done during the payment process.  The goal of the payment process is to pay the entity.  This procedure should be replaced with an outside auditing consultant that will randomly audit payments to identify risk and gaps and put the proper controls in place. 

Value add:  Staff currently assigned to auditing can be reassigned to processing payments, eliminating the current payment backlogs.  Or they can be reassigned to tasks that are actually helpful to constituents and ensure that projects are run in a more efficient manner.

Change Orders

All change orders MUST be negotiated within 30 days and prior to the work being completed.  Every project should have a 5 – 10% contingency based upon the project scope for change orders. 

Value add:  Ensures there is agreement and consensus prior to the work being completed, thereby mitigating risk for both the city and the contractors/suppliers.  Reduce cost to the city for processing change orders.  When it takes a year for a change order to be approved there are many man hours being utilized and a cost associated with that.

Project Deposits

City to develop a vetting process to be able to provide contractors/suppliers/nonprofits with deposit for their contracts.  Once the vetting process is established, develop a graduated scale established for deposits for contracts based upon contract size.  The deposit can be based upon a grade that is provided to a firm.  A firm that retains a minimum B grade would be able to move up on their deposit scale.  You would start out at 10%.  If you perform well and get a good grade on that project you can move up to 20% for your next project.  If you continue to perform well and obtain a B or higher you can move up to 30% with 30% being the max deposit a firm can obtain.

— Value add:   It will allow more firms to be able to participate in working with the city. Projects run smoothly when there is access to capital. 

Utilization of credit/debit cards

Eliminate the acceptance of only checks or money orders from all agencies.  All agencies should provide the option to pay for services/permits etc. with a debit or credit card.

— Value add:  This will create process efficiency and better utilization of staff time.  In addition, it puts an undue burden on constituents when only checks or money orders are accepted especially when obtaining custodial permits.  If the check or money order amount is not accurate the constituent must go and return said check or money order and obtain a new one.  It is not a good use of a firm owner’s or the city’s time in that time has been spent twice on one transaction.  There will be cost savings to the city with this process efficiency.

Worker’s Comp/General Liability cost

These costs are exorbitant for small firms.  We need to review insurance requirements across projects. In addition, insurance companies should no longer be allowed to audit policies.  In no other industry do we allow for a company to back a bill for a period that has already passed just because the firm made more money or had additional payroll.  Insurance should be no different.  By allowing audits we are saying that if someone does well another company deserves their cut for doing nothing.  While the firms have paid more in expenses it does not necessarily equate to additional profits.  Some firms could have had additional payroll or income but may have experienced a loss.  

— Value Add:  Firms will be able to turn a profit and avoid unanticipated additional insurance costs that would take away from their profits.  Also, they will no longer have to incur the lengthy cost associated with burdensome audits which in many instances takes time away from their businesses.

Now is the time to address all of the things that we know have been wrong for so long that have been overlooked or ignored.   The good news is that I have already presented these solutions to the City Council as a means to inequities.  Let’s continue to reach out to the City Council and apply pressure to ensure that the necessary changes are made in all areas that will truly allow NYC to become the Fairest Big City in the World.  The city we were promised.  Find your local city council person here. 

Leave a Comment