Complying with MBE/WBE/DBE Goal Requirements in NYS

In October 2014, Governor Cuomo announced that his administration was increasing the goal for participation by minority and women-owned business enterprises on state contracts from 20% to 30%. Shortly after this announcement, a Manhattan Grand Jury issued a report examining the vulnerability of programs providing opportunities for MBE/WBE to fraud and misuse. At both the federal and state levels, investigations of DBE/MBE/WBE fraud have become commonplace, resulting in criminal charges, civil liability, suspensions and debarment from work on public projects.

To complicate matters, Empire State Development recently changed state policy for crediting MBE/WBE utilization of brokers and suppliers on state-funded contracts. Credit for MBE/WBE brokers on such contracts has been reduced from a high point of 25% to only the commission or markup for the items brokered. Credit for suppliers has been reduced from what had been in many cases 100% credit to only 60% of the supply contract value. On another front, numerous MBEs and WBEs are either losing their certifications or the functions for which they are certified are being reduced by Empire State Development. The net result is that it is now even more difficult for contractors and subcontractors to attain the expanded MBE/WBE goals on public projects. Many in the construction industry continue to lack full awareness of all the elements of MBE/WBE/DBE utilization and compliance, as well as the consequences of fraud.

Attendees of this seminar will learn how to better comply with MBE/WBE/DBE requirements through good faith efforts, communication and documentation, how to determine whether an MBE/WBE/DBE is performing a commercially useful function, and what contractors and subcontractors can and should do to avoid violations and potential fraud charges.

Speakers
James Barriere, Hinckley, Allen & Snyder, LLP
Jennifer Harvey, Couch White, LLP
Elan Parra, Lemire LLC