A tough job at a rough time: What MWBE contractors face in 2020

Two female business leaders talk about the ongoing hurdles for minority- and women-owned companies in a high-stakes construction market

Jul.July 19, 2020 01:00 PM

Wendy Peters

Wendy Peters got her start as a teller at Citibank and worked her way up to becoming a branch manager, a position she held for 15 years. Then in 2006, she and her husband, Joseph Peters, decided to launch their own construction management company in Brooklyn, JWP Corporation. Peters talked to The Real Deal about the challenges she and other minority and women business owners face in New York’s construction industry.

How did you get into construction? We decided to start JWP Corporation because my husband is a carpenter by trade. He was part of the carpenters’ union and paying dues, reporting there every morning for work. And they were not giving him work. In the meantime, though, he was doing side jobs for people who knew his skills; they would hire him to do their houses, to renovate. After some time I said, “Why are we wasting time with this union? You’re making money doing your own thing, so why don’t we just start a business?” So it was just really created out of the need for work and to put food on the table.

What challenges do you think MWBE companies face working in New York? I think people’s perception of minority contractors has to change in order for people to get more work. I think there’s a lack of confidence in our ability to perform. You get a lot of calls. Companies want to pretend like they’re reaching out to minority contractors and making an attempt to meet their goal. But really they just want you to respond so that they can say they did their due diligence, and they didn’t find anybody. But they really don’t want to hire you.

How can you tell such solicitations aren’t genuine? Sometimes they send a solicitation, and they give you a few days to prepare an estimate. Come on. If you really want an accurate estimate, you would give us more time to prepare it, to get pricing. But once you see the bid is due next week, you know that they just want documentation to say that they have attempted to reach out. And so for that reason, I just don’t bother.

How often does that happen to you? It happens a lot. I get a few every month.

You mentioned that you are still waiting to be certified by the state as a woman-owned business. Would you prefer to have your own company satisfy the state’s woman-owned business requirements on contracts, and then hire other minority-owned companies? You have a lot more certified minority businesses. You have no problem getting an M certification, but you have an issue getting a W certification. That’s because [New York state] gives you the option of which you want to satisfy. I could always satisfy the W, and then I’d find a million [minority companies] to do whatever else I need to do. But the other way around is very hard because there are not many women-owned businesses out there doing what we do or offering the services that we need.

Why do you think there’s been a challenge in getting the woman-owned certification? My husband is a carpenter. But if you’re certifying enterprises, which I am a part of, then yeah, I do qualify because I’m running it. I’m doing project management. I’m not a carpenter by trade, but I do project management for the projects. I do all of the paperwork, every last communication with the agency, meetings, all of that is involved in an enterprise. Does Bill Gates have to know how to do every single task in order to run Microsoft? I don’t think so.

A popular argument you hear from developers and general contractors to explain lack of diversity on a project is that there aren’t enough qualified minority-owned businesses in the various trades. That is a lie. There are qualified firms out there if they search, and if they really want to build a relationship, they’ll reach out and say, “We want to pre-qualify you,” or “We’re interested in giving you work, can you send over XYZ?”

 

Diana Benjamin

Diana Benjamin spent eight years mastering New York City’s contracting process, guiding general contractors through the requirements for hiring minority- and women-owned enterprises as subcontractors. After stints at the Department of Citywide Administrative Services and the city Comptroller’s Office, she launched her consulting firm, New Genesis Pathfinder, to help MWBEs land government contracts. Benjamin talked to The Real Deal about the various obstacles with diversity-focused bidding and hiring in New York’s construction industry.

When you worked for the city, did contractors often come to you and say, “There are no minority-owned businesses within this trade”? All the time. The [contract] goals are based on the availability of minority- and women-owned firms. For me, it wasn’t just a matter of grabbing from a database and saying, “Okay, here are 20 firms.” My role was to really take a deeper dive and look at companies’ capacity, look at the work that they have done.

So the subcontractor list that I’m providing [underwent] a high-level review. I know that if a contractor were to come back and say, “Oh, well, I can’t find any MWBEs.” then I can say, “Well, this is my list.” Usually they’re looking to get a waiver to reduce the goal, which in my time was not very easy to come by.

Now you’re on the other side of the negotiation table, working with MWBE contractors to help grow their businesses. What’s that like? I’ve seen a lot of the tricks, to be honest, and so I look for the details. If a client is looking to work with a certain company or has been solicited, I can then check to see how [the parties involved] paid in the past — is that a firm that has not been paying their subcontractors?

What other reforms should be made to the contracting process? Debundling some of the contracts, so that MWBEs are able to bid. It doesn’t make sense to have a $50 million [multi-year] contract. An MWBE does not have the capacity to bid on that volume. Debundling the contracts and making them smaller is definitely one way that the city can support MWBEs.

What else do you think that the city and state can do to ensure MWBEs are being paid or being hired in the first place? One of the common stories that I’ve heard is firms being audited. The contract is completed, and now [a government agency] is reaching out to this MWBE subcontractor and saying, “Hey, can you confirm that you’ve been paid?” To me, I think that’s a little too late because the project is now done. There’s a breakdown in compliance, and that opens a door for fraud, to be honest.

These interviews have been edited for length and clarity.


The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...