AFFIRMATIVE INACTION City Work Scarce, Say Minority Firms By MICHAEL O. ALLEN

nullSunday, March 23, 1997

Many female and minority contractors say they are doing far less business with the city since Mayor Giuliani overhauled an affirmative-action program created to boost their chance of getting contracts.

Twenty of 30 minority and female-owned firms surveyed by the Daily News sharply criticized the 1994 policy shift, saying it has hurt their ability to grow and compete with larger and more established companies. Two others praised the new program and eight had no opinion.

“I just don’t see anybody there reaching out to really help me,” said Lina Gottesman, owner of a metal-refinishing company that has won only one city contract, for $ 5,000, in three years.

The News conducted the survey to assess the overhaul in the absence of hard data showing the number and percentage of contracts awarded to minority and female-owned companies.

City officials provided incomplete statistics despite a year of requests under the state Freedom of Information Law.

Many contractors, however, said the results were clear.

Teresa Johnson said that under a 1992 program for business headed by women and minorities, the city routinely contacted her Manhattan software company.

“I saw my business with the city increase significantly,” said Johnson, 44, who founded her firm in 1988.

Since the policy change, said Johnson, no one calls, and she no longer does business with the city.

Mayor David Dinkins began the 1992 program to reverse alleged discrimination in city procurement. He cited a study that found businesses owned by women and minorities won 8% of $ 3 billion in contracts in 1989, although they represented 25% of bidders.

His program enabled female and minority-owned businesses to win contracts even if their bids were 10% higher than the lowest offers.

Giuliani scrapped the race-based remedy as counter to his goal of “one city, one standard.” A court later ruled the price break illegal.

He also deemphasized a directive that had urged agencies to award 20% of their contracts to minority and female-run firms.

In ordering the overhaul, Giuliani launched a plan he said would help all fledgling firms. He said that because most female and minority-owned businesses are small, they would be aided without penalizing other companies.

Since the switch, officials have said the city is helping more minority and female-owned firms than ever. “I’m proud to say that every year since I’ve been here, that program has grown,” Business Services Commissioner Rudy Washington said when he was named deputy mayor in April.

But The News found:

The city has not compiled an annual tally of the number and value of contracts awarded to minority and female-owned firms since mid-1994.

Washington agreed that a tally is the best way to gauge the program’s success but said, “data gathering is just not a priority right now.”

With many agencies no longer reporting how many minorities and women receive awards, the city has no way of knowing if the goal of awarding 20% of contracts to minority and female-owned firms is being met.

Although the city still invites firms to register as minority or female-owned, Washington could not cite any benefit firms get by doing so. “Good question,” he said.

Most of the minority and female executives surveyed by The News said city agencies seem to feel no pressure to alert them about contracts.

“When you don’t have a goal program . . . encouraging city agencies to meet those goals, you can’t have the same type of results,” said John Robinson, president of the National Minority Business Council.

Many contractors knocked a new Bid-Match program, under which agencies are supposed to notify small firms of contracts worth up to $ 25,000.

“I built six McDonald’s . . . in this city. Each one cost me $ 600,000, so what can you do with $ 25,000? Nothing,” said developer Lee Dunham.

Two firms said they have thrived. Carlos Errico not only won contracts to paint police, fire and sanitation vehicles, but the city put him in touch with a bank that financed the expansion of his Queens shop.

More typical, however, was the view of insurance agent Sam Dunston, head of the Brooklyn Chamber of Commerce minority and women development committee.

“Some minorities may be getting business, but I don’t know any of them,” he said.

GRAPHIC: MISHA ERWITT DAILY NEWS CONTRACTS: Teresa Johnson, who runs software firm, has seen business with city fall off.