How New York Made Big Diversity Gains in Transportation Contracts

A lot of the work that governments pay for is actually carried out by private contractors. And some governments, especially big cities, have labored for years to diversify their pool of suppliers and contractors, with the goal of spreading the largesse to more communities and preventing the same big companies from getting all the work. It can be slow progress, given the need to put contracts out for competitive bids and build a pipeline of certified Minority and Women-Owned Business Enterprises (MWBEs) that are qualified to do city work.

But in the last three years, the New York City Department of Transportation has drastically increased the share of its contracts that go to MWBEs. The department awarded 32 percent of its total contract spending in fiscal year 2024 to MWBEs — up from 24 percent in 2023 and 11 percent in 2022. The department has awarded 407 contracts worth a total of $432 million to MWBEs in the last three years.

Part of the reason for the increase is Ydanis Rodriguez, a former city councilmember who was named transportation commissioner by Mayor Eric Adams. Rodriguez, an immigrant from the Dominican Republic, says that diversifying the contractor pool helps the department’s spending do more good in more communities, and can help build buy-in for its projects.

The department has taken advantage of the city’s “small purchase” program, which allows contracts of up to $1.5 million to be offered only to MWBEs. Rodriguez has also emphasized getting the message out in community and ethnic media to spread the word about contract opportunities. The effort is part of a larger focus on diversity in contracting from the Adams administration.

Governing recently spoke with Rodriguez about supporting MWBEs, helping promote new ones, and diversifying the contractor pool, along with Carlos Bannister, the assistant commissioner and chief contracting diversity officer for the NYC Department of Transportation, who has worked for the department since the age of 17. (Asked how the corruption investigations at the top levels of the Adams administration were affecting the department’s work, Rodriguez says, “Not at all. Mayor Adams, when it came to how he runs the city, he told all the commissioners, you continue being laser focused. Do your job.”)

The interview has been edited for length and clarity.

Governing: Why did you set this as a priority? What kinds of outcomes are you hoping to promote for the Department of Transportation and for the city? 

Ydanis Rodriguez: My own story is what motivated me to search for opportunities for how I can use the platform that I now have, leading the largest department of transportation of any city in the country. Before I came to New York City in 1983, at the age of 18, I was involved in the Dominican Republic as a member of the Boy Scouts and a member of the progressive movement and the Catholic Church, fighting to get a new building for the high school I attended. I worked in this building [55 Water St.] in the 1980s, when it was mainly occupied by Chase bank. I made sandwiches in the cafeteria.

Now that I have this big platform, I looked at areas where we could make a big difference. Ninety-five percent of the job of this agency is a job we don’t talk about: 800 bridges and tunnels, 6,000 miles of streets that we have to pave, milling, sidewalks, signals, light poles. How can I use that platform? One of the areas I looked at was about MWBE. And the reason why it was very important for me is because my own story is about having the opportunity. Any successful person has someone — their mom, their dad, their friend, their teacher — who motivates the person and says, 'I can give you this information, I want to motivate you to go farther.' It was time now for me to help individuals so that they can, together, create an MWBE, teach them how to navigate the system, and create real opportunity for them to have access.

Governing: What wasn’t the department doing before? Were there easy things to change at the beginning to bring those numbers up? Did you set intermediate goals? 

Rodriguez: One of the items that I open every meeting with is checking with everyone on how we’re doing with the MWBEs. For me it’s important that we have the metrics. Before we get to the end of the fiscal year, I check everything with Carlos [Bannister], how are we doing? You can’t wait until the last three months of the year.

I also established an annual gathering called Doing Business with DOT. We brought hundreds of MWBEs or potential MWBEs. We have a request for proposals for one of the larger contracts that will be closing very soon, the contract to run our speed cameras. So in addition to the small MWBEs, I also invited the larger groups that are competing for the RFP so they can connect. We create the space, the scenario, for them to come together. It was about establishing the goal, creating the structure, empowering Carlos who’s been elevated in his title to the person in charge of MWBEs, providing all the resources that they need and letting those that are MWBEs know that this is not fake. It’s real. The money is here. When we say that we want them to compete, it means we are committed not to doing business as usual.

Governing: Can you say anything about how exactly the progress has been made? Are there certain types of contracts or jobs that you’ve had more success with diversifying the contractor pool for? 

Rodriguez: Having partners in Albany allowed this mayor to accomplish the goal. They gave city agencies the power to establish, first, a $500,000 limit: Agencies could offer any contract up to $500,000 only to MWBE. It’s competitive among MWBEs. And then that number was increased to $1.5 million.

The Horticultural Society of New York has had a contract for years with DOT. Their job is to help us with the beautification and safety of our public spaces. There was not an MWBE requirement in the past. We awarded them a contract last year, and the total was $30 million. For the first time, we split the contract. We said in those $30 million, let’s put $27 million open to anyone who will respond. The Horticultural Society, which used to have the contract, they competed and they got the award. But we said, let’s take $3 million aside only for MWBEs. So we accomplished two goals — one was the $3 million directly to MWBEs, and also, for the first time, the $27 million contract had a requirement of 30 percent MWBE subcontractors.

Carlos Bannister: The term we use is "debundling" the contracts. We debundle the large contracts to take advantage of the MWBE small-purchase method. Larger contracts have goals for MWBE subcontractor participation.

The second key thing is communication. At DOT, our only requirement is to advertise in the City Record. However, we have identified areas and communities that have not historically been participating in contracts. We have made it a point of emphasis to advertise in those neighborhoods with local newspapers. We created a policy that, if we are doing work in Queens, for instance, we find 15 publications in Queens that touch those points and those areas that have never had opportunities.

The commissioner has also created something called the Commissioner in your Borough, so we’ve been going around to all the boroughs and the commissioner creates a platform for me to talk to the community about the MWBE program. How to do business, starting from doing the granular things of going into the system, searching for opportunities. And then after that we follow up individually with small MWBE firms, show them the ropes, what they’re missing, what the opportunities are, how you get access to capital and so forth.

Governing: Are there overlaps between this goal and other goals, like street safety? 

Rodriguez: For me they go hand in hand, because when communities are part of the participation and have contracts, they also establish a level of ownership with the broader goal of the policy. The main responsibility that we have in New York City from a DOT perspective is to improve safety for everyone, but especially pedestrians and cyclists. There’s a lot of money available to do those jobs. Working with MWBEs provides opportunities for members of those communities that sometimes we have opposition from to understand how important those projects are.

Governing: Have you learned anything from other jurisdictions on how to do this well? 

Bannister: When the commissioner first came on, he asked me to come up with a strategic plan and procedures. I took some information from Atlanta, which has a very good MWBE program. I took some information from Denver and from the JFK International Airport MWBE program, and I took some stuff from the private sector, the National Minority Supplier Development Council. I did some deep-dive research to figure out how we can apply those best practices to the work here at DOT.

Governing: To what extent is there still room to improve on this goal? Is it going to plateau and become much harder to make additional gains? 

Bannister: There’s more work to be done in the sense that we hit 32 percent, but now we’re trying to even the pie. We did about $432 million in three years and worked with 407 MWBE contractors. However, we want to diversify and even the playing field. There’s some areas where we see there’s no participation.

Governing: Like what?

Bannister: For instance, the marine industry. The marine industry all across the nation, there are no small businesses [MWBEs] for various reasons. We’re trying to take the initiative with our [Deputy Commissioner for Ferries] Captain John Garvey, to go into schools and teach students that there’s other things you can do, like diving and so forth. You’ve got to go to schools and introduce them to opportunities. One day we might have a child that decides, man, I like swimming, maybe I could take this further and create a diving company. There’s other areas in transportation — traffic lights, there’s not many MWBEs in a large capacity size that can do all this.

Governing: Have there been pitfalls or stumbling blocks, things that you’ve encountered that haven’t worked or that have hampered your progress?

Bannister: Access to capital. These businesses are very small. We want them to ramp up big, like moving from $20,000 to doing $1.5 million — that’s a big jump. A lot of them have the ability but they need funding. The biggest pitfall is really their ability to ramp up as fast as we need to ramp up.

Rodriguez: One of the things I’ll say that helps us a lot is that City Hall in the last three years has provided me all the support I need in order not to offer waivers. In the past, when MWBE contracting requirements were in place, it was very easy for those institutions and non-MWBEs that had that requirement to go to City Hall and ask for a waiver so they didn’t have to comply with that 30 percent. Right now, from Mayor Adams to [Chief Business Diversity Officer] Michael Garner to myself, it’s about, we want everyone to be creative. Instead of going to ask for the waiver, ask DOT how we can help you to connect with MWBEs.