NY Future Firms: Diversity in Construction
By: Francisco X Pineda
Tags: New York, Small Business, Workforce Development, Infrastructure, Construction

Building Capacity in Construction by Engaging a Diverse Workforce

Originally published on linkedin on 23 September 2019

The New York metropolitan area was undergoing one of the largest construction expansions in recent history. Over $200 billion in construction activity is planned in the next five years alone with infrastructure projects sponsored by the public and private sector expected to last well beyond 2030. In aggregate, this would have represent the region’s largest building initiative in history, with first and second order effects on our future workforce, community and the equity of our economic development.

In considering this extraordinary pipeline of construction activity, capacity constraints on workforce and local firms to absorb this level of construction demand will remain a challenge wether we bounce back to those anticipated levels of the pre-COVID era or not.

Not surprisingly, New York State (NYS) and New York City (NYC) have made Minority and Woman-Owned Business Enterprise (M/WBE) participation a leading priority in their procurement and economic development strategies. Today, NYS and NYC lead the nation, with NYS having awarded $2.5 billion in state contracts to M/WBEs, representing 26.82% M/WBE utilization in FY 2017–2018 with goals set at 30%.

Columbia University was the earliest adopter of high diversity goals. With its minority, women and locally-owned business goal of 35% (and workforce of 40%) established in 2008 — it changed procurement and policy for private entities not otherwise subject to the state mandate.

A further course will be to challenge both government and private entities to implement policies that reduce barriers for M/WBEs like non-assent Project Labor Agreements (PLAs), Owner Controlled Insurance Programs (OCIPs), a portfolio of contracts that don’t require bonding and partnering with Community Development Funding Institutions (CDFIs) to offer mobilization loans on contracts, all of which Columbia University has done.

M/WBEs will account for a significant and increasing part of the construction project delivery and supply chain network. Access and capacity building would level the landscape towards a construction industry more representative of our market population and stakeholder universe while developing a local and regional talent base in workforce and cluster of firms to support these ambitious state and city-building initiatives under way.

Given the recent updates on the Re-Authorization of Article 15-A legislation, it is the perfect time to spearhead an initiative that can meaningfully contribute to evidence-based policy making through research, dialogue and programming.

An opportunity exists to shape New York M/WBE programs in ways that can foster meaningful and sustained change, and just as important, private, NYS and NYC programs can continue setting the example for a national M/WBE agenda. Strengthening these programs through independent research and evidence-based analysis and training should be an important and prominent policy and industry-wide objective no matter where one falls on the policy line.