A quarter-billion dollars, awarded by race

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Mayor Zohran Mamdani’s Racial Equity Plan, released on April 6, commits New York City government to using racial classifications to guide more than two hundred goals across nearly every agency.

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One of the most revolutionary aspects of New York’s procurement system is its audacious policy of setting aside hundreds of millions of dollars in contracts which cannot be bid on except by New York’s favored racial groups. Under the New York City Charter and the rules of the Procurement Policy Board, city agencies are allowed to hand out contracts for goods, services, and construction worth up to $1.5 million without any competitive bidding at all to businesses the city has certified as a minority or women-owned business enterprise.

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This throws the ordinary ethical and anticorruption framework out the door, as long as the vendor on the contract has the right skin color.

The amount of money at stake here is anything but small. In fiscal 2025 alone city agencies registered 1,118 contracts via the women and minority small purchase method, with contracts valued at over $363 million. In 2018, when the city began handing out these contracts, the total amount was capped at $100,000. But it has steadily risen, today encompassing contracts up to $1.5 million. Indeed, the city’s public contracting website lists hundreds of contracts worth more than a million dollars apiece issued under this method, along with thousands of other, smaller contracts.

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Today, the New York City comptroller pleads with agencies to use less competitive bidding to increase the proportion of contracts handed out to minority and women-owned business entities. Ultimately, it will be the taxpayer who foots the bill for this race back to corrupt contracting, as inefficient vendors are selected partly on the basis of their race and partly on the basis of their connection to city government. The consequences cannot be anything but disastrous.

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Mayor Mamdani’s Preliminary Racial Equity Plan moves in the opposite direction. The city’s no-bid rule shows, in dollars and contracts, what that direction means in practice: a quarter-billion in IT spending alone, awarded on the basis of race, without competition, in the largest city in the U.S. The right response is not a fuller plan. It is a simpler rule. The government of New York City should not be in the business of sorting its citizens — or its small businesses — by race.

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