Waste of the Day: NY Contracts Are Intentionally Expensive
Topline: A transportation agency run by the states of New York and New Jersey is paying minority-owned businesses 10% more to do the same work as other vendors, an illegal move the conservative nonprofit America First Legal alleges in a new complaint.
Key facts: The Port Authority of New York and New Jersey spends over $9 billion a year overseeing bridges, tunnels and airports in and around New York City, and in 2021 it set a goal to award 20% of its contracts to minority-owned businesses. The agency’s supplier diversity webpage explains that, to meet this goal, some contracts will be offered to minority-owned businesses even if another company is willing to take the job for 10% less money.
The nonprofit filed a civil rights complaint with the U.S. Department of Transportation, the Environmental Protection Agency, and the Office of Management and Budget, alleging the practice violates Title VI, a law banning recipients of federal money from discriminating based on race, the New York Post reported.
The DOT has given $3.6 billion to the Port Authority since 2008, and the EPA awarded a $451 million grant last year.
“This means that for every million dollars on a contract bid, the Port Authority will pay up to an extra $100,000 to engage in race-based discrimination,” the complaint says. “In addition to being wasteful of taxpayer and ratepayer resources, it is illegal and simply un-American.”
The complaint also calls out the Port Authority’s Diversity Management portal, which offers mentorship programs and skills training only for minority-owned businesses.
The nonprofit also points out that the billions of dollars in federal funding could be at risk if the Port Authority is found to have ignored anti-discrimination laws and President Donald Trump’s executive orders ending DEI programs.
Background: The Port Authority spent just under $2 billion on payroll in 2024, with 14,298 employees who outearned New York Gov. Kathy Hochul’s salary of $250,000. Police Sergeant Melvin Cruz earned almost $280,000 in overtime alone, bringing his total pay to $475,599, according to payroll records obtained by OpenTheBooks.com.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Summary: Regardless of the politics surrounding the Port Authority’s purchasing decisions, taxpayer funds should always be spent with low prices and quality of service as the top priorities.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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