Mayor Zohran Mamdani's administration has unveiled a sweeping Racial Equity Plan that doubles down on the city's practice of awarding public contracts based on race. The plan, released April 6, sets over 200 race-conscious goals across nearly every city agency, including a continuation of the city's controversial no-bid contracting program.
Under the current rules, city agencies can award contracts up to $1.5 million without competitive bidding to businesses certified as minority- or women-owned. In fiscal 2025 alone, agencies registered 1,118 such contracts worth over $363 million. The threshold has risen steadily from $100,000 in 2018, and the city's procurement website lists hundreds of contracts exceeding $1 million each.
The information technology sector is a prime example: hundreds of millions of dollars in public IT spending are now effectively reserved for businesses with owners of specific racial backgrounds. This practice, critics say, locks out firms owned by people outside the favored groups and undermines the merit-based competition that should govern public spending.
“The Constitution requires government to treat people equally under the law,” said Wilson Freeman, an attorney with the Pacific Legal Foundation. “Sorting businesses into ‘eligible’ and ‘ineligible’ pools by the race of the owner is the opposite of equal treatment.” Since the 1989 Supreme Court ruling in City of Richmond v. J.A. Croson Co., race-based contracting set-asides have been deemed presumptively unconstitutional.
The plan does not treat this legal landscape as a problem. Instead, it directs agencies to expand racial classifications in hiring, contracting, training, and public services. The Mayor's Office of Contract Services is instructed to build on existing quotas, not question them. There is no acknowledgment of any legal or moral concern with sorting citizens by race.
This approach echoes broader national debates about race-conscious policies. For instance, California voters will weigh a billionaire wealth tax that also divides along ideological lines. Meanwhile, questions about ethics and public trust continue to surround high-stakes government decisions.
The no-bid system also raises corruption risks. Without competitive bidding, contracts are awarded based on personal connections and race, not price or quality. The city comptroller has actually urged agencies to use less competitive bidding to boost minority contract percentages. Taxpayers ultimately foot the bill for inefficient vendors selected on grounds other than merit.
“Fairness in public contracting means an open door, a published solicitation, and the lowest responsible bidder,” Freeman said. “It does not mean a closed-door award based on the owner’s race.”
As New York City pours billions into infrastructure and technology, the question remains: should the government be in the business of sorting its citizens by race? The Mamdani plan answers yes. Critics say the only proper response is a simpler rule—no discrimination in public contracting.
