Governor’s M/WBE Task Force Adopts Common RFP

New Approach Will Simplify Application; Boost Transparency & Opportunity

Albany - - A state Task Force appointed by Gov. David Paterson today adopted a milestone resolution that for the first time establishes a simplified Request for Proposals (RFP) template for all five major state authorities that issue bonds on behalf of the state.

This development marks the first time that the state’s debt issuance authorities will use the same common and streamlined RFP for underwriting firms seeking to compete for a role in the annual sale of billions of dollars in bonds to support state programs and facilities. The RFP process is the primary means by which the state’s debt-issuing authorities identify qualified banking firms and through which banking firms seek underwriting opportunities from the authorities.

In June, Gov. Paterson signed Executive Order 10 and created the Minority and Women-Owned Business Enterprise (M/WBE) Task Force to boost M/WBE underwriter participation in the sale of state bonds. Today’s action marks a significant achievement toward that goal, as well as other objectives of the Executive Order.

“This landmark new RFP is good news for New York,” said Governor Paterson. “Not only will it help create opportunities for M/WBE underwriters, giving them more reason to invest in this state, it will also make the selection process for underwriters more transparent and increase the pool of underwriters competing for our business. I salute the work of the Task Force for the rapid and comprehensive manner in which the members improved the underwriter RFP process and for their commitment to enact these changes in 2009.”

Paul T. Williams, Jr., Chairman of the Task Force and Executive Director of the Dormitory Authority of the State of New York, said: “Governor Paterson tasked us to reform and modernize the outdated state debt issuance process, provide access for all qualified firms to compete and make the process more transparent. This initiative by Governor Paterson will re-establish New York’s role as a leader for reform and increased accountability in the financial services industry.”

Among other features, the common RFP will:

Standardize the information sought from underwriting firms seeking a role in selling state-supported debt;
Sharply reduce barriers to entry for firms who lack experience in New York but have successfully managed deals in other jurisdictions;
Shorten the authorities’ RFP cycles (to two years from the current three or four years) to increase opportunity for firms to be engaged on a panel of underwriters; and,
Reduce the number of tiers in underwriter panels to allow firms to grow into more senior roles.

The five state authorities that sell state bonds and that will use the common RFP are the Dormitory Authority, Environmental Facilities Corp.; Housing Finance Agency; Empire State Development Corp.; and the Thruway Authority. The presidents or executive directors of these authorities make up Governor Paterson’s M/WBE Task Force with three additional members appointed by the Governor.

On October 30, the Task Force adopted a set of 30 recommendations - - including the uniform RFP - - designed to increase participation of M/WBE firms in state debt offerings. The boards of two of the five debt-issuing authorities, the Dormitory Authority and Housing Finance Authority adopted resolutions last week making those recommendations policy at the authorities. The boards of the Environmental Facilities Corp. and Empire State Development Corp. are expected to take up similar resolutions at their meetings on December 10 and 18, respectively. The Thruway Authority board is expected to take up the matter at a meeting in January.

Each year, the state’s public authorities issue billions of dollars of bonds to support state facilities and programs. Underwriting firms and investment banks are hired to help the state execute and service those transactions. Of the $22 billion in state bonds sold since 2004, only four percent of the transactions were managed or co-senior managed by M/WBE firms.

The Task Force will next meet January 12, 2009 in Albany.