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Activity SJa1.1
Objective
Equity + Inclusion in Procurement
Concept
Social Equity + Justice
Activity Type
Impact
Rating System Application
Achieve equity + inclusion in Tier 1 Supplier procurement
Scope
The Owner shall set and implement inclusive procurement principles, defined in Requirements, in pursuit of the goal of creating environments where all Tier 1 Suppliers, regardless of their background, feel genuinely valued and have equal opportunities to succeed on the project. Further, upon procuring services for the project, Owner shall integrate these principles into each stage of the procurement process in pursuit of this goal. The scope includes setting and implementing these principles but does not cover the assessment of their effectiveness.
Requirements
Act to Avoid Harm
- 01.
An Owner adopted Inclusive Procurement Policy that includes:
- a.
Recruiting, hiring, promoting, and paying project employees without discrimination based on race, ethnicity, color, religious beliefs, sex (including pregnancy and related conditions, gender identity, and sexual orientation), national origin, age, disability, genetic information, economic background, or cognitive differences
- b.
Recruiting, hiring, and paying project Suppliers without discrimination based on race, ethnicity, color, religious beliefs, sex (including pregnancy and related conditions, gender identity, and sexual orientation), national origin, age, disability, genetic information, economic background, or cognitive differences
- c.
Equal pay for equal work for project employees and Suppliers (see Guidance in Activity SJa2.4) regardless of race, ethnicity, color, religious beliefs, sex (including pregnancy and related conditions, gender identity, and sexual orientation), national origin, age, disability, genetic information, economic background, or cognitive differences
- d.
Proper safeguards to protect sensitive information, including all demographic information, including compliance with privacy laws relevant to the jurisdiction, conducting all data collection, handling, and processing with explicit consent where required, and in accordance with a well-defined privacy policy
- e.
Communicating the policy and progress internally to project employees and Suppliers
- a.
- 02.
Integration and communication of Inclusive Procurement Policy into each stage of the procurement process with Suppliers (RFQ, RFP/tender, interview, selection process).
- 03.
Proactive outreach to diverse Suppliers (see Guidance below) to ensure they are aware of and have equal access to procurement opportunities, with the goal of ensuring they represent at least fifty percent of the pool of potential suppliers.
- 04.
Clear and objective criteria for evaluating all potential suppliers ensuring the selection process is merit-based and non-discriminatory by using a “blind-bidding” process that removes identifying information from proposals creating a merit-based selection based on ability to deliver against project selection requirements.
- 05.
Simplification of procurement processes, to encourage the participation of a broader range of suppliers, such as making documentation accessible, using Supplier diversity portals, allowing longer response times, and adopting pre-qualification systems, while ensuring that these practices maintain competitive fairness.
Benefit Impacted Parties + Contribute to Solutions
- 06.
Establish workforce and Supplier training programs to prepare them to participate in formal procurement processes and proactively reach out to diverse Suppliers to ensure they are aware of and have equal access to the training.
Indicators
The performance indicator is the percentage of diverse Supplier spend on the project. The context indicator is the total number of diverse Tier 1 suppliers working on the project.
To calculate the performance indicator:
To calculate the performance indicator:
- Determine the total spend for all Tier 1 Suppliers working on the project.
- Determine the total spend for all diverse Tier 1 Suppliers working on the project.
- Calculate progress as the percentage diverse Tier 1 Supplier spend for the project with the reporting period.
This is expressed mathematically as:
(Total Tier 1 Diverse Supplier spend / total Tier 1 Supplier spend) x 100
Scoring
Points assignment
| Points | Percentage Tier 1 Diverse Supplier Spend |
|---|---|
| 3 points | 5-12% diverse spend |
| 4 points | 13-19% diverse spend |
| 6 points | 20+% diverse spend |
| 8 points | 50+% diverse spend |
The scoring rubric is based on current industry averages for diverse supplier spend?.
Additional points assignment
Choose one (OR semantics)
| Points | Additional Requirements Satisfied |
|---|---|
| +1 point | Requirement #6 satisfied for one underrepresented supplier |
| +2 points | Requirement #6 satisfied for two underrepresented suppliers |
Documentation
Note: Tables provide a structured way to record and organize the information required for each review document. The Owner can fill in these tables as they implement their policies, carry out their initiatives, conduct their procurement processes, and manage their supplier spend. Here are examples for these activities:
- 01.
List of financial, human, and material resources utilized for this activity.
- 02.
Inclusive Procurement Policy in compliance with Requirements along with evidence of adoption.
- 03.
Evidence of its communication to employees and Suppliers during the procurement process.
- 04.
The RFP invitation list, categorized by underrepresented and non-underrepresented groups, to verify that at least 50% are underrepresented suppliers, including documentation of targeted recruiting efforts to reach out to underrepresented suppliers. This could include records of communications, advertisements, or invitations to bid.
- 05.
Evidence of the total spend on Tier 1 suppliers.
- 06.
Evidence of the total spend on Tier 1 diverse Suppliers, along with copies of third-party certifications (or workforce assignment spreadsheet).
- 07.
Evidence of a process that removes identifying information from proposals, ensuring a merit-based selection. This could be redacted proposal samples, process guidelines, or software/tool specifications used for blind-bidding.
- 08.
Documentation detailing the simplification of procurement processes (if applicable), such as accessibility of documentation, use of supplier diversity portals, extended response time frames, and pre-qualification systems.
- 09.
Evidence of outreach activities (if applicable) to identify and support businesses owned by underrepresented individuals or groups. This could include training materials and attendance records, joint-venture agreements or partnerships with diverse businesses, and records of resources provided to diverse Suppliers.
Table 1: Policies and Communication
| Date | Policy Type | Policy Version | Communication Method | Target Audience | Notes |
|---|---|---|---|---|---|
| 2023-07-01 | Inclusive Procurement Policy | V1.0 | Employees | Initial policy introduction | |
| … | … | … | … | … | … |
Table 2: Supplier Diversity Initiatives
| Date | Initiative Type | Target Supplier | Result | Diversity Designation |
|---|---|---|---|---|
| 2023-07-01 | Targeted Recruiting | ABC | Positive response | Woman-owned business – official WBE |
| 2023-07-02 | Outreach Activity | DEF | No response | Black-owned business |
| … | … | … | … | … |
Table 3: Procurement Processes
| Date | Process Stage | Supplier Name | Type of Supplier (Diverse / Non-diverse) | Included in RFP (Yes/No) | Notes |
|---|---|---|---|---|---|
| 7-1-23 | RFQ | ABC | Diverse | Yes | RFQ sent via email |
| 7-2-23 | Interview | XYZ | Non-diverse | Yes | Interview scheduled for next week |
| … | … | … | … | … | … |
| Total Diverse Suppliers in Procurement Process* | 50% |
*Calculated by adding up all Underrepresented/Yes Suppliers and dividing by total number of Yes Suppliers
Table 4: Supplier Spend
| Date | Supplier Name | Type of Supplier (Diverse / Non-diverse) | Amount Spent | Document Type | Notes |
|---|---|---|---|---|---|
| 2023-07-01 | ABC | Diverse | $10,000 | Invoice | Initial project payment |
| 2023-07-02 | XYZ | Non-diverse | $15,000 | Contract | Contract signed for new project |
| … | … | … | … | … | … |
Guidance
On scope of this Activity
This Activity covers the implementation of inclusive procurement principles (by adhering to the Requirements) by an Owner with the aim of increasing diverse representation among both Tier 1 suppliers and Owner employees. It outlines the requirements, with specific focus on the adoption of an Inclusive Procurement Policy, integration of equity + inclusion into the procurement process, and proactive outreach efforts for diverse Suppliers and employees from underrepresented groups.
The Activity does not dictate the specific methods or strategies to be used in achieving the outlined objectives. It also does not cover procurement processes beyond Tier 1 suppliers or the broader supply chain management practices of the Owner.
The Activity is intended to be applied in the context of procurement processes for projects where the Owner has direct control over supplier selection and can influence procurement policies and practices. It is also applicable to the selection for project assignment practices of the Owner's internal team. It is not intended for contexts where the Owner has limited control or influence over procurement or hiring decisions.
On definition of a diverse Supplier
A diverse business is defined as 51% or more owned, operated, and managed by an individual or group that is part of a traditionally underrepresented or underserved population. The following are diversity categories:
For US-headquartered businesses:
- Women’s business enterprise (WBE)
- Minoritized business enterprise (MBE)
- Lesbian, gay, bisexual, transgender business enterprise (LGBTBE)
- Minoritized, women, or veteran business enterprise (MWVBE)
- Disabled-owned business (DOBE)
- Veteran-owned business (VOB)
- Disadvantaged Business Enterprise (DBE)
- HUBZone Small Business
- 8(a) Small Business
- Woman-owned small business (WOSB)
- Veteran Owned small business (VOSB)
- Service-disabled veteran-owned business (SDVOB)
SEAM requires that businesses designated as diverse be certified by a third-party.
For suppliers that do not meet the small or diverse business characteristics defined above, they can be counted in the scoring if they meet the following requirements:
- 51% or more of their qualified assigned project workforce fall into a diverse category
- The supplier meets the equivalent of requirements #1, #2, and #3 of this Activity
On actions to broaden range of diverse Suppliers
The following actions represent guidance from ISO 30415: 2021, Human resource management - Diversity and inclusion regarding actions that organizations should adopt to achieve equity + inclusion for procurement activities62:
- Engage in supplier outreach activities to identify a variety of potential suppliers, create opportunities for businesses owned by demographically under-represented individuals or groups, expand impacted party relationships and improve organizational resilience;
- Simplify procurement processes, like accessible documentation, use of supplier diversity portals, and adoption of pre-qualification systems to provide procurement opportunities to the broadest range of suppliers;
- In the supplier selection stage, assess how the HR management practices of potential supply chain partners align with the organization’s D&I principles;
- Incorporate D&I contractual clauses that require supply chain partners to provide decent work, safe and secure working conditions, and fair and respectful treatment of people;
- Monitor supply chain partner performance against D&I contractual clauses;
- Engage with supply chain partners through, for example, supplier forums and feedback mechanisms, to share and exchange D&I experience and expertise, strengthen impacted party and community relationships, and develop economic opportunities;
- Collect data on the activities related to procurement and supply chain relationships, such as the number of, and spend with, organizations owned by demographically under-represented individuals or groups; and
- Periodically review the D&I provisions in procurement policies, processes and practices, and performance of their supply chain partners.
Additional Resources
- Supplier Gateway Enhanced Digital Certification™ is a third-party verification of small or diverse business status for suppliers that is easily accessible, low cost and requires no site visits. Available online: https://www.suppliergateway.com/suppliers/enhanced-digital-certification/
Referenced Source
- ISO 30415:2021, Human resource management – Diversity and inclusion
- Universal Declaration of Human Rights (1948)
- US Civil Rights Act (1964)