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Activity SJa1.3
Objective
Equity + Inclusion in Procurement
Concept
Social Equity + Justice
Activity Type
Impact
Rating System Application
Implement inclusive procurement activities in Tier 1 Suppliers' procurement of Tier 2 Suppliers
Scope
The Owner’s Tier 1 Suppliers shall integrate an agreement to adhere to the Owner Inclusive Procurement Policy into each step of their procurement process for Tier 2 Suppliers within the project. The aim is to create environments where all Tier 2 Suppliers, regardless of their background, feel genuinely valued and have equal opportunities to succeed on the project. The scope is limited to integrating these principles by Tier 1 Suppliers and does not extend to evaluating their application or outcomes.
Requirements
Act to Avoid Harm
- 01.
Integration of an agreement to adhere to the Owner Inclusive Procurement Policy into each stage of Tier 1 Supplier’s procurement process of their Tier 2 Suppliers (RFQ, RFP/tender, marketing, interview, selection process, and legally binding contract) that shall include adding a universal contract clause in the legally binding agreement (i.e., contract) creating a standardized, self-propagating requirement that each party must include in their legally binding agreements, irrespective of their position in the supply chain (see Guidance below).
Benefit Impacted Parties
- 02.
Tier 1 Supplier adopts an Inclusive Procurement Policy that includes:
- a.
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.
hiring and paying project vendors 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 vendors (see Guidance in Activity SJa2.4) regardless of race, ethnicity, color, religious beliefs, sex (including pregnancy, related conditions, gender identity, sexual orientation), national origin, age, disability, genetic information, economic background, or cognitive differences
- d.
proper safeguards to protect sensitive information, including 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.
Contribute to Solutions
- 03.
Tier 1 Supplier plan to monitor Tier 2 Supplier performance against the inclusive procurement contractual clause.
Indicators
The performance indicator is the Tier 2 inclusive procurement process percentage. The first context indicator is the number of Tier 1 Suppliers that adopted an Inclusive Procurement Policy according to the requirements. The second context indicator is the total number of Tier 2 Suppliers inclusively procured.
To calculate the performance indicator:
To calculate the performance indicator:
- Determine the total number of potential Tier 2 Suppliers and suppliers going through the procurement process.
- Determine the total number of potential Tier 2 Suppliers and suppliers where inclusive procurement principles were integrated into the process.
- Calculate progress as the percentage of potential Tier 2 Suppliers where inclusive procurement principles were integrated into the process.
This is expressed mathematically as:
(# of Tier 2 Suppliers where inclusive procurement principles were integrated into the process / # of Tier 2 Suppliers in procurement process) x 100
Scoring
Points assignment
| Points | Percentage of Inclusive Procurement Processes Integrate |
|---|---|
| 1 point | <25% integrated inclusive procurement processes |
| 2 points | 26 - 50% integrated inclusive procurement processes |
| 3 points | 51 - 75% integrated inclusive procurement processes |
| 4 points | 75%+ integrated inclusive procurement processes |
Additional points assignment
| Points | Additional Requirements Satisfied |
|---|---|
| +1 point | 50+% of Tier 1 Suppliers that meet requirement #2 |
| +5 points | 50+% of Tier 1 Suppliers that meet requirement #3 |
Documentation
- 01.
List of financial, human, and material resources utilized for this activity.
- 02.
Evidence of how the agreement to adhere to the Inclusive Procurement Policy was integrated into each stage of the procurement process, demonstrated through copies of RFQs, RFPs, marketing materials, interview guidelines, selection process documents, and/or contracts with the universal clause inclusion.
- 03.
A copy of the Tier 1 Supplier's Inclusive Procurement Policy with evidence of its communication to workers and the public.
- 04.
“Equal pay for equal work” documentation showing that the Tier 1 Supplier hires, promotes, and pays workers without discrimination. This could include HR policies and other relevant documents.
- 05.
A copy of the monitoring plan created by the Tier 1 Supplier to monitor supply chain partner performance against contractual clauses.
- 06.
A report showing the percentage of potential Tier 2 Suppliers where an agreement to adhere to Inclusive Procurement Policy was integrated into the process.
Guidance
On the universal clause
Below is example language that meets Requirement 1 and ensures consistent adherence and minimizes the risk of misinterpretation or oversight.
Universal Inclusive Procurement Clause
By entering this contract, the Contracting Party pledges adherence to the Inclusive Procurement Policy (Appendix <X>). Furthermore, the Contracting Party agrees to embed this clause verbatim in all contracts established with direct suppliers or sub-suppliers for this project, ensuring these entities both uphold the stipulated policies and continuously propagate this exact clause in their subsequent agreements.
Should the Contracting Party not adhere to the policies, fail to propagate this clause, or breach other contract stipulations, a 60-day rectification period will be provided. If non-compliance persists beyond this period, business activities may be temporarily suspended. The non-compliant party shall be responsible for seeking and undergoing capacity-building or training programs relevant to the non-compliance, with evidence of completion to be provided. In instances of severe or repeated non-compliance, the contract may be terminated.
Note: This clause is meant as an example of what should be included and is not offered nor shall be construed as legal advice. It is advisable and recommended to consult with a licensed attorney in your jurisdiction, as they would have the specific expertise and local knowledge to provide legal advice tailored to your situation.
Referenced Source
- ISO 30415:2021, Human resource management – Diversity and inclusion
- Universal Declaration of Human Rights (1948)