Activity SJa1.4

Objective

Equity + Inclusion in Procurement

Concept

Social Equity + Justice

Activity Type

Impact

Rating System Application

B+I:D B+I:O O+M:D O+M:O

5 · 8 · 10 · 12

Achieve equity + inclusion in Tier 2 Supplier procurement

Scope

The Owner’s Tier 1 Suppliers shall set and implement inclusive procurement principles, defined in Requirements, in pursuit of the goal of creating environments where all Tier 2 Suppliers, regardless of their background, feel genuinely valued and have equal opportunities to succeed on the project. The scope includes setting and implementing these principles by Tier 1 Suppliers but does not cover the assessment of their effectiveness.

Requirements

Act to Avoid Harm

01.

Tier 1 Supplier targeted recruiting efforts to reach out to underrepresented suppliers such that underrepresented suppliers comprise at least fifty percent (50%) of the pool of potential suppliers.
02.

Tier 1 Supplier blind-bidding process that removes identifying information from proposals creating a 100% merit-based selection based on ability to deliver against project selection criteria.

Benefit Impacted Parties

03.

Tier 1 Supplier increase of diverse Supplier (see Guidance below) capacities by simplifying procurement processes, such as accessibility of documentation, use of supplier diversity portals, allowing longer time frames for response, and adoption of pre-qualification systems to provide procurement opportunities to the broadest range of suppliers.

Contribute to Solutions

04.

Tier 1 Suppliers increase of diverse Supplier capacities by engaging in supplier outreach activities to identify businesses owned by demographically under-represented individuals or groups and provide training or other resources to prepare them to participate in formal procurement processes (e.g., developing and supporting a joint-venture between a smaller, woman-owned business and a larger, national business to develop capacities of the woman-owned business to participate in larger projects).

Indicators

The performance indicator is the percentage of diverse Tier 2 spend on the project. The context indicator is the total number of diverse Tier 2 vendors working on the project.

To calculate the performance indicator:

Determine the total spend across Tier 2 Suppliers working on the project.
Determine the total spend across Tier 2 diverse Suppliers working on the project.
Calculate progress as the percentage of diverse Tier 2 Supplier spend for the project.

This is expressed mathematically as:

(Total diverse Tier 2 spend / total Tier 2 spend) x 100

Scoring

Points assignment

Points	Percentage Tier 2 Diverse Supplier Spend
2 points	3-8% diversity
3 points	9-12% diversity
4 points	13-19% diversity
5 points	20+% diversity
6 points	50+% diversity

The scoring rubric is based on current industry averages for diverse supplier spend^?.

Additional points assignment

Points	Additional Requirements
+1 point	Requirement #3 satisfied
+3 points	Requirement #4 satisfied

Documentation

01.

List of financial, human, and material resources utilized for this activity.
02.

Documentation of targeted recruiting efforts to reach out to underrepresented suppliers. This could include records of communications, advertisements, or invitations to bid.
03.

The RFP invitation list, categorized by underrepresented and non-underrepresented groups, to verify that at least 50% are underrepresented suppliers.
04.

Evidence of a process that removes identifying information from proposals (if applicable), ensuring a merit-based selection. This could be in the form of redacted proposal samples, process guidelines, or software/tool specifications used for blind-bidding.
05.

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.
06.

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.
07.

Evidence of the total spend on Tier 2 suppliers.
08.

Evidence of the total spend on Tier 2 diverse Suppliers.

Guidance

On definition of a diverse Supplier

A diverse business is defined as 51% or more owned, operated, and managed by someone who fits in one or more of following 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)

For non-US or Canadian-headquartered businesses, local regulations and standards apply to the definition and recognition of a diverse Supplier. SEAM requires that businesses categorized 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 requirement #1 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 and supply chain activities⁶⁸:

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, for example accessibility of 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/
Supplier Gateway Supplier Diversity software – Tier 2 tracking and reporting. Available online: https://www.suppliergateway.com/buyers/supplier-diversity/

Referenced Source

ISO 30415:2021, Human resource management – Diversity and inclusion
Universal Declaration of Human Rights (1948)