Supplier Diversity KPI's: A Place To Start

posted: > 10 days ago
Source: Charles' Purchasing Certification Blog

The United States Small Business Administration has recently announced a new scorecard system to evaluate federal government agencies' performance in terms of adhering to their supplier diversity goals. According to fiercegovernmentit.com, the new system will grade each agency's small business procurement program as follows: an A+ for agencies that meet or exceed 120 percent of their goals, an A for those between 100 percent and 119 percent, a B for 90 to 99 percent, a C for 80 to 89 percent, a D for 70 to 79 percent and an F for less than 70 percent.

Though the 'SBA negotiates individual goals for each agency,' it works towards these aggregate goals for the entire federal government: 23 percent of total qualified contract dollars going to small businesses, with 'additional goals of 5 percent for small disadvantaged businesses, 5 percent for women-owned businesses, 3 percent for HUBZone small businesses, and 3 percent for service-disabled veteran-owned small businesses.'

If you're looking to start a supplier diversity program, these key performance indicators may be a good place to start. However, the government has more of a vested interest in the success of small businesses than a for-profit company, so the actual percentages for a for-profit company are likely to be revised way down.

In addition, a local government may wish to supplement the aforementioned classifications with a classification for local businesses. In such a case, the percentages for the other classifications would likely need to be revised downward.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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