Suppliers are Certifiable
In the world of procurement, we are very familiar with certifications on the buying side. Such credentials as CPSM (certified professional in supply management), CPPB (certified professional public buyer), and CPPO (certified public procurement officer) are all commonplace. While these designations are important to our profession, so are the certifications of our suppliers. Here are some I think we should be aware of:
DBE – Disadvantaged business enterprises are small businesses that are owned, operated and controlled by socially and economically disadvantaged individuals. Historically, these companies have not played a significant role in the public procurement process.
WBE – Women owned business enterprises are companies that are majority-owned and operated by females. They play an active role in managing the business and are not merely a figure head. They are experienced, qualified, and committed. Women owned small businesses are also referred to as WOSB.
MBE – Minority owned businesses are companies that are majority-owned and operated by an ethnic minority (Hispanic, African American, Native American, etc.). Many suppliers self-identify as minority owned, while others are certified through state and national programs as a MBE.
VOSB – Veteran owned small business are companies owned and operated by a veteran or group of veterans (or for a publicly owned company, a veteran owns the majority of shares). Veteran owned businesses are sometimes categorized as VET businesses.
LGBTBE – The National Gay and Lesbian Chamber of Commerce administers a relatively new certification program for the LGBTQ business community. They verify that businesses are owned and operated by members of the lesbian/gay/bisexual/transgender community. While not all organizations are ready to embrace this certification, it has received tremendous support from the US Small Business Administration.
SBE – Small business enterprises can be certified by federal or state governments. In California, an SBE must have 100 or fewer employees and average $14 million or less in annual gross receipts. They must also be independently owned and operated have principal offices located within the state.
SWAM – This designation stands for small, women and minority owned businesses. It is a collective term used by the Commonwealth of Virginia that signifies their commitment to diverse businesses.
I believe that being familiar with these certifications can allow us to better understand the businesses we work with. It can also serve as a guide when reaching out to our business community. For example, if providing opportunities to local small businesses is important to an organization, then contacting SBE and DBE firms can make sense. In addition to notifying them of competitive bid events, organizations can provide training on how to do business with the government.
Reaching out to small, certified firms is just good business. It can promote competition and goodwill in our communities, and if we are not careful, it can even help us diversify our dollars spent. By that, I mean that the diversity of our spend is comparable to the diversity of our community.
Working to diversify spend is both an art and a science, but it is certainly an effort worth making. In the words of Maya Angelou, “diversity makes for a rich tapestry.”
Darin Matthews, FNIGP, CPPO, CPSM, is the director of procurement for the University of California, Santa Cruz. He has extensive management experience, speaks throughout the world on procurement issues, and has published several books and articles on supply chain management. Contact Matthews at email@example.com.