The Supplier Diversity Program (SDP) was established to promote supplier diversity in public contracting. The program encourages the award of state contracts in a way that strengthens and increases business opportunities for Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs), and Service-Disabled Veteran Business Enterprises (SDVOBEs). In 2015, the SDP was expanded to include Veteran Business Enterprises (VBEs), Lesbian, Gay, Bisexual, and Transgender Business Enterprises (LGBTBEs); and Disability-Owned Business Enterprises (DOBEs).
What you need to know
The Massachusetts Supplier Diversity Office (SDO), working with the Governor’s Office of Access, Opportunity, and Community Affairs, sets spending goals for Executive Departments, also called benchmarks, for purchasing from minority-, women-, and veteran-owned businesses. While spending goals have not yet been established for DOBE- and LGBTBE-owned firms, state agencies are encouraged to include them in their purchasing efforts. Only those businesses certified by the SDO or SDO-recognized third-party certification organizations qualify for the program.
How does the SDP work?
Throughout the year, each state agency undertakes a range of efforts to meet the benchmark spending goals through direct and indirect spending. These terms are explained below.
- Direct spending is when state agencies purchase goods and services directly from diverse businesses.
- While diverse businesses do not receive special treatment in the bidding process, if awarded a contract, their certification serves as a marketing tool.
- Indirect spending means that businesses awarded large contracts (also called prime contractors or prime vendors) for goods and services are required to make measurable financial commitments to do business with one or more diverse businesses (often called SDP Partners). This requirement applies to all goods and services contracts expected to exceed $150,000 in total spending.
- Prime contractor commitments are based on a percentage of sales earned from the state contract. Prime contractors also are required to report that spend at set times during a fiscal year.
There are special rules for Purchase of Service (POS) providers, which are introduced in the next section.
How does the SDP work for Purchase of Services Providers (POS)?
The POS Provider is required to maintain a business partnership with an MBE, WBE, VBE, DOBE or LGBTBE business certified by the SDO or an SDO-recognized third-party organization. However, the financial commitment to SDP partners is a fixed dollar amount, instead of a percentage of sales. Further, there are specific reporting forms that must be used by POS Providers.
Which businesses are eligible to serve as SDP Partners?
Businesses appearing on the following lists are eligible to serve as SDP Partners:
- MBEs, WBEs, VBEs, SDVOBEs, DOBEs and LGBTBEs as well as Minority and Women Nonprofit Organizations (M/NPO and W/NPO) certified or recognized by the Operational Services Division’s Supplier Diversity Office
- Additional LGBTBEs located in New England and New York recognized by the Operational Services Division’s Supplier Diversity Office
- Veteran and Service-Disabled Veteran-Owned Small Businesses certified by the VetBiz/U.S. Department of Veterans Affairs Office of Small and Disadvantaged Business Utilization (OSDBU)
Program Resources for Departments
- Access Supplier Diversity Program Forms
- Register to Receive Departmental SDP/SBPP Reports from the Supplier Diversity Office
- Review Object Codes for Calculating Discretionary Spending for FY2020
Best Practices for Departments
- Use more certified contractors in your purchasing. When choosing contractors, increase the use of certified diverse and registered small businesses in a manner consistent with policy/contract requirements (e.g. if a contract requires three quotes, include certified contractors in RFQ distribution).
- Download the Contractor Certification Status Report to find diverse and small businesses on statewide and departmental Master Agreements.
- Request a custom Vendor Utilization Report for your department to compare currently utilized contractors with available diverse and small contractors on the same statewide or departmental contract. To request the report please contact the SDP Help Desk at firstname.lastname@example.org.
- Encourage current contractors to get certified. Encourage your departmental contractors to consider diversity certification and small business verification in COMMBUYS.
- Refer your contractors to the online Certification Self-Assessment, which will help them find out if they qualify for any of the SDO’s programs, suggest next steps, and put them in touch with the SDO.
- Refer your contractors to the COMMBUYS job aid on How to Complete or Renew SBPP Registration: Guidance for Seller Administrators.
- Consistently collect SDP spending data from departmental contractors. Once collected, provide SDP spending information to the SDO to receive credit toward meeting your department’s benchmarks.
- Help contractors create successful SDP relationships with certified vendors. Clearly communicate to bidders and contractors that SDP plans and spending reports are valuable to your department. Refer bidders and contractors to SDO resources.
- Refer your contractors to training webcasts Supplier Diversity Program Overview: Bidders, Contractors, and Certified Businesses and Supplier Diversity Program Policy and Form for Purchase of Service (POS) Providers.
- Refer contractors to the SDP Help Desk at email@example.com for assistance in locating SDP partners.
- Promote upcoming procurements to certified businesses: Work with SDO to notify diverse and small businesses of upcoming procurements.
Program Resources for Bidders and Contractors
- Online Certification Self-Assessment helps vendors determine if they qualify for any of the SDO’s programs, suggests next steps, and puts them in touch with the SDO.
- Directory of Certified Businesses provides bidders and contractors with a list of businesses available for SDP partnerships.
- How to Complete or Renew SBPP Registration: Guidance for Seller Administrators (COMMBUYS Job Aid) helps vendors obtain Small Business Purchasing Program verification or renew their existing status.
- Supplier Diversity Program Overview: Bidders, Contractors, and Certified Businesses (webcast) provides information on the SDP for all audiences.
- Supplier Diversity Program Policy and Form for Purchase of Service (POS) Providers (webcast) provides information on the SDP as it applies to health and human service contractors (also known as Purchase of Service (POS) contractors).
- SDP Help Desk at firstname.lastname@example.org helps bidders and contractors identify new SDP partners and answers general questions about the program.