Supplier Diversity     

Supplier Diversity in Higher Education

Selling products and services to colleges and universities is a big business. In 2018–19, degree-granting postsecondary institutions in the United States spent $632 billion (in current dollars). Total expenses were $401 billion at public institutions, $219 billion at private nonprofit institutions, and $12 billion at private for-profit institutions. Yet, despite the fact that many institutions have made a commitment to supplier diversity, a tiny percentage of contracts are awarded to by minority- and women-owned business enterprises (MWBEs).

What are the Barriers and Opportunities?

Why do small business owners, especially in under-served communities, feel so frustrated by higher education procurement policies? What makes it difficult for them to navigate procurement procedures? What skills and knowledge would enable them to compete more effectively for contracts?

Research on the Perceptions of Diverse Small Business Suppliers

The Northeastern Lab for Inclusive Entrepreneurship (NL4IE) project team has reviewed procurement best practices, interviewed procurement staff at several institutions, and conducted a large survey of diverse small business suppliers.

For colleges and universities committed to promoting supplier diversity, a key starting point is to understand the perceptions of diverse suppliers. How do they view the procurement process? What do they consider barriers and impediments? And, most importantly, what do they think it will take to help them increase their share of higher education contracts for goods and services?

The NL4IE team is preparing a report based on the survey findings and will sponsor a symposium to explore the results and discuss ways (and the resources needed) to promote supplier diversity.

Supplier diversity is a critical way for colleges and universities to promote a more equitable society. By sourcing from a diverse supply chain, they can support the economic vitality of their communities.

Yet, the “supplier gap” remains; diverse small businesses represent a tiny percentage of higher education spend. How can this gap be closed? A research team at the Northeastern Lab for Inclusive Entrepreneurship asked a large sample of diverse small businesses for their opinions.

Download Report: Supplier Diversity in Higher Education 2022 

Promoting Supplier Diversity in Higher Education

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In 2020 out of 700 active contracts awarded by a big college in Massachusetts, only 14 (or 2%) went to minority-owned businesses certified by the state.

A study of 42 higher education institutions and their annual expenditures found that 91% of their spend was with the same 20% of vendors (NAEP, 2013).

A Call to Action

“We will increase procurement from businesses that are designated as women- and minority-owned, with a special emphasis on Black-owned businesses at our U.S. campuses. Our goal over the next five years will be to double the total value of those contracts from the last five years” (Joseph Aoun).

Overview of the Survey

359 Respondents

  • Women-led (66% ) and minority-owned (45%).
  • Certified by MA SDO (77%) and SBA (22%).
  • Main sectors: Scientific and Technical Services, Construction and Marketing.
  • 84% had less than 50 employees.
  • 69% have been in operation for more than 11 years.

Major Perceived Barriers to Doing Business?

  • Why do minority business owners feel so frustrated by Higher Education procurement policies?
  • What makes it difficult for them to navigate procurement procedures?
  • What skills and knowledge would enable them to compete more effectively?

Opportunities to Promote Supplier Diversity

Main Themes

1. Creating a Responsive Single Point of Contact

2. Explaining and Simplifying the RFP Process

3. Shorten Payment Terms

4. Providing Clear Information on How to Navigate a Complex Process

5. Including Small Diverse Businesses in the Vendor Network

6. Expanding Certifications Beyond the Existing Ones

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