Diversity’s Third Leg: Higher Education’s Approach to Supplier Diversity

Higher education procurement professionals at the University of Illinois’ Annual Professional Services Diversity Symposium in April 2017

As the U.S. population has become increasingly diverse, so has the business community, with more women, minorities, veterans, and people with disabilities launching companies than ever before. Collectively, these organizations contribute trillions of dollars in revenue to the U.S. economy, employ millions, and represent a huge opportunity for companies seeking diverse vendors.

[Above: Higher education procurement professionals at the University of Illinois’ Annual Professional Services Diversity Symposium in April 2017]

Historically, corporate America has made supplier diversity a high priority, heavily investing in efforts to increase opportunities for diverse businesses. But what about higher education — specifically public institutions? When it comes to diversity and inclusion, colleges and universities have largely focused on the diversification of students and faculty, but how much of an emphasis do they place on the inclusion of minority-, women-, veteran-, LGBTQ-, and disability-owned businesses?

Doreen Murner

“Universities have diversity of faculty, staff, and students, and that’s where they focus most of their attention, but the third leg is supplier diversity,” says Doreen Murner, CEO of the National Association of Educational Procurement (NAEP). “I think the three legs of the stool are starting to come together.”

With more than 1,000 members representing colleges and universities across the U.S., NAEP works to facilitate ethical procurement policies and practices within higher education through networking, advocacy, and continuing education. Although the organization hosts a bi-annual Supplier Diversity Institute — where procurement professionals in higher education learn how to develop, grow, and sustain supplier diversity programs — NAEP is largely a newcomer to the conversation about supplier diversity. However, Murner and her colleagues are working to build their knowledge in this area and call others’ attention to it as well.

“Ours right now is an awareness program. We’re trying to get people to be aware that there is this other place where diversity [is important], and it’s in their supplier base,” says Murner. “Universities should be aware of this because it affects the communities where [they are] located.”

Murner says that while some colleges and universities’ supplier diversity efforts are better than others, most understand the importance of establishing relationships and doing business with diverse companies. The goal, however, is “to get supplier diversity embedded in the university community to where it’s no longer even a discussion, it’s just done,” she says.

“If your student and faculty populations are diverse because of initiatives to increase opportunities on campus, it only makes sense that the vendors that supply goods and services to the university would be a fair representation of that same effort,” says Murner.

Over the next few years, she says the NAEP will be working to strengthen its focus on supplier diversity in higher education by analyzing research and gathering input and best practices from its members, some of whom — like Purdue University and the University of Illinois (U of I) System — already have well-established programs.

Overcoming Barriers for Small Businesses
At Purdue, Jesse Moore has found that the best way to attract diverse suppliers is to take a race- and gender-neutral approach to outreach. With no numerical goals in place, Moore, who serves as director of supplier diversity, focuses on ensuring that diverse businesses are aware of the opportunities available to them at Purdue and on identifying and assisting small businesses with overcoming barriers.

“What we try to do is mitigate or eliminate, where possible, the obstacles in processes, procedures, and policies that [keep] small businesses — not just minority-owned businesses — from being successful at Purdue,” he says. “If we remove the obstacles that keep [all] small businesses from being successful, then we automatically increase the probability that diverse businesses will also be successful.”

Because of Purdue’s rural location, Moore travels to communities across Indiana, participating in activities to connect with minority-, women-, veteran-, LGBTQ-, and disability-owned businesses and provide them information about opportunities at the university. From there, the Office of Supplier Diversity works to ensure their success. One way it does so is by allowing them to submit pre-construction bids.

“Before pre-bid conferences are held with potential construction managers, we have a meeting where we only invite women- and minority-owned businesses,” says Moore. “We go over the aspects of the project and prepare those businesses for the pre-bid with the larger firms so they have a good deal of information and can speak appropriately to the job.”

Beyond directly signing contracts with diverse small businesses, Purdue now requires larger suppliers to make a “good-faith effort” to use such companies as well. Stopping short of setting specific goals, Moore’s office charges winning bidders with developing their own benchmarks. “That plan is then incorporated into the contract and becomes a contractual obligation,” Moore says. “On top of that, they are required to report on a monthly basis what their actual spend with [those] businesses is.”

To help connect small businesses with decision-makers on campus, as well as with larger businesses, Purdue hosts its Relationships to Partnerships Sessions every November. “Not only do they … meet with decision-makers from Purdue,” Moore says, “they also meet with [those] from Caterpillar, State Farm Insurance, Subaru Isuzu, and more. Last November, I think we had about 170 businesses take advantage of that.”

Purdue’s gender- and race-neutral approach to supplier diversity means it looks for the same qualities in every vendor that submits a bid, whether they’re diverse or not, Moore says. “We look for someone who can do the job. We look for somebody with a track record in that area,” he says, adding that the days of awarding contracts “based on gender or race are over.”

Although the state of Indiana doesn’t require public colleges and universities to meet specific goals in terms of the number of diverse suppliers they use, Purdue must submit a report to the state each year listing all the businesses it awarded contracts to. According to Moore, last year’s report showed that the university had done over 12 percent of its business with minority-, women-, and veteran-owned organizations, which he thinks is impressive considering its use of gender- and race-neutral criteria.

For its work, Purdue’s Supplier Diversity Program has been recognized with several awards over the years — as has Moore for his success leading the program. He believes that supplier diversity is more important now than ever due to the increasing diversity of the nation. “I think Purdue, like so many other organizations, understands the changing demographics of the country,” he says. “The minority population is growing, and with that growth comes spending power.”

Tailored Goals
Like Purdue, the U of I System — with campuses in Urbana-Champaign, Chicago, and Springfield — has made supplier diversity a high priority with hopes of having a positive impact on the local community.

With a goal set down by the state for public institutions to have 20 percent of their “spend” done with minority-, women-, veteran-, LGBTQ-, or disability-owned businesses, U of I establishes diversity goals on a contract-per-contract basis, says Sharla Roberts, director of procurement diversity. “We review every solicitation to ensure that a diversity goal is established based upon the availability of [businesses owned by] minorities, women, persons with disabilities, and veterans,” she says. “[It’s] based on who’s available and … on the demographics of the surrounding community.”

Sharla Roberts (left) with other procurement professionals at U of I’s Annual Professional Services Diversity Symposium in April 2017

In addition, individual campus’s goals may vary based on their location. The Chicago campus, for instance, has a 30 percent aspirational goal for construction spending, while the other, more rural campuses aim for 20 percent. Other policies and procedures are in place to govern purchasing at all campuses.

“For small purchases, we encourage departments to get a quote from minority- and women-owned firms,” Roberts says. “We also do a lot of outreach to our internal departments to create awareness. We have an annual outreach event where we invite our units to meet women- and minority-owned firms to build relationships.”

Roberts believes that using diverse businesses and educating the campus community on the importance and benefits of doing so is imperative. These organizations, she says, offer unique advantages.

“They bring a diverse mindset and can provide cost savings,” says Roberts. “Because they’re smaller, they provide quality customer service, are attentive, and tend to be more flexible to meet their customers’ needs.”

As a service to these companies, U of I coaches business owners to make sure they have all the tools they need to be successful, teaching them how to submit a proper bid, develop accurate capability statements, and complete the certification process. Roberts’ office then nominates many of these businesses to participate in the Chicago Anchors for a Strong Economy (CASE) initiative to connect them with other higher education institutions seeking goods and services. Created by the nonprofit organization World Business Chicago, CASE fosters partnerships between anchor institutions like the University of Illinois at Chicago and local small businesses to improve the region’s economy.

For the Good of the Community
According to Moore, the success of a supplier diversity program is dependent on two factors: a commitment from leadership and the allocation of resources. He also believes there should be a full-time person who reports directly to the university president, dedicated to this work.

“It has to start with a visible commitment from the top. If you don’t have that, all you have is a lot of words and a program that was put in place just to check a box and not really have impact,” says Moore. “[Purdue President Mitch Daniels] is the former governor of the state of Indiana, so he understands supplier diversity.”

Like former Purdue President Martin Jischke, who appointed him, Moore believes that universities’ “moral imperative” to prepare students for a multicultural society is accompanied by a need for schools to practice what they preach. “Young people need to see that [faculty, staff, and administrators] are fully functioning in a multicultural environment, too,” he says. Moore also believes there may be a relationship between supplier diversity and other diversity programs and the amount of money diverse graduates give back to their alma maters.

For Murner at the NAEP, a successful supplier diversity program is one that is adapted to its institution and surrounding community.

“Every university is different, so where Purdue has [done] 12 percent [of its business with diverse companies] and that might be phenomenal, for another university, that might not even be worth discussing, and it has a lot more work to do,” Murner says. “Every single institution has different policies and responsibilities, and [public colleges] must report back to their state legislatures.”

She believes colleges and universities are aware of the impact well-executed supplier diversity programs can have and are investing in them to promote the success and vitality of the communities of which they are a part more than to help themselves.

“They want to graduate students who will go back into the community and create businesses, who become active alumni, who will have children who come back to the university,” she says. “There is a significant investment and desire to be very closely tied to what’s going on in the region.”●

Alexandra Vollman is the editor of INSIGHT Into Diversity.