“I am committed to working with a Black, woman owned company. I have already decided we want to work with you!”
These were words shared by a prospective client during an introductory call to discuss a potential partnership. I was thrilled. I had not heard any company be so bold and transparent, proclaiming their intent to work only with a Black, woman-owned firm as a part of their goal to be an antiracist organization. More organizations are recognizing that firms owned by BIPOC (Black, Indigenous, People of Color) are more often undercapitalized and underutilized due to systemic racism.
Operationalizing justice in the procurement process warrants attention. There are “rules” that create undue barriers for BIPOC companies. What does it mean to create justice-centered policies and processes that address past barriers for BIPOC companies?
Supplier diversity is not a new approach to ensuring fairness in awarding business to BIPOC- and women-owned businesses. As a matter of fact, many large companies set aggressive goals (e.g. 10% of total spend) to seek out and source from such businesses. Operationalizing justice requires moving beyond the check the box performative exercise of meeting spend goals and quotas. When is the last time you examined your procurement policies and practices to ensure that they work for everyone? When did you last ask, who are we harming by these requirements? Who do they benefit? Procurement departments often devise policies and practices only with a lens of how it benefits the institution without consideration of the potential detrimental impact on the supplier partner.
Operationalizing justice requires moving beyond the check the box performative exercise of meeting spend goals and quotas. Share on XAs Chief Operating Officer of The Winters Group, I manage the team responsible for client engagement which includes responding to Requests for Proposal (RFPs) and contract negotiations once we are the selected partner. My team is responsible for the entire onboarding process of new clients, starting with the initial prospective client call (or receipt of an RFP), to formulating proposals, to reading through (and often redlining) master service agreements, and getting to a signed firm agreement.
I want to share in this post some examples of barriers and harm some current practices cause firms such as ours. I hope to encourage leaders to examine existing policies and practices with a justice centered lens with the intent of changing those that continue to present barriers and cause harm.
RFP Process
Formal RFPs are often written to benefit the requesting organization. I understand that a standard RFP process is more convenient, but it often does not take into consideration the potential supplier. Many times, the turnaround time is unrealistic with deadlines for submission within a week or two of receipt. The timeline imposed is convenient for the requestor, but suppliers may not have the capacity to respond within that short window. The timeline often includes in-person or virtual interviews with pre-set dates and times. These restrictions have left us scrambling to rearrange schedules, or sometimes, unfortunately, declining the interview and removing ourselves from consideration because the date and time the requestor has set do not work, and there is often no flexibility on their end.
While many requestors allow submission of questions to gain clarity on the proposal, I find it more beneficial to be able to have a conversation with the organization to fully understand their desired outcomes. Often the information included in the RFP is minimal and left for interpretation. Even before issuing a final RFP, consider discussing the elements of the engagement with the finalists for a more equity-centered design. In other words, rather than “telling” us what you want, engage in a partnership model earlier in the process and pay the supplier for their time during this stage.
Consider the amount of time you are requesting to meet with potential suppliers prior to selection. It is not unusual to meet 3-4 times with various stakeholders prior to having a formal contract in place. During these conversations we are sharing our thought leadership, usually without compensation. This is unjust.
Consider the amount of time you are requesting to meet w/ potential suppliers prior to selection. During these conversations we are sharing our thought leadership, usually without compensation. This is unjust. Share on X
“Do You Have the Capacity?”
This is a common question. Large companies may have assumptions and biases about the ability of small BIPOC businesses to serve them well. Big companies have a tendency to select “big,” mainstream and white-led consulting companies for their DEI solutions rather than boutique firms, such as The Winters Group, citing capacity concerns. Small does not translate into incapable or inferior. Think about how you and your leadership can support smaller firms to ensure they are successful throughout the engagement. Remove barriers and roadblocks that are in place due to policies and biases. Do not place unrealistic expectations on suppliers. Also, consider some of the benefits that come with working with smaller firms that you may not enjoy with their larger competitor, such as a more customized and personal approach.
Big companies have a tendency to select 'big,' mainstream, white-led consulting companies for their DEI solutions rather than boutique firms, citing capacity concerns. Small does not translate into incapable or inferior. Share on XDo not conflate capacity with convenience. As an example, one of our clients regularly says, “We do not do it that way here,” or “This is the software that we use, and we expect it in this format because it is easier for us when we don’t have to edit what you submit.” Who does such inflexibility benefit, and who is potentially harmed?
Payment Terms
The Winters Group standard payment term is NET 30 days. However more and more of our clients are extending their payment policies to 45, 60, 90 or even 120 days with no negotiation allowed. Who do these terms benefit? Who do they harm? BIPOC-owned suppliers may not have access to lines of credit because of historic discrimination in access to capital and waiting 120 days to be paid could literally put smaller firms out of business.
More of our clients are extending payment policies to 45, 60, 90, 120 days w/ no negotiation. Who do these terms benefit? Who do they harm? Share on X
BIPOC-owned suppliers may not have access to lines of credit because of historic discrimination in access to capital and waiting 120 days to be paid could literally put smaller firms out of business. Share on X
An example of a justice- and equity-centered approach is Facebook’s new “Receivables Financing Program.” Facebook launched the program this year and stated that it “gives our diverse suppliers exclusive access to affordable cash flow through their unpaid invoices. Instead of waiting 60 or 90 days for your customers to pay, you can sell those invoices to Facebook for immediate payment.” Who benefits? Both Facebook and the supplier benefit, as Facebook does charge a nominal .5% interest. Who is harmed? No one. While this is pretty innovative and very justice-centered, it would not be needed if large companies would set more reasonable payment terms, and be more flexible with small businesses that need to be paid promptly (e.g., net 10 days).
Intellectual Property/Work for Hire
Maintaining ownership of one’s intellectual property and copyrights are important. One of our solutions is education. We develop content that is customized to our client, and this content contains our existing IP.
When reviewing agreements from organizations, one of the areas I flag the most is related to “intellectual property” and “work for hire” language. Organizations want to benefit most from their partnerships, so there is often language that states the vendor assigns all rights and title to all intellectual property. We usually can redline this clause and negotiate such terms out of the agreement replacing it with language that protects our intellectual property… and I wonder, why do organizations make the supplier go through this? It takes time as it often requires several rounds of conversations and even consultations with our lawyer to agree on terms. It can become costly. A justice-centered approach would be to eliminate such language and not attempt to take ownership of others’ intellectual property, especially without paying for it in perpetuity.
Third Party Risk Assessments
With the increase in cyber security threats, many of our clients have become stricter when it comes to IT and risk compliance. Organizations may require vendors to complete a risk assessment questionnaire as part of the onboarding process. We have received some with over 300 questions. Not only is it time consuming to complete, but they also often contain jargon that a layperson may not understand. These questionnaires, created by large organizations IT/risk teams, are written from the lens of a large organization – not considering a small supplier. Many of the questions are not even applicable to the work to be done. Smaller BIPOC vendors may not have an actual IT department to support in responding to such requirements. Consider creating risk assessments based on the type of work to be performed or omitting questions that are not applicable to the vendor type or work. It benefits the organization requesting our services to be able to issue a “one size fits all” questionnaire and harms smaller organizations for whom many of the requirements are NA (not applicable). Also, consider providing IT support to smaller supplier companies to ensure that they are in compliance. This might even include purchasing the needed software and training the staff.
Smaller BIPOC vendors may not have an IT dept. Consider creating risk assessments based on the type of work to be performed or omitting questions that are not applicable to the vendor type or work. Share on X
Flexibility
Within the last month we had two vendors that sent us contracting agreements. One sent the agreement and indicated “note this document is non-negotiable,” while another stated “we will not be able to accept any redlines to this document.” In both instances, there were issues we had with various sections of the agreement, including payment terms, intellectual property rights and insurance requirements. Such lack of flexibility obviously benefits the organization and can harm the supplier. Develop policies that recognize one size does not fit all.
Flexibility obviously benefits the organization and can harm the supplier. Develop policies that recognize one size does not fit all. Share on XThe “that’s just how we do things here” and “one size fits all” approaches must go. Remove barriers that could be harming and limiting the success of BIPOC suppliers. Continually ask yourself: Does this benefit only us? Does this harm who we seek to work with? Conduct listening sessions with your suppliers to better understand the barriers. Be intentional in removing them and correcting past harm.
The 'that’s just how we do things here' and 'one size fits all' approaches must go. Share on X
