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Board of Governors of the Federal Reserve System
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Federal Reserve Board of Governors

Procurement


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Supplier Diversity Policy

Policy Statement

The Board is committed to ensuring, to the maximum extent possible, the fair inclusion and utilization of minority-owned and women-owned vendors in all Board contracts. This policy reflects the Board’s commitment as well as the goals related to diversity and inclusion in business activities expressed in section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. No. 111203, 124 Stat. 1376). It sets forth the guidelines and standards that the Office of Diversity and Inclusion (OD&I) will use to promote consideration of minority-owned and women-owned vendors in the Board’s acquisition process and to ensure, to the maximum extent possible, that the Board’s contractors have a similar commitment toward diversity and inclusion of minorities, women, minority-owned vendors, and women-owned vendors in the contractors’ own workforce and subcontracting activities.

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Definitions

Board’s acquisition process means the process by which the Board purchases goods and/or services pursuant to the “Acquisition Procedures and Payment” section of the Board’s Acquisition policy.

Commercial third party means an individual or business that represents itself as providing goods and/or services in the commercial market. This term does not include Board employees; persons performing work at the Board under detail, secondment, or other similar agreements; other governmental authorities (regardless of whether the Board may exchange funds with such authorities); Reserve Banks; or providers of utility services.

Contract means any written agreement negotiated by the Board, under which the Board, for the exchange of money, obtains goods and/or services from a commercial third party. For purposes of this policy, the term “contract” does not include acquisitions made by Board purchase card or through use of other government agency contracts (e.g., GSA schedule or SEWP purchases) or agreements that establish a leasehold interest.

Contractor or vendor means the commercial third party with which the Board has a contract.

Minority and minority-owned have the meanings set forth in section 21A(r)(4)(A) of the Federal Home Loan Bank Act, 12 USC 1441a(r)(4)(A), as in effect on July 20, 2011.

Women and women-owned have the meanings set forth in section 21A(r)(4)(B) of the Federal Home Loan Bank Act, 12 USC 1441a(r)(4)(B), as in effect on July 20, 2011.

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General Provisions

Outreach and Education

The OD&I will work in conjunction with the Procurement Function’s supplier diversity specialist to promote the participation of minority-owned and women-owned vendors in the Board’s acquisition process. Such coordinated activities include, but are not limited to

  • conducting and/or attending vendor fairs that encourage minority-owned and/or women-owned vendors to participate in the Board’s acquisition process;
  • educating and providing technical support to minority-owned and/or women-owned vendors about the Board’s acquisition process and opportunities for obtaining contracts with the Board;
  • promoting consideration of minority-owned and women-owned vendors in the Board’s acquisition process, including educating relevant Board staff about the importance of having a diverse contractor community and conducting market research and outreach to increase the pool of potential offerors to include minority-owned and women-owned vendors;
  • reviewing bidders’ lists for selected procurements and providing input on how such lists could be augmented to include qualified minority-owned and/or women-owned vendors;
  • reviewing selected Statements of Work and providing input on how the scope or substance of the work described therein could be revised to encourage participation of minority-owned and/or women-owned vendors in the Board’s acquisition process; and
  • making recommendations to the chief acquisition officer about how to increase contracting opportunities for minority-owned and women-owned vendors.

Contractor Commitment to Diversity and Inclusion

All Board contracts will contain a written statement by the vendor confirming its commitment to equal opportunity in employment and contracting and the fair inclusion of minorities and women in its workforce. Board contracts whose annual value is expected to exceed $100,000 will contain a written statement whereby the contractor confirms its commitment to equal opportunity in employment and contracting and the fair inclusion of minorities and women in its workforce, agrees to provide documentation of the good faith effort it has made in support of this commitment, and agrees to include the Board’s model language in major subcontracts.

Consistent with section 342 of the Dodd-Frank Act, the OD&I, in consultation with the Board’s Procurement Function (Procurement) and the Legal Division (Legal), has adopted a model written statement (model statement) regarding these matters to be included in purchase orders and contracts. Nonsubstantive variations of the model statement, and substantive changes to the model language that are requested by a prospective contractor that has fewer than 50 employees, may be negotiated without further review or consultation from the OD&I. All other substantive changes proposed by a subject contractor must be reviewed by the OD&I in consultation with Legal and Procurement prior to contract award. In cases where substantive revisions to the model language are permitted, the OD&I will document the reasons for the authorization.

Acquisitions must not be intentionally or artificially divided to avoid inclusion of the model statement in the contract. In the event that a contract does not initially meet the threshold for inclusion of the model statement, but is later amended to exceed $100,000 annually, the maximum possible effort will be made to include the model statement upon or after such amendment. If, for legitimate business reasons, a vendor holds several contracts with the Board that do not individually exceed $100,000 annually, but that do so when taken in the aggregate, the OD&I will request the contractor’s affirmation of the substance of the model statement.

Good Faith Review of Subject Contractors

The OD&I, with input from Procurement and Legal, may review the activities of any contractor that holds a Board contract whose annual value exceeds $100,000 (a subject contractor) to determine whether the subject contractor has made a good faith effort to include minorities and women in its workforce, and in the selection and workforce of its subcontractors, as applicable. To facilitate such good faith review, all subject contractors may be required to submit certain information concerning their outreach efforts, diversity policies, and subcontracting activities.

In making its determination of good faith efforts, the OD&I will review the contractor’s activities and information as they relate to the following:

  • a commitment from the contractor’s leadership to diversity in the workforce and, where applicable, the workforce(s) of its subcontractor(s)
  • integration of diversity/equal employment opportunity methodologies into the contractor’s business strategy
  • outreach and recruitment activities that promote diversity and inclusion
  • policies, practices, and procedures that ensure fair and equitable treatment in hiring, promotion, career development, and resolution of workplace disputes
  • the contractor’s self-described efforts to include, to the maximum extent possible, minority-owned and women-owned businesses in its subcontracting

The OD&I may engage in periodic review of a subject contractor’s good faith efforts; however, unless the OD&I has made a determination that good faith efforts are lacking, a subject contractor ordinarily will not be subject to more than one review per year.

Program Director’s Determination of Lack of Good Faith Efforts

If upon review of the subject contractor’s activities and information, the program director of the OD&I, with input from Procurement and Legal, concludes that the subject contractor has not made a good faith effort to include minorities and women in its workforce and/or in its subcontracting activities, or if the subject contractor does not provide the requested information or otherwise fails to cooperate with the OD&I’s review of the subject contractor’s good faith efforts, the program director of the OD&I may take one or more of the following actions:

  • obtain the subject contractor’s cooperation in implementing a plan to remediate the deficiencies in its good faith efforts
  • make a recommendation to the Board’s chief operating officer that the contract be terminated for default or that the Board exercise any other rights available under the contract to remedy the contractor’s material breach
  • take any other appropriate action consistent with applicable law

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References

Acquisition Policy

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Responsibility

The Division of Financial Management and the Office of Diversity and Inclusion jointly administer and interpret this policy and will review and update it as necessary.

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Last update: May 30, 2014