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Board of Governors of the Federal Reserve System
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Report to the Congress on the Office of Minority and Women Inclusion

Inclusion of Minority-Owned and Women-Owned Businesses

The Procurement Section of the Board's Management Division, working with the ODI, is responsible for implementing section 342 of the Dodd-Frank Act in connection with developing standards and procedures to ensure, to the extent possible, the fair inclusion and utilization of minority- and women-owned businesses in the Board's procurement process. The ODI and the Procurement Section meet on a regular basis to assess the results of the supplier diversity objectives and activities and to determine whether additional efforts would be helpful in assisting minority- and women-owned businesses to compete successfully in the Board's acquisition process.

Currently, the Board continues to operate under its small disadvantaged business acquisition policy, which existed prior to the enactment of the Dodd-Frank Act. That policy helps to ensure that small and socially and economically disadvantaged businesses have an equitable opportunity to compete in the Board's procurement activities. To further enhance the Board's Small and Disadvantaged Business Development Program and to support the ODI's goals and objectives, the Procurement Section is in the process of implementing a supplier diversity program. Under the program, as required by section 342, the Board's general contract provisions will include standard language that requires contractors to confirm their commitment to ensuring the fair inclusion of women and minorities in employment and contracting. In addition, during the solicitation phase, the program will allow prospective vendors to submit a subcontracting plan with their proposal. With the adoption of the supplier diversity policy, the Board is confident that its vendor selection processes will encourage and support the participation of minority- and women-owned businesses.  

Access Initiatives

In 2011, a supplier diversity specialist was hired to develop a comprehensive program strategy, including meetings with prospective suppliers to pre-qualify them and offer technical assistance as needed. By dedicating a full-time staff person to this effort, the Board expects to increase the participation and identification of diverse suppliers in the Board's acquisition process. Procurement staff and the supplier diversity specialist plan to host workshops and other technical assistance activities to assist vendors with the fundamentals of doing business with the Board.

The Board is also working to develop a website that will enable companies to register, identify their business type, and include information regarding their products and services.  

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Outreach Activities

The Board continues its outreach activities to attract a diverse pool of vendors by holding events to provide vendors an opportunity to meet with procurement staff and the technical end users. These vendor fairs have been well received by the vendors that attend as well as the internal-Board customers that meet one-on-one with potential suppliers. Giving the internal-Board customer an opportunity to meet with potential suppliers prior to starting the solicitation process provides the customer an opportunity to speak with the vendors about their qualifications. The Board plans to hold additional events, including workshops and forums for vendors on how to do business with the Board and how to access small business opportunities.

The Board's external strategies to increase contracting opportunities for minority- and women-owned firms focus on developing partnerships with advocacy groups representing minority- and women-owned businesses and organizational memberships. The Board is a member of the Maryland/District of Columbia Minority Supplier Development Council. As a member, the Board uses the Council's vendor database to find qualified suppliers to invite to outreach activities and to include in the bidding process for contracts with the Board. The Board is also applying for membership in the Women's Business Enterprise National Council, which hosts networking events focused on supplier diversity. In addition, the Board has met with advocacy groups, such as the Greenlining Institute, to discuss the inclusion of minority businesses in products and services contracts.

The Board also attends external vendor outreach events, such as the annual procurement conference sponsored by the Office of Small Disadvantaged Business Utilization in Washington, D.C., local and national conferences of the Minority Supplier Development Council, and the national conference of the Women's Business Enterprise National Council. In 2012, the Board plans to participate in a number of trade shows, such as the Minority Enterprise Development Week, D.C. Small Business Expo, the National Association of Women Business Owners, the U.S. Chamber of Commerce Business Summit, the U.S. Pan American Expo, the New York Small Business Expo, and the trade show held in conjunction with the Congressional Black Caucus annual conference.  

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As mentioned earlier in the report, the Procurement Section hired a supplier diversity specialist to enhance outreach activities and to focus the Board's efforts toward increasing the number of minority- and women-owned businesses involved in the Board's procurement process. 

A separate budget was approved for the supplier diversity program to ensure that the program is adequately funded. As a result, the Board has tripled the number of outreach activities planned for 2012. During 2011, the Board participated in several local and national events designed to identify and educate minority- and women-owned businesses about contracting opportunities at the Board. In addition, the Board hosted its annual vendor fair, which provided the opportunity for minority- and women-owned businesses to meet with procurement staff and end users. These activities resulted in a more diverse pool of qualified minority- and women-owned businesses in the bid process.

Over the past five years, the Board has increased the amount of contracting dollars spent with minority- and women-owned businesses from $8,376,750 in 2007 to $15,414,147 in 2011, representing an increase of 84 percent.

In order to improve the accuracy of information on vendors in our procurement database, we contacted vendors to revalidate their classification and status. More than 90 percent of the vendors responded. This effort will enhance our ability to track and produce accurate reports.

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As an initial hurdle, the Board's total procurement expenditure is small relative to other federal agencies, and the specific mission of our agency dictates the type of products and services purchased. In particular, the Board spends a significant amount of its overall contracting dollars on purchases of economic data, which are generally not available from minority- or women-owned firms. 

A further barrier to competition by minority- and women-owned businesses is the fact that many of these companies have never conducted business with the federal government and have expressed concern that the documentation requirements are an undue burden. The outreach and technical assistance programs described earlier are designed to assist minority- and women-owned businesses in addressing this concern.

In addition, to ensure further participation of minority- and women-owned businesses, it is important to identify ways to foster networking opportunities between prime contractors and minority- and women-owned firms interested in subcontracting opportunities.

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Contracts with Minority-Owned and Women-Owned Businesses

The Board tracks the diversity of a company by its business size (small or large) and by its ownership classification (such as minority-owned or women-owned). The Board is more likely to receive a more diverse pool of vendor applications in some areas than others. For example, the Board has encountered a number of diverse vendors in the areas of temporary staffing, IT staffing, IT consulting, and office supplies and furnishings. Conversely, the Board does not receive a diverse pool of vendor applications from firms that provide economic and statistical data.  

During 2011, the Board's procurement contracts for goods and services totaled $125,070,569. Of this total, $15,414,147, or 12.3 percent, was awarded to minority-owned or women-owned businesses. Specific awards by contractor classification are as follows

  • minority-owned businesses (excludes women-owned businesses) = $9,028,526 (7.2 percent of total);
  • women-owned businesses (excludes minority women) = $4,237,038 (3.4 percent of total); and
  • minority women-owned businesses = $2,148,583 (1.7 percent of total).

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Last update: August 2, 2013