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Stephanie Sherwood is the supplier diversity program manager for Weston Solutions, based in West Chester, Pennsylvania. The opinions are the author’s own.
As the construction industry continues to evolve and grow nationally and internationally, savvy companies are looking for innovative ways to gain competitive advantage and drive growth. Particularly for publicly funded projects, construction companies are tasked with offering their clients the best value, while supporting local communities and the workforce.
Focusing on supplier diversity helps to do this. In practice, more local, small and underrepresented subcontractors and suppliers expands a company’s supply chain. This has real business benefits in creating other buying options that go beyond traditional channels.
With more than three decades of experience in government contracting and socioeconomic programs, I’ve found that strong supplier diversity programs have proven to be big winners in four key ways: they maximize opportunities, increase your ability to pivot on the fly, are socially and economically. responsible and increase employee morale.
Maximize opportunities
Supplier diversity is a smart business tactic for construction companies seeking government contracts. Federal, state, and local governments have established programs and policies to promote the use of businesses owned by underrepresented groups, including socially and economically disadvantaged people, women, minorities, veterans, and people with disabilities.
Stephanie Sherwood
Courtesy of Weston Solutions
Construction companies that demonstrate a commitment to maximizing supplier diversity on the projects they execute not only meet government initiatives, but increase their chances of securing lucrative government contracts and follow-on projects.
For example, the US Department of Defense requires all large commercial contractors to reserve a minimum level of their prime subcontracting for small and diverse companies when bidding on prime contracts. These commitments to use multiple small companies are evaluated by DOD and are often considered more significant than the offeror’s price to carry out the project. If your commitment and approach to supplier diversity is not assessed favorably, your proposal may be deemed unacceptable or inconsistent with government expectations.
Many government programs provide support and resources to help companies develop and implement effective supplier diversity programs. The US Small Business Administration, as well as many commercial, state and local entities, maintain resource partners that provide market research, outreach and other development assistance to maximize supplier diversity.
Embracing and fostering supplier diversity is a strategic approach that delivers significant economic and social benefits, while aligning with important government initiatives that fuel our nation’s infrastructure and long-term stability.
Increased turning capacity
Various subcontractors and suppliers are known for their agility and adaptability. Many niche suppliers can react quickly to market changes and business fluctuations, providing construction companies with enhanced flexibility and resilience. This agility can be particularly beneficial in an industry where projects often face unexpected challenges and changes, especially as government budgets are allocated and client priorities evolve.
By collaborating with small and medium-sized businesses, you can quickly adapt to these situations, minimize delays, offer creative solutions and keep projects on track. This translates directly into project success, while maintaining commitments to follow through on customer-driven initiatives.
Be financially and socially responsible
Imagine the impact your construction company can have by reaching beyond your usual partners and supplier network.
By partnering with diverse subcontractors and suppliers, construction companies stimulate economic growth in underrepresented communities and ultimately strengthen and support the stability of the global economy.
Additionally, these diverse companies often offer competitive pricing, industry expertise, and innovative solutions that can streamline your projects, which can lead to accelerated delivery schedules and cost savings. Supplier diversity fosters teamwork and collaboration, which in turn can even unlock new markets and customer segments, driving your company’s revenue growth.
In addition, supplier diversity can level the playing field, ensure regulatory compliance, and protect your company from potential legal issues related to discrimination and unfair business practices.
Increases employee morale
As someone who has implemented and maintained a progressive supplier diversity program, I recognize its power to boost employee morale and foster inclusion in our company.
Actively seeking and partnering with diverse subcontractors and suppliers sends a clear message: Our company values diversity not only within its workforce, but throughout its operations and supply chain. This, in turn, instills pride in our employees, knowing they are part of an organization that champions diversity and inclusion.
Plus, it can inspire employees to bring their unique ideas and perspectives to the table, driving innovation and growth. An effective and proactive supplier diversity program can be a powerful tool to boost morale and promote a culture of inclusion and respect.
By embracing supplier diversity, construction companies can reap a host of benefits in addition to cost efficiency, from greater innovation and agility to social responsibility and a highly engaged workforce.
It’s a winning strategy that strengthens local communities and economies, ensures customer compliance and satisfaction, and drives business growth in today’s competitive landscape.
