Suppliers with poor diversity records will fail in public sector procurement battle

Government proposals to increase equality in the multi-billion pound public sector procurement process will see suppliers with poor diversity records shoved to the bottom of the pile, according to legal experts.

The Discrimination Law Review, published earlier this month, stressed that in carrying out procurement, public authorities must have regard to the need to eliminate discrimination and promote equality.

With public sector procurement in the UK worth more than £125bn a year, public authorities represent a major customer base.

Earlier this year, Personnel Today exclusively revealed that technology giant Microsoft ditched a supplier with a poor attitude towards diversity. The company's HR director Dave Gartenberg said: "In one case, we changed provider because they were cavalier towards the topic. They were supplying a perfectly good service, but we stopped using them."

Sandra Wallace, head of equality and diversity at law firm DLA Piper, said: "Companies with a strong equality and diversity record will have an immediate advantage when bidding for contracts.

"Just as the Microsoft case highlighted, the Green Paper confirms that companies that fail to recognise the importance of good diversity practice are placing themselves at a competitive disadvantage."

Critics have argued that firms with poor diversity performance should be excluded from bidding for contracts altogether. But Wallace said the government was unlikely to go that far.
"There is a debate as to whether a simple breach of discrimination law should disqualify a company from tendering for public contracts," she said. "What is more likely to emerge is practical guidance on how to factor equality into the procurement process."

The CBI said employers recognised procurement could be a "highly effective tool" for encouraging equality, as long as contracts focused on results, and not on "box-ticking".

This story was first published by Personnel Today

Suppliers with poor diversity records will fail in public sector procurement battle

Government proposals to increase equality in the multi-billion pound public sector procurement process will see suppliers with poor diversity records shoved to the bottom of the pile, according to legal experts.

The Discrimination Law Review, published earlier this month, stressed that in carrying out procurement, public authorities must have regard to the need to eliminate discrimination and promote equality.

With public sector procurement in the UK worth more than £125bn a year, public authorities represent a major customer base.

Earlier this year, Personnel Today exclusively revealed that technology giant Microsoft ditched a supplier with a poor attitude towards diversity. The company's HR director Dave Gartenberg said: "In one case, we changed provider because they were cavalier towards the topic. They were supplying a perfectly good service, but we stopped using them."

Sandra Wallace, head of equality and diversity at law firm DLA Piper, said: "Companies with a strong equality and diversity record will have an immediate advantage when bidding for contracts.

"Just as the Microsoft case highlighted, the Green Paper confirms that companies that fail to recognise the importance of good diversity practice are placing themselves at a competitive disadvantage."

Critics have argued that firms with poor diversity performance should be excluded from bidding for contracts altogether. But Wallace said the government was unlikely to go that far.

"There is a debate as to whether a simple breach of discrimination law should disqualify a company from tendering for public contracts," she said. "What is more likely to emerge is practical guidance on how to factor equality into the procurement process."

The CBI said employers recognised procurement could be a "highly effective tool" for encouraging equality, as long as contracts focused on results, and not on "box-ticking".

Story first published in Personnel Today

Firms warned to develop diversity policies after Microsoft ditches supplier

Employers have again been warned to tighten their diversity practices after it emerged that Microsoft UK stopped using a supplier due to its poor policy on the issue.

Dave Gartenberg, HR director at Microsoft UK, told Personnel Today that the global IT firm was increasingly looking at its suppliers' diversity policies.

"In one case, we changed provider because they were cavalier towards the topic," he said. "They were supplying a perfectly good service, but we stopped using them."

Microsoft's UK arm is learning from its experiences in the US, where many private companies insist on good diversity policies from their suppliers.

"We just think it is the responsible thing to do," Gartenberg said.

The decision follows moves by Barclays last year to request diversity statistics from its legal advisers as part of its corporate social responsibility policy.

The Chartered Institute of Purchasing and Supply (CIPS) confirmed that private firms were now increasingly insisting on good diversity practices from their suppliers.

CIPS director of marketing Brian Ford told Personnel Today: "It is a growing trend for suppliers to be asked for their diversity policies. We have seen this grow over the past few months and we can't see that changing. It would be sensible for employers to put policies in place so they can't be caught out."

The Institute of Business Ethics (IBE) agreed that private firms were increasingly looking at the make-up of the companies they do business with.

Simon Webley, research director at the IBE, said: "More than 200 of the FTSE 350 companies now have codes of ethics. These include core values of the company, and diversity is beginning to appear on these plans."

The Equalities Review last month recommended that a company's diversity policies should be a key factor when awarding public service contracts.

But business groups have long insisted that contracts should be awarded on value for money, rather than diversity policies.

This story was first created and published by Personnel Today

Equalities review recommends public service contracts should be awarded on basis of diversity

Multi-million pound contracts could soon be won or lost on the diversity of a company's workforce.

The government-commissioned Equalities Review last week recommended that diversity policy should be a key factor when awarding public sector contracts. It said the law should be changed to place greater responsibilities on public bodies, including "a specific requirement to use procurement as a tool for achieving greater equality".

Panel member Sir Robert Kerslake told Personnel Today that private firms bidding for public service contracts should be made to provide details of their workforce make-up, and an outline of the steps they are taking to improve diversity.

"This can and should be an important factor in the decision to award contracts," said Kerslake, chief executive of Sheffield City Council. "It is a duty of the public body to actively take into account equality of employment."

Communities secretary Ruth Kelly signalled the government's willingness to act on the report, commissioned by prime minister Tony Blair in 2005. "This review makes clear that further progress will not happen without government action," she said. "We must remain prepared to take tough decisions."

A formal response is expected by the autumn, but the CBI insisted that public service contracts should be awarded on the basis of value for money, rather than the diversity of a workforce. It said employers should not be subjected to additional bureaucracy or legal risk.

The Equalities Review was led by Commission for Equality and Human Rights chairman Trevor Phillips. He warned that unless drastic action was taken, inequality in the UK would remain at an "intolerable level". At the current rate of change, it would take nearly 100 years for the ethnic employment gap to be closed.

10 steps to equality
Defining equality
Building a consensus on equality
Measuring progress towards equality
Transparency about progress
Targeted action on persistent inequalities
A simpler legal framework
More accountability for delivering equality
Using procurement and commissioning positively
Enabling and supporting organisations in all sectors
A more sophisticated enforcement regime

This story was first created and published by Personnel Today