Public institutions in the United States spend $1.3 trillion annually in procurement, representing a significant opportunity to drive equitable economic development in communities across America. While the U.S. has over 5.9 million employer enterprises, almost half are historically underutilized businesses (HUBs) that remain underrepresented in public procurement. The definition of HUBs varies slightly from institution to institution, but generally, they are owned by Black, Native American, Hispanic or Asian American people, disabled individuals, women and veterans.
Expanding vendor pools to include more HUBs drives competition, improves quality, increases creativity and innovation, and produces cost savings. Strategic procurement also helps strengthen local economies because HUB vendors create jobs, reinforce local supply chains and expand the tax base.
Drawing from successful supplier inclusion programs across the U.S. and insights from leading procurement professionals, this guide outlines essential elements for implementation. Here’s a summary:
The value of increased HUB utilization is clear. Research from McKinsey & Company found it produces 8.5% in annual savings. And doubling HUB spending to $2 trillion would create 4 million jobs (210,000 of them management positions) and generate $280 billion in income.1
* Tier 1 vendors are companies you as anchor institutions do business with directly; Tier 2 are their subcontractors, vendors and suppliers.
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