Tracking diversity spend in today’s environment is often a mandated requirement and just good corporate social responsibility. Nearly all public, and an increasing number of private, construction projects have some form supplier diversity requirements that stipulate small business and/or minority, women or disadvantaged business enterprise (M/W/DBE) reporting.
Many of these programs require contractors to file detailed payroll records and report on their efforts to locate and hire qualified workers—and therein lies the challenge.
1. Track by Project Level
Diversity tracking, from defining diversity specifications to measuring and verifying payment goals, on construction projects is typically not a straightforward process. A common issue is that general contractors find it difficult to track diversity spend on the project level and oftentimes internal teams are putting these reports together.
If general contractors are struggling to reach diversity goals with prime subcontractors, then tracking by project becomes even more important. Aside from gaining a clear understanding of progress, tracking diversity throughout the project’s supply chain can help uncover qualifying M/W/DBE sub-tier subcontractors and their material suppliers, which count toward a project’s diversity targets.
2. Start With Procurement
Diversity spend should begin during procurement when your team has the time—and hopefully the tools—to verify diversity certifications. Waiting until the project is underway to begin tracking is a recipe for missed measures.
While there are strategies, starting at the bidding process, to increase a projects’ M/W/DBE exposure (read more about it here), the first step is to begin collecting and tracking diversity certifications from the start. Tracking diversity spend is no small task, and maintaining the project’s goal can become reactive, depending on the current progress.
3. Automate Renewal Reminders
Automated systems send reminders to subcontractors when certifications need renewal and when those documents are submitted and ready for review. As well, the project diversity setup form allows construction managers and general contractors to assign the percentage contribution from tier-1 and tier-2 subcontractors and material suppliers, on a project-by-project basis, which further helps meet diversity quotas.
But it’s the analytics within a diversity tracking system that provide the greatest value. Constrafor’s solution continuously collects and reports invoices and RFQs, so real-time diversity measures are mapped to goals automatically. Using Constrafor’s purpose-built Diversity Tracking solution provides full visibility into your supply chain diversity spend, with all required information reflected in your automated diversity reports.
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