When a smaller firm owned by a woman, minority, or disabled vet, wants to develop a relationship with a large organization like Educational Testing Service (ETS) that sells its services nationally, says Art Gelvin, executive director of finance corporate supplier management at ETS, the first thing the firm should do is to get certified in multiple states.
Multi-state certification just makes things easier for a firm like ETS, which must fulfill both federal and state government mandates to grant a specified amount or percentage of business to diverse firms. But ETS must know from the get go who is and is not a diverse firm and for which states a business is certified. “Then we don’t have to do due diligence for each new state,” says Gelvin. “A company must be certified as a diverse business to have dollars count,” that is, count toward each company’s quota for awarding work to minority-owned companies.
Although formerly companies could be self-certified, now the certification must come through an independent agency. Minorities generally apply to the local branch of the National Minority Supplier Development Council (NMSDC). Its certification process uses a combination of screenings, interviews, and site visits to ensure that minority businesses are at least 51 percent owned, operated, and controlled by Asians, African Americans, Hispanics, or Native Americans.
A concern is said to be minority-owned if it is at least 51 percent owned by minorities. A business is minority-controlled if minorities own at least 30 percent of a firm’s economic equity, and these owners also control day-to-day operations, retain a majority of voting equity, and operationally control the board of directors.
To get certification for women-owned businesses, companies go to the Women’s Business Enterprise National Council. The certification group for firms owned by disabled veterans is the Association for Service Disabled Veterans. For government opportunities, firms often use the Small Business Administration.
Gelvin speaks at “Meet the Purchasing Manager: A Procurement Conference,” on Wednesday, July 26, at 8 a.m. at the New Jersey Hospital Association’s Conference Center at 760 Alexander Road. The meeting is co-sponsored by the New Jersey Technology Council, the Princeton Regional Chamber of Commerce, and the Metropolitan Trenton African-American Chamber of Commerce. Cost: $100 for nonmembers. For more information and to register, visit www.njtc.org or call 856- 787-9700.
The event opens with a panel discussion on “how to do business with a large company,” with representatives from industry leaders, including ETS, Johnson & Johnson, Merrill Lynch, Princeton University, and Telcordia Technologies. Attendees receive a buyer’s guide that describes the products, services, key management people, website, and contact information of each company.
State regulations are designed to provide business opportunities within a state, because if business goes elsewhere, the state’s economy suffers. As a result, the ins and outs of certification can get a little messy at the state level.
The primary issue is that states have very different requirements regarding diverse businesses. Some, for example, require that an out-of-state company have a facility in the state to be considered as a minority-controlled enterprise in the state. Others demand that a company complete certification through a specific state or county agency. Gelvin’s staff is happy to advise potential vendors.
Because ETS is in the education market, most of its procurement is service related. “The majority of opportunities coming up now are focused in printing, technical training, translation, market research, and certain custom products and services,” says Gelvin. “Our business is focused on opportunities we get from states and school districts and local regions,” he continues. “When an RFP (request for proposal) is issued by a state, the goal for supplier diversity is to do business with companies certified in that state.”
To achieve its goals for subcontracting to diverse firms, ETS works to maximize the competitive bidding process for any contract over $25,000 — bidding out to a minimum of three companies, one of which is owned by a minority, a woman, or a disabled veteran (although Gelvin says he has not been able to identify one of the latter in New Jersey). ETS currently has a database of 68 to 70 diverse firms, 38 of which are in New Jersey.
For small diverse firms that want to work with ETS and other large firms, Gelvin has a couple of suggestions beyond multi-state certification:
Contact a corporation’s supplier diversity group. Gelvin urges businesses to “give us a call.” The procedure ETS follows is straightforward: The minority-owned firm completes a supplier diversity profile with information on size, finances, customers, ownership, and certification. Once Gelvin’s supplier diversity group has done due diligence to ensure that a company is financially stable, it determines whether the applying firm has a niche or service that ETS could use. “We can’t entertain every firm,” says Gelvin. “It’s not fair to them to waste resources and efforts.
Provide a competitive advantage. Gelvin suggests that firms provide value-added products and services — “services that we can’t do or don’t want to do ourselves.” Because diverse firms often have a smaller infrastructure, for example, they can be more cost-efficient and quicker than other businesses.
If diverse firms feel they can’t handle a particular opportunity themselves, Gelvin advises that they team up with a couple of other firms: “As a consortium they will a have bigger weight and more resources, which might give them more opportunities.” For example, if ETS wanted someone to design a certain form, a firm that only offers design might team up with a printer and the two could bid together.
Gelvin has been in contracts procurement since he graduated from Northeastern University and couldn’t find a job in his major, industrial relations. But his experience is relatively wide. He has handled areas from R&D to buying a spacecraft, and has run a couple of small companies. During his 30 years in Maryland, he worked primarily in telecommunications and was a partner in a small telecommunications and software development company.
Gelvin, who grew up on the North Shore near Boston, moved to New Jersey in 1999 to join Telcordia. Two-and-a-half years later, after Telcordia downsized, he worked with the parent company on a year-long project, then started a small consulting company.
Companies should be aware that their tenure in a database like the one at ETS is not eternal. If ETS has not done work with a business for a couple of years, it will probably be dropped from the database. But, for diverse companies that do their homework and get the necessary certifications, opportunity is there.