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