UPDATE: Agenda Item K-6 SUPPLIER DIVERSITY REPORT March 15, 2013 The Finance, Technology, and Human Resources Committee has asked to be updated periodically regarding data being collected and compiled on the KCTCS Supplier Diversity Initiative. KCTCS defines diverse suppliers as those businesses owned by ethnic minorities, women, veterans, or the physically challenged. The most recent report was made at the September 21, 2012, Board of Regents meeting at which time the Board received an update on the activities of Fiscal Year 2011-12 (July 1, 2011, through June 30, 2012). The update also indicated that data were being collected and compiled to show the results of efforts to increase the number of diverse suppliers with which KCTCS does business. Data are being compiled on a quarterly basis. Data for the first and second quarters of 2012-13 (July 1 through September 30, 2012, and October 1 through December 31, 2012) are included as Attachment A. Highlights from the first and second quarters of 2012-13 as compared to 2011-12 include an increase in the dollar amount spent with diverse suppliers (an increase of $506,344 or 22.1 percent). Within this total, the dollar amount spent with Physically Challenged Owned businesses increased 200.7 percent, Women Owned businesses increased 43.7 percent, Minority Owned businesses increased 0.5 percent, and Veteran Owned businesses decreased 72.0 percent. In keeping with the KCTCS strong interest in working with the Kentucky Finance and Administration Cabinet to support and enhance the solicitation of diverse suppliers and contractors for all KCTCS capital projects, a diverse supplier outreach workshop was held at West Kentucky Community and Technical College in November. The outreach workshop was to encourage participation by diverse suppliers in the competitive procurement process for the capital construction work scheduled for the college, the Paducah School of Art Sculpture Building. Another capital construction supplier diversity outreach workshop is being planned for Bluegrass Community and Technical College regarding construction and furnishings for the Newtown Campus. As a follow up to KCTCS Board Chair Peeples November 2011 letter to Kentucky Finance and Administration Cabinet Secretary Flanery regarding KCTCS supplier diversity efforts and a subsequent meeting of Chair Peeples and President McCall with Secretary Flanery in August 2012, the Kentucky Finance and Administration Cabinet has recently expanded its supplier diversity program with guidelines to allow executive branch agencies to use their small purchase authority to expand business with ethnic minority businesses. KCTCS had already extended to its colleges this small purchase authority as part of its supplier diversity initiative. KCTCS staff continues to actively participate in events and trade shows, including local chamber of commerce and professional trade organization outings to promote interest in growing our diverse spend. Since the September 2012 report to the Board of Regents, college, System Office, and National Diversity Solutions (NDS) staff have participated in numerous supplier related forums, e.g., Commerce Lexington s Opportunity Exchange sessions and the Awards Program for the inaugural participants in the Commerce Lexington Minority Business Accelerator. 151
KCTCS is conducting a presentation (Vendor Diversity Reporting) about supplier diversity at the Alliance Conference in Indianapolis in March. Alliance represents the largest meeting of higher education, public sector, and federal users of Oracle applications in the world. KCTCS also will be participating in the Kentucky Supplier Diversity Collaborative to share best practices. Members of the Collaborative include the University of Kentucky, Fayette County Public Schools, Lexington-Fayette Urban County Government, Commerce Lexington, the Governor s Office on Minority Empowerment, and the Bluegrass Airport. KCTCS has signed on with the Tri-State Minority Supplier Development Council (TSMSDC) as a Bronze Corporate Sponsor for 2013. This sponsorship will include KCTCS receiving significant recognition at all TSMSDC events and opportunity fairs throughout Kentucky, Southern Indiana, and West Virginia. In order to obtain more robust data regarding its procurement card program, KCTCS is changing the provider of its procurement card service from JP Morgan to PNC Bank in late March. The software application provided by JP Morgan Chase was not able to provide the reporting functionality needed to report diverse supplier spend by business unit. The software application offered by PNC Bank provides better reporting functionality that will enable KCTCS to determine the amount spent with diversity suppliers via the KCTCS ProCard program. A key element of the KCTCS Supplier Diversity Initiative has been NDS staff visiting the colleges to discuss how best to enhance supplier diversity within the college s service area. The total number of diverse suppliers within the KCTCS master supplier list has been increased, enabling proactive notification to diverse suppliers of new opportunities as they occur. KCTCS also maintains a Diverse Supplier Collaboration Portal, an online tool used to register, qualify, and communicate opportunities with current and potential diverse suppliers of KCTCS needs for various goods and services. In the coming months a Diverse Supplier Outreach Workshop is being planned and will be held at the System Office. The quarterly Supplier Diversity Initiative newsletters continue to be published (see Attachment B) featuring details of future opportunities with KCTCS, upcoming outreach workshops, diverse supplier success stories, and Supplier Spotlight features. A written assessment of the current status of the KCTCS Supplier Diversity Initiative by NDS is included as Attachment C. 152
Diverse Supplier Summary FY 2013 Compared to FY 2012 Purchase Orders and Check Requests Expenditures Supplier Diversity - July 1 - September 30 First Quarter FY 2012 First Quarter FY 2013 Dollar Percent Expenses Expenses July 1 - September 30 Amount % of Total Amount % of Total FY 2012 to FY 2013 FY 2012 to FY 2013 All Suppliers $ 12,569,918 100.00% $ 20,583,411 100.00% $ 8,013,493 63.8% Diverse Suppliers* Minority Owned $ 156,472 1.2% $ 356,873 1.7% $ 200,401 128.1% Woman Owned $ 590,683 4.7% $ 1,010,758 4.9% $ 420,075 71.1% Physically Challenged Owned $ 25,248 0.2% $ 340,880 1.7% $ 315,632 1250.1% Veteran Owned $ 226,619 1.8% $ 87,231 0.4% $ (139,388) -61.5% Total $ 999,022 7.9% $ 1,795,742 8.7% $ 796,720 79.7% 153 Supplier Diversity - October 1 - December 31 Second Quarter FY 2012 Second Quarter FY 2013 Dollar Percent Expenses Expenses October 1 - December 31 Amount % of Total Amount % of Total FY 2012 to FY 2013 FY 2012 to FY 2013 All Suppliers $ 11,930,218 100.00% $ 13,675,666 100.00% $ 1,745,447 14.6% Diverse Suppliers* Minority Owned $ 332,139 2.8% $ 134,179 1.0% $ (197,960) -59.6% Woman Owned $ 361,764 3.0% $ 357,513 2.6% $ (4,250) -1.2% Physically Challenged Owned $ 232,808 2.0% $ 434,970 3.2% $ 202,162 86.8% Veteran Owned $ 370,496 3.1% $ 80,168 0.6% $ (290,327) -78.4% Total $ 1,297,206 10.9% $ 1,006,830 7.4% $ (290,376) -22.4% Supplier Diversity - July 1 - December 31 First Half of FY 2012 First Half of FY 2013 Dollar Percent Summary Expenses Summary Expenses July 1 - December 31 Amount % of Total Amount % of Total FY 2012 to FY 2013 FY 2012 to FY 2013 All Suppliers $ 24,500,136 100.00% $ 34,259,077 100.00% $ 9,758,941 39.8% Diverse Suppliers* Minority Owned Business $ 488,611 2.0% $ 491,052 1.4% $ 2,441 0.5% Woman Owned Business $ 952,447 3.9% $ 1,368,272 4.0% $ 415,825 43.7% Physically Challenged Owned $ 258,056 1.1% $ 775,849 2.3% $ 517,793 200.7% Veteran Owned $ 597,115 2.4% $ 167,400 0.5% $ (429,715) -72.0% Total $ 2,296,228 9.4% $ 2,802,572 8.2% $ 506,344 22.1% *Diverse Supplier Categories are self-reported. Suppliers may be reported in more than one category. Detail may not sum to total due to rounding. Attachment A
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