Equity in Action: How Inclusive Procurement Drives Long-Term Value

Inclusive procurement has become one of the most effective tools available to both public and private institutions at a time when achieving equitable economic growth is a top priority. When implemented purposefully and strategically, inclusive procurement creates long-term benefits for institutions, communities, and economies in addition to providing opportunities for underrepresented companies.  

Over $2.5 trillion is spent on procurement each year by anchor institutions like hospitals and universities as well as local governments across the United States. Due to systemic obstacles, a lack of networks, and outright discrimination, minority- and women-owned business enterprises (MWBEs) have historically been disproportionately underrepresented in contracting opportunities.  

However, evidence supports that enabling inclusive procurement in a diversified manner can be both morally and economically strategic. A diversified supplier base contributes to innovation, competition, and market development. As Rod Robinson, a procurement expert, pointed out, an expanded suppliers' pool increases competitiveness, introduces new ideas, and ultimately improves value delivery.  

For historically marginalized groups, access to procurement is the doorway to intergenerational wealth. Securing a contract with a city can provide small businesses with a predictable revenue stream, positioning them for growth, stability, and investment by others, says the National League of Cities (NLC). This is particularly important for Black and Hispanic/Latinx-owned firms, which often disproportionately face challenges accessing capital and growing their footprint. 

As the Inclusive Procurement and Contracting: Building a Field of Policy and Practice report outlines, nearly half of the private-sector workforce is employed by small businesses, yet MWBEs still face persistent disparities in revenue and growth. When given access to government and institutional contracts, these businesses can thrive and contribute to community-level economic resilience. 

From case studies and field research across the U.S., several evidence-backed strategies have emerged as effective: 

1. Strengthening Data and Transparency 

Cities such as Baltimore, Anchorage, and Charlotte have improved outcomes by collecting race-disaggregated data on vendors and bidders. This enables data-driven policy reform and more precise identification of barriers to access. 

2. Proactive Outreach and Matchmaking 

Programs like Detroit’s D2D initiative and Chicago Anchors for a Strong Economy (CASE) focus on building pipelines between anchor institutions and ready-to-scale diverse vendors. These initiatives prioritize targeted outreach over broad-based campaigns, helping to level the playing field by forecasting opportunities and building trust. 

3. Simplifying Bidding and Ensuring Prompt Payment 

Burdensome paperwork and slow payment processes can choke the lifeline of small businesses. Cities like Tulsa and Memphis have taken steps to streamline registration, consolidate forms, and ensure that MWBE firms are paid within days—not months—of invoice submission. 

4. Unbundling Contracts 

Large contracts often present insurmountable barriers for smaller firms. By breaking these contracts into smaller, manageable units, cities like Seattle and Los Angeles have opened the doors to greater participation by MWBEs. 

5. Setting Inclusive Subcontracting Goals 

While prime contractors often dominate public bids, setting goals for MWBE subcontractors can ensure more equitable distribution. This tactic, especially when monitored and enforced, helps embed inclusivity within larger contracts. 

Despite progress, there are significant obstacles remaining. Disjointed certification systems, lack of data sharing between agencies, and insufficiently resourced compliance mechanisms still hinder scale and effectiveness. Numerous policies remain reactive as well, and few are reinforced by robust accountability systems. 

Apart from economic gains, inclusive procurement also develops institutional resilience and social trust. Various suppliers possess various perspectives and community linkages that make institutions youthful and reactive in a dynamic world. In addition, Dr. Natasha Hirst of D&I Leaders has explained that organizations that implement inclusive procurement in their operations have improved ESG performance, enhanced supplier innovation, and more resilient brand value.  

And the rate of return on investment is measurable. According to one Kaleida International study, companies with demonstrated supplier diversity can capture as much as 3% market share. 

Inclusive procurement is not only a procurement reform—it's an economic development strategy, a social equity mandate, and a long-term investment in resilience. Governments, anchor institutions, and corporations will all need to make inclusive procurement a core business strategy, not a compliance checkbox. 

The way ahead demands strong leadership, inter-sectoral collaboration, and unshakeable commitment. But the reward—more innovative, more equitable, more prosperous communities—is well worth the effort.