Supplier Diversity Office
Comprehensive Annual Report
Fiscal Year 2023
To: Governor Healey, Lieutenant Governor Driscoll, Members of the General Court, Cabinet Secretaries,
Agency Heads, Secretariat and Agency Supplier Diversity Officers
From: William M. McAvoy, Executive Director, Supplier Diversity Office
________________________________________________________________________________________
I am pleased to present the Supplier Diversity Office’s (SDO) Comprehensive Annual Report for Fiscal Year
2023 (FY2023). In addition to the reporting of Executive Branch agency results, this report also includes
narrative descriptions of supplier diversity programs and/or results from 15 (an increase of two)
Commonwealth quasi-public/non-executive organizations and the participation of seven (an increase of one)
constitutional/quasi-public/non-executive organizations also participating in the quantitative sections of this
report.
The SDO became a separate state agency under the Executive Office for Administration and Finance in 2021,
a change which elevated the SDO to an oversight agency and codified SDO programs and certification
categories. This change and the issuance of Executive Order 599 on June 24, 2022, strengthened the SDO’s
ability to carry out its important mission of promoting diversity in state contracting and increased
opportunities for underrepresented businesses.
Consistent with the directives in MGL c. 7, §§ 61 and Executive Order 599, the SDO provides certification,
programs, training services, and access to business opportunities and resources for Minority (MBE); Women
(WBE); Veteran (VBE); Service-Disabled Veteran (SDVOBE); Disability (DOBE); and Lesbian, Gay, Bisexual, and
Transgender (LGBTBE) owned businesses, as well as small Massachusetts businesses. The accompanying
report includes information about the Commonwealth’s diverse and small business programs, including the
Certification, Supplier Diversity (SDP), Small Business Purchasing (SBPP), Affirmative Marketing (AMP and
MCAMP), and Individuals with Disabilities programs.
I am pleased to provide the following highlights from the attached SDO FY2023 Annual Report:
• Growth in total diverse spending. The Commonwealth spent approximately $3.38 billion in FY2023
with diverse and small businesses (a 7.56% increase over FY2022), which includes:
o Discretionary (or program) spending by Commonwealth agencies through SDP, SBPP, and
DCAMM’s AMP programs of approximately $2.1 billion (a 7.75% increase over FY2022), and
o Nondiscretionary (or non-program) spending of approximately $1.2 billion (a 7.24% increase
over FY2022).
In addition, this report documents more than $163.7 million in spending on state-funded municipal
construction projects overseen by SDO’s MCAMP and more than $400 million in spending by quasi-
public organizations who submitted program narratives. The combined impact of all these efforts is
almost $4 billion in Commonwealth public spending with diverse and small businesses.
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 • Growth in spending by category. In FY2023, discretionary spending grew in the MBE, WBE, SBPP,
Veteran, and Disability categories by 0.56%, 6.9%, 13.9%, 21.1%, and 46.2% respectively compared to
the prior year. Spending with LGBT-owned businesses declined by approximately 40% in large part
due to changes in communication projects at two departments.
• Benchmark performance. Program participants exceeded spending benchmarks for MBE, WBE, and
SBPP by 8.14%, 43.03%, and 46%, respectively. The Commonwealth continued its efforts to meet its
ambitious veteran-owned business benchmark. Although nine executive agencies and two
secretariats met the veteran spending benchmark, the highest number since it was set in FY2015, the
Commonwealth as a whole did not meet this benchmark. The SDO hired a Senior Advisor for Veteran
Owned Business Development and Partnerships in Q4 of FY2023 to more actively recruit and manage
the engagement of Veteran-owned businesses in Commonwealth contracts through certification and
support.
• Spending by race/ethnicity. In FY2023, MBE spending by executive departments and other agencies
participating in the Supplier Diversity Program grew by $3.3 million, despite a dramatic shift in
purchasing after the end of the COVID pandemic. FY2020-FY2022 saw a significant growth of MBE
sales of personal protective equipment (PPE), COVID test kits and supplies. FY2023 saw a
readjustment as COVID-related orders diminished while non-COVID MBE spending continued to grow.
As a result of these two trends and year-to-year changes in agency and contractor needs, some
business groups experienced growth in spending while others saw a decline. Spending with Asian
American (Pacific), Cape Verdean, and Hispanic/Latino owned businesses increased by 5.97%, 20.37%,
and 14.22% respectively. In the meantime, spending with African American-owned businesses
declined by 26.03%, Asian American (Subcontinent) by 8.8%, and Native American-owned businesses
by 93.23%. In the case of African American-owned business spending, the change is due to large
COVID-related purchases in FY2021 and FY2022, which did not take place again in FY2023. However,
while COVID orders declined dramatically from FY2022 to FY2023, non-COVID-related spending with
African American-owned business increased by 35.8% over the same period. More details on the
impact of COVID spending can be found in the “Supplier Diversity During the Pandemic: FY2020-
FY2023 in Review” and the “MBE Spending by Race and Ethnicity” sections of this report on pages 12
and 30 respectively. Changes in Asian American (Subcontinent) and Native American-owned business
spending are due to changes in indirect spending by statewide contractors and the completion of
construction contracts respectively.
• Number of business relationships. The number of diverse and small companies with which the
Commonwealth conducted business directly and number of diverse businesses doing business with
Commonwealth contractors continued to grow. The SDO recorded direct expenditures with 1,584
diverse and small companies, an 8% increase compared to FY2022. The number of diverse businesses
listed as supplier diversity partners by Commonwealth contractors increased by 4% and reached
1,238.
• Number of certified and recognized businesses. The number of businesses certified and recognized
by the SDO increased in all categories with the exception of Portuguese Business Enterprises. The SDO
added 1,149 new diverse businesses to its directory (a 25% increase over FY2022), including 202 new
MBEs, 178 new WBEs, 28 new disability-owned businesses, 25 new veteran-owned and service-
disabled veteran-owned businesses, and 801 new LGBT-owned businesses.
• Training internal and external stakeholders. In its first full year of operation, the SDO’s training
program developed and delivered sessions that addressed the needs of diverse and small bidders,
prime contractors, executive agencies, and other public purchasers. The program built a full slate of
training sessions and held 74 dedicated classes that attracted 1,955 attendees. In addition, it
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 participated in statewide and departmental pre-bid conferences, contractor onboardings, and
contract kick-off sessions for buyers.
• Increased compliance efforts. In FY2023, the SDO continued to expand its compliance efforts to
ensure the integrity of the diverse and small business programs. The Spending Compliance
Verification program engaged 1,087 unique certified diverse businesses to verify 2,405 reporting line
items submitted by prime contractors. The program verified $306 million in reported spending, a 36%
increase compared to FY2022.
• LGBTBE and DOBE Benchmarks: The Healey-Driscoll Administration announced the expansion of
spending benchmarks in the SDO’s Supplier Diversity Program (SDP) to LGBT and Disability-Owned
Businesses effective in FY2024, further building on the Commonwealth having the most inclusive state
supplier diversity program in the nation.
• “SDO Means Business” campaign and Cross Functional Team. The SDO implemented a focused,
intentional approach to promote opportunities for diverse and small businesses by creating our “SDO
Means Business” campaign. It created a Cross Functional Team (CFT) comprised of representatives
from five of SDO’s units with the goal to increase the number of SDO-certified diverse and small prime
contractors on 13 selected statewide contracts by 25%. At the end of FY2023, 29% of the prime
contractors on the 13 statewide contracts were SDO certified and SBPP participants, up from 20% the
year before. This represents a 45% increase.
• SDO Advertising Campaign. For the second year in a row, the SDO engaged a certified diverse
marketing and communications firm. In FY2023, Archipelago Strategies Group (ASG) was brought in
to raise awareness and increase the user base of the Supplier Diversity Hub. ASG also created a new
“Unlock the Power of Supplier Diversity” campaign, which was seen by more than 4.5 million people.
• Expanded outreach. In FY2023, the SDO Engagement Team conducted more than 100 one-on-one
technical assistance sessions with diverse and small business owners. In addition, the Engagement
Team and other SDO staff attended and/or presented at more than 150 events geared toward
assisting small and diverse businesses, agencies, and other interested parties.
• Launched the Supplier Diversity Hub. The SDO launched the Supplier Diversity Hub ("Hub") in phases
in FY2022 and FY2023. The Hub is a new way for state agencies and prime vendors to manage their
supplier diversity efforts and to connect directly with diverse and small businesses. The Hub allows
users to plan individual procurements, track benchmark progress for their department’s spending,
and manage the supplier diversity efforts of their prime contractors to ensure contract compliance.
Through the Hub, all planning, reporting, spending tracking and notifications may now be collected
into one portal. The Hub’s easy-to-use dashboards and vendor tracking eliminates the guesswork out
of agency and vendor SDP performance.
• SDO Map: The SDO unveiled the SDO Certified Diverse Business Dashboard, which is an interactive
map that will help state agencies, cities, towns, prime bidders and contractors identify certified
diverse business partners based on location, certification category, and other search criteria.
• Supplier Diversity Awards. The SDO recognized the state departments and vendors who represented
the best in supplier diversity in FY2022 with an award ceremony at UMass Boston. Awards were given
for promoting the SDO's mission of fairness and equity in the state bidding process and recognized
more than 40 organizations. Speaking at the event were the Governor’s Deputy Chief of Staff for
Access and Opportunity Marcony Almeida-Barros and Secretary of the Executive Office for
Administration and Finance Matthew Gorzkowicz, who emphasized the importance of supporting
underserved businesses in the Commonwealth.
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While SDO annual reports typically do not include any activities or announcements that occurred after the
conclusion of the reported fiscal year, we are pleased to announce the following FY2024 initiatives (that
were worked on in FY2023) that will have a continued positive impact on diverse and small businesses,
including:
• The SDO released new Municipal Construction Affirmative Marketing Program (MCAMP) guidelines
mandating a three percent Veteran goal on state-funded municipal construction projects.
• The SDO invested in SDO IT infrastructure, including moving SBPP registration from COMMBUYS to
the SDO’s certification tracking system, Certrak, and connecting the SDO’s and DCAMM’s certification
systems in order to tag DCAMM certified businesses in the SDO’s system.
• The SDO proposed and is promoting the reopening of several statewide contracts for additional
diverse and small businesses in partnership with A&F and OSD.
• The SDO appointed members and kicked off the SDO Diverse and Small Business Advisory Board, a
voluntary board that provides guidance and advice to the SDO in fulfilling its mission to promote
equity and fairness in state contracting.
• The SDO updated the Municipal Supplier Diversity Playbook, which creates a framework for
establishing a local supplier diversity program and includes links to new SDO resources.
• Expanded Partnerships and Collaboration:
o Springfield: The SDO partnered with the City of Springfield to help them establish a diverse
and small business program, whereby both the City and SDO invested in technology that
would allow the City to certify diverse and small businesses and both entities to share certified
business lists.
o NaVOBA: The SDO entered into a partnership with the National Veteran Owned Business
Association (NaVOBA) to increase contracting opportunities with veteran-owned
businesses.
o MBDA: The SDO has partnered with the Massachusetts Minority Business Development
Agency (MBDA) Business Center, which is a subsidiary of the Greater New England Minority
Supplier Development Council (GNEMSDC), to help MBEs grow their businesses.
• Data Enhancement and Expanding SDO’s Reach: The SDO hired a data enhancement contractor to
conduct additional data reviews to determine if any businesses the Commonwealth has made
purchases from (prime contractors and subcontractors) are certified by other states or third-party
certification organizations. In FY2024, the SDO will reach out to these businesses to certify or
recognize them as diverse businesses in Massachusetts and to engage them in SDO programs. In
addition the SDO has reached out to its current certification partners to identify any additional
certified businesses that the Commonwealth may be doing business with and that the SDO can include
in its programs.
• Race and Ethnicity Transparency: Effective in FY2025, the SDO will make publicly accessible race and
ethnicity information about SDO-certified businesses that have not opted out of releasing this
information. This will help public buyers to be more intentional in making purchases from businesses
owned by specific racial and ethnic groups.
We look forward to building upon the legacy, innovation, and leadership the SDO has provided throughout
the Commonwealth and the nation as we continue to promote diversity, equity, and inclusion in the
Commonwealth’s public procurement and contracting processes.
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Contents
Introduction ........................................................................................................................................................ 8
SDO Overview...................................................................................................................................................... 8
SDO Organizational Development ...................................................................................................................... 8
SDO Mission Statement .................................................................................................................................. 8
SDO Commitment to Staff Diversity................................................................................................................ 9
SDO Innovation ................................................................................................................................................... 9
The Supplier Diversity Hub .............................................................................................................................. 9
SDO FY2023 Advertising Campaign ............................................................................................................... 11
Supplier Diversity During the Pandemic: FY2020-FY2023 in Review ............................................................ 12
State Certification Program............................................................................................................................... 15
State Certification ......................................................................................................................................... 15
Third-Party Certification Recognition............................................................................................................ 16
Ongoing Certification Program Activities ...................................................................................................... 17
Overview of Diverse and Small Business Spending ........................................................................................... 19
Discretionary Spending with Diverse and Small Businesses ......................................................................... 19
Number of Diverse and Small Businesses Receiving Discretionary Payments.............................................. 20
Non-Discretionary Spending with Diverse and Small Businesses ................................................................. 21
Total Spending with Diverse and Small Businesses....................................................................................... 21
Supplier Diversity Program (SDP) ...................................................................................................................... 23
Minority-Owned Business Enterprise (MBE) Spending ................................................................................. 25
Women-Owned Business Enterprise (WBE) Spending.................................................................................. 26
Combined Veteran-Owned Business Spending ...........................................................................