This clause requires you (the supplier) to meet targets for hiring or purchasing from women-owned, minority-owned, or other underrepresented businesses. It matters because the buyer is often legally required by government contracts or corporate policy to track this data, and failure to meet targets can result in penalties, contract termination, or being blacklisted from future work. For example, a US federal contractor might require 15% of subcontractors to be women-owned businesses. The legal principle is that diversity obligations flow down the supply chain—the buyer's obligation becomes your obligation.
Ask for a clear, written definition of which groups qualify and what "target" means (is it a hard requirement or a good-faith effort?). Request at least 30 days' notice before any audit, and negotiate whether you must meet the target immediately or can phase it in over 12 months, especially if you're a small supplier. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause requires you (the supplier) to meet targets for hiring or purchasing from women-owned, minority-owned, or other underrepresented businesses.
Why should I care about this clause?
It matters because the buyer is often legally required by government contracts or corporate policy to track this data, and failure to meet targets can result in penalties, contract termination, or being blacklisted from future work.
What are my options?
For example, a US federal contractor might require 15% of subcontractors to be women-owned businesses.
How does this affect small businesses?
The legal principle is that diversity obligations flow down the supply chain—the buyer's obligation becomes your obligation.