The Glossary of Terms provides you with a comprehensive listing of current supplier diversity terms along with their descriptions. Whether you’re a student, a professor, or a practicing professional, these definitions are provided as a reference to help you reinforce and enhance your understanding of the industry.
To build an efficient supplier diversity program, it’s essential that you familiarize yourself with the following terms:
We will continue to update this list on a regular basis. Please remember to return to this page to keep updated on new terms and their definition.
Last update: November 1, 2023
| Acronym/Abbreviation | Description |
|---|---|
| 8(a) | A certification offered United States Small Business Administration (SBA) that enrolls a business in the SBA’s Business Development Program and allows them participation in federal procurements that are specifically set aside for 8(a) certified businesses. As of July 2023, the 8(a) program for minorities has been suspended due to being ruled unconstitutional. See Ultima Servs. Corp. v. U.S. Department of Agriculture. |
| ABE | Asian [American] Business Enterprise; an Asian-owned business that has received certification. |
| ACDBE | Airport Concession Disadvantaged Business Enterprise; an airport concessionaire business that has received DBE certification [see DBE below]. |
| BDR | Billion Dollar Roundtable, a group of corporate entities working to increase commitment and spending levels with diverse suppliers. |
| CAGE Code | Commercial and Government Entity Code, a unique ID assigned to Federal suppliers. |
| Certification Agency | A third-party certifying body that specializes in the certification process for diverse-owned businesses. |
| Certified | A business that has received third-party certification (ex: WBENC, NSMDC, etc.) is said to be “certified”. |
| Classified Suppliers | Supplier Assertion/attestation that they are diverse (if the company is 51% owned and operated by an individual or group that is part of a historically underrepresented or underserved group). If a supplier previously had Certified status and the certificate has expired, their status will change from Certified to Classified. |
| Data Enrichment | A process of identifying and appending attribute data to supplier records. In Supplier Diversity, this is typically for the purpose of determining the demographics and/or certifications of a company (e.g., Minority, Woman, veteran etc.) |
| Data Cleanse | A process of identifying and appending attribute data to supplier records. In Supplier Diversity, this is typically for the purpose of determining the demographics and/or certifications of a company (e.g., Minority, Woman, veteran etc.) |
| Data Scrub | A process of identifying and appending attribute data to supplier records. In Supplier Diversity, this is typically for the purpose of determining the demographics and/or certifications of a company (e.g., Minority, Woman, veteran etc.) |
| Disability-Owned Business Enterprise (DOBE) | A person with a disability is the owner (or owners) and must own, operate, and control at least 51% of a US-based business to be identified as a Disability Owned Business enterprise (DOBE); and be a United States citizen or permanent legal resident. |
| Disability:IN | Formerly known as USBLN: 3rd party certifier for Person with Disability or Disabled owned businesses. A person with a disability owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification, and be a United States citizen or permanent legal resident. Disability:IN Global Directory is a collaborative disability inclusion database with country profiles to help companies achieve disability inclusion and equality around the world. |
| Disadvantaged Business Enterprise (DBE) | A business that is usually certified by a federal, state or local government agency as having met all of the government standards that award eligibility, but may include women, minority, disabled and other disadvantaged as a result of economic disadvantages with respect to education, employment, residence or business location or social disadvantage and lack of business training. |
| Disabled Veteran Business Enterprise (DVBE) | This term is used by the State of California, public utilities, and many private corporations to designate a company that is owned (at least 51%) and controlled by a Veteran with a Service-Connected Disability rating of at least 10% from the Department of Veterans Affairs. Additionally, the Veteran must reside in the state of California. |
| Disadvantaged Veteran Enterprise (DVE) | A business that is a small business concern owned and controlled by veterans, where not less than 51% is owned controlled and managed by veterans. |
| USBLN | Now known as Disability:IN. 3rd party certifier for person with Disability or Disabled owned businesses. A person with a disability owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification, and be a United States citizen or permanent legal resident. Disability:IN Global Directory is a collaborative disability inclusion database with country profiles to help companies achieve disability inclusion and equality around the world. |
| Diverse Business (Diverse Supplier) | A diverse business is any business that is at least 51 percent owned by a woman (WBE), a minority (MBE) or a business that is independently owned and operated, and able to qualify under criteria defined in the U.S. Small Business Administration’s (SBA) Table of Small Business Size Standards concerning a number of employees, average annual receipts or other criteria as outlined by the SBA. |
| Diverse Certification | Diversity certification is a review process to verify a business is 51 percent or more owned, controlled and operated by a diverse applicant or applicants. An authorized third party or regulatory agency performs the diversity certification. |
| Diverse Supplier Spend | Diverse supplier spend is procurement dollars that directly represent diverse or small businesses. |
| DOT | An acronym for the Department of Transportation, both at the federal and state government level. |
| DUNS | Dun and Bradstreet Number |
| Economic Impact Analysis (EIA) | An economic impact analysis (EIA) examines the effect of an event on the economy in a specified area, ranging from a single neighborhood to the entire globe. It usually measures changes in business revenue, business profits, personal wages, and/or jobs. The economic event analyzed can include the implementation of a new policy or project or may simply be the presence of a business or organization. An economic impact analysis is commonly conducted when there is public concern about the potential impacts of a proposed project or policy. |
| Economically Disadvantaged Individuals | Socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged. |
| El Paso Hispanic Chamber of Commerce (EPHCC) | El Paso Hispanic Chamber of Commerce, an SBA-approved certifier for the WOSB program for both WOSB and EDWOSB status. |
| Enhanced Digital Certification (EDC) | Third-party small- and diverse-business certification from SupplierGATEWAY. EDC is done entirely online. The application can be finished in 15 minutes with a decision made in less than 72 hours. |
| FAR: Federal Acquisition Regulations | Federal Acquisition Regulations are the rules governing how the Federal government procures goods and services |
| FedBizOpps (FBO) | The website where government buyers posted Federal procurement opportunities. As of November 2019, FBO became a legacy system and federal opportunities can be found on Beta.SAM. |
| FEIN: Federal Employer Identification Number | The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification. |
| FSC: Federal Supply Codes | A set of codes the Federal government uses to “group products into logical families for management purposes.” |
| Government Contracting Goals | Agency contracting goals instruct certain federal agencies in how much of their contracting dollars should be awarded to small businesses. |
| GSA | The United States General Services Administration establishes long-term government-wide contracts known as GSA Schedules (also known as Multiple Award Schedules or Federal Supply Schedules). These schedules are organized by the goods, services or products purchased. If you want to sell to the federal government it is recommended that you get on a GSA schedule. NOTE: The Department of Veterans Affairs (VA) has their own schedule, the VA Federal Supply Schedules Program, to procure medical supplies. |
| Historically Black Colleges / Universities & Minority Institutions (HBCU/MI) | Historically Black and minority colleges and universities that are recognized by the government as legitimate set-aside business opportunities. |
| Historically Underutilized Business Zones Program (HUBZone) | Helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. These preferences go to small businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. |
| HUBZone | Federal designation for historically underutilized business in designated urban or rural areas or designated census tracts, the business must be located in a designated area and 35% of its employees must live in designated HUB areas to qualify. Find HUBZone areas. A HubZone business can take part in the SBA’s HUBZone Empowerment Contracting Program. |
| HUD: Housing and Urban Development | The Department of Housing and Urban Development administers programs that provide housing and community development assistance. The Department also works to ensure fair and equal housing opportunities for all. |
| IDIQ: Indefinite Delivery/Indefinite Quantity contract. | IDIQ contracts provide a method to order from existing agency indefinite-delivery contracts as well as contracts awarded by another agency |
| Identified | Demographic data with no proof, generally furnished by the customer themselves and not certified in any way. There are situations where a company may be “certified” as a minority-owned business but “identified” as veteran-owned (i.e., there is proof of their Minority status based on a certification, but the Veteran information is unverified). |
| LGBT-Owned Business: Lesbian, Gay, Bi-Sexual, Transgender business enterprise | A business that is at least 51% owned and operated by an LGBT+ person(s). |
| Master Vendor File | The vendor master file is the repository of a considerable amount of information about a company’s suppliers, which are used for the payment of supplier invoices and the issuance of purchase orders. |
| MBE: Minority-Owned Business Enterprise | Minority Business Enterprise; a business that is 51% owned and controlled by one or more persons who are classified as Minority. The MBE designation is typically associated with certification by a recognized certifying body. |
| MWBE: Minority Woman Business Enterprise | A minority woman-owned business that has received MWBE certification. |
| NAICS: North American Industry Classifications System | The standard used by Federal statistical agencies in classifying business establishments to collect, analyze, and publish statistical data related to the U.S. business economy. |
| NaVOBA: National Veteran-Owned Business Association | A 3rd party certifier of veteran and service-disabled-owned businesses. A Veteran or Service-Disabled Veteran business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification. |
| NGLCC: National Gay and Lesbian Chamber of Commerce | The 3rd party certifier of LGBT businesses. An LGBT business owner (or owners) must own, operate, and control at least 51% of a US-based business and be a United States citizen or lawful permanent resident(s) to be eligible for certification. NGLCC Global is the international division of the National LGBT Chamber of Commerce. |
| NIGP Codes: National Institute of Governmental Purchasing Codes | NIGP Code is a universal taxonomy for identifying commodities and services in procurement systems. It is available as a 3-digit class code, a 5-digit class-item code, a 7-digit class-item-group code, and a detailed 11-digit code. |
| NMSDC: National Minority Supplier Development Council | The 3rd party certifier that certifies minority (for their certifying purpose NMSDC defines minority as Asian, Black, Hispanic, and/or Native American business owner that is “at least 1/4 or 25% minimum” of one of these categories) business. A minority business owner (or owners) must own, operate, and control at least 51% of a US-based business and be a United States citizen to be eligible for certification. Their Global-Link International Program works to connect historically excluded populations with corporate purchasing entities in other countries (Canada, China, UK, etc.). |
| Non-Classified Suppliers | In the data scrub, a non-classified supplier means there is no evidence showing their diversity status. A company will be marked as non-classified if it doesn’t meet the requirements of 51% owned and operated by an individual or group that is part of a historically underrepresented or underserved group. |
| NVBDC: National Veteran Business Development Council | A 3rd party certifier of Veteran and Service-disabled-owned businesses. Named by the Billion Dollar Roundtable as their certification organization of preference for VBEs and SDVBEs. A Veteran or Service-Disabled Veteran business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification. |
| NWBOC: National Women Business Owners Corporation | A 3rd party certifier that certifies women-owned businesses and an SBA-approved certifier for the WOSB program for both WOSB and EDWOSB status. A woman business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification and be a United States citizen or permanent legal resident. Also, the business has to have been in operation for at least six months and have customers/clients. |
| OSDBU: Office of Small Disadvantaged Business Utilization | Manages the development and implementation of appropriate outreach programs aimed at heightening the awareness of the small business community to the contracting opportunities available within Health & Human Services |
| PNW: Personal Net Worth Statement | A financial reporting document listing short and long-term assets and liabilities of an individual. Required for DBE certification. |
| Prime Vendor | Organization or company that has a direct relationship with the Customer. The Prime performs work/services or provides goods and bills the Customer directly for its goods or services. |
| PSC: Product Service Codes | A way to classify your business (products and services sold) – these codes are broken down into three types: products, services, and research and development projects, and are used in the SAM system. |
| PTAC: Procurement Technical Assistance Centers | They provide government contracting (federal, state, and/or local) assistance at little or no charge through training and one-on-one counseling. PTACs are part of the Procurement Technical Assistance Program. |
| PTAP: Procurement Technical Assistance Program | PTAP: Procurement Technical Assistance Program, a program established to expand the number of businesses capable of participating in government contracts. |
| PWD: Person with Disability or Disabled | A disabled-owned business (DOBE) that has received certification. |
| Registered and/or Resident Agent | A company or person designated to receive official notifications from a state on behalf of an out-of-state business entity. The agent must be located within the state in which they are receiving the notifications. |
| RFI: Request for Information | A standard business process that aims to collect written information about the capabilities of various suppliers. |
| RFP: Request for Proposal | A document that solicits a proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset to potential suppliers to submit business proposals. |
| RFQ: Request for Quote | A solicitation for goods or services in which a company asks suppliers to submit a price quote and bid on the chance to fulfill specific tasks or projects. |
| SAM: System for Award Management | Federal contracting registration system. You MUST BE registered to be certified by or do business with the Federal government. SAM has replaced the following disparate systems: CCR (Central Contractor Registration), FedReg (Federal Agency Registration), ORCA (Online Representations and Certifications Application), and EPLS (Excluded Parties List System). Note: The Federal government is in the process of transitioning registration to Beta.SAM, once registered, you should be notified when the transition is complete. |
| SBA: United States Small Business Administration | A Federal certifier (8(a) and HUBZone), a resource for small businesses and their owners, as well as, prospective entrepreneurs, and the repository holder for the Federal WSOB/EDWOSB program. |
| Self-Certified | A business that has gone through a self-certification process to attest to being either a small business or 51 %-owned by a woman or minority group. Generally done through the SBA’s self-certify program. |
| SBE: Small Business Enterprise | SBE is a company-level diversity certification. The local or state government usually issues SBE certifications. Eligibility for certification as a Small Business Enterprise varies depending on the issuer; requirements may relate to the number of employees, the length of time the company has been in business, and the net worth of the company’s owner. SBE certification is non-industry specific. |
| SDE: Small Disadvantaged Enterprise | A small business owned and controlled by socially and economically disadvantaged individuals as defined by Federal Acquisition Regulation (FAR) 19.001 |
| Service-Disabled Veteran-Owned Small Business (SDVOB) | A company owned (at least 51%) and controlled by a Veteran with a Service-Connected Disability rating from the Department of Veterans Affairs. The business also must qualify under the SBA’s Small Business Standards for their particular industry. |
| SIC: Standard Industrial Classification system | A four-digit classification system that classifies industries where businesses belong based on their business activities. The SIC classification system was created in 1937 to help the U.S. government and government agencies analyze economic activities across the domestic economy. |
| Small Business | A small business is defined as a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business. The definition of “small”—in terms of being able to apply for government support and qualify for preferential tax policy—varies by country and industry. The U.S. Small Business Administration defines a small business according to standards based on specific industries. |
| Small Business Administration (SBA) | The U.S. Small Business Administration is a United States government agency that provides support to entrepreneurs and small businesses. |
| Small Business Concern | A small business concern (SBC) must be independently owned and operated, not be dominant in its field of operation, and not exceed the relevant small business size standard for the particular procurement action. |
| Small Business Set-Asides (Set-aside Contracts) | Set-aside contracts exist for almost every kind of private sector work the government needs, from construction to catering. In addition to general small businesses, there are several specific categories of small businesses that the government aims to support through set-asides, including 8(a) business development, Women-Owned Small Businesses (WOSB), Service-Disabled Veteran-Owned Businesses, and HUBZone businesses. |
| Small Business Size Standard | Small Business Size Standard: Determined by the US Small Business Administration, a business’s primary NAICS code determines if its standard is based on the number of employees or gross sales. The size standard is the maximum size a business can be and still be considered small. Examples: 541511 – Custom Computer Programming Services, the annual revenue size standard is $27,500,000 million. For 311520 – Ice Cream and Frozen Dessert Manufacturing, the average number of full-time or part-time employees over the last 12 months standard is 1,000 employees. |
| Small Disadvantaged Business (SDB) | A small business that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. SDB status makes a company eligible for bidding and contracting benefit programs involved with federal procurement. |
| Socially Disadvantaged Individuals | Individuals who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. |
| Spend | The amount that a corporation or government entity purchases from an SMWVDBE is typically tracked by individual vendors and in aggregate. |
| Strategic Sourcing | A systematic approach to minimize costs, streamline processes, and improve quality. The process often results in the clustering of like purchases from fewer vendors. |
| Sub-Contractor | Organization or company that has a direct relationship with the Prime Vendor. The Sub performs work/services or provides goods 1) directly to the Prime or 2) to the Customer under the guidance of the Prime. The Sub bills the Prime for its goods and services. In this scenario, the Prime is the Sub’s direct customer, regardless of which organization consumes the goods or services. |
| Sub-Subcontractor | Organization or company that has a direct relationship with the Sub-Contractor. The Sub-Sub performs work/services or provides goods 1) directly to the Sub-Contractor, 2) directly to the Prime, or 3) to the Customer under the guidance of the Prime. The Sub-sub-contractor bills the Sub-contractor, who bills the Prime for the goods or services. In this scenario, the Subcontractor is the Subcontractor’s direct customer, regardless of which organization consumes the goods or services. |
| Supplier Development | Supplier development is a business strategy that encourages working closely with diverse suppliers to help boost performance and drive continued growth. It involves embracing the supplier’s expertise and aligning it with the goals of the purchasing organization. |
| Supplier Diversity | A proactive business program that encourages the use of minority-owned, women-owned, veteran-owned, LGBT-owned, service-disabled veteran-owned, historically underutilized businesses, and Small Business Administration (SBA)-defined small business concerns as suppliers. |
| Supplier Management Process | Supplier management is the process that ensures maximum value is received for the money that an organization pays to its suppliers. Because these supplies play a part in the smooth running of an organization, it’s important for both supplier and organization to engage properly and effectively. |
| Supplier Registration Portal | Is a web-based platform to help buyers engage suppliers, collect critical supplier capabilities, and manage supplier information all in one place. |
| Third-Party Master Database | A database compiled from several public and private sources, often hundreds in order to create a complete database with all of the vendor data available. |
| Tier 1 Spend | The amount of spend, or procurement dollars, that an organization spends directly with its tier 1 suppliers. In regards to supplier diversity, Tier 1 diverse spend represents only those dollars directly spent with diverse suppliers. |
| Tier 1 Supplier | Tier 1 suppliers are the companies that directly sell supplies and resources to the company. |
| Tier 2 Spend | The amount of spend, or procurement dollars, an organization’s suppliers spend with their tier 1 suppliers. |
| Tier 2 Supplier | A tier 2 supplier is the company that provides the tier 1 supplier with the product that is to be sold to the end-user. They don’t sell directly to the company, but they supply the companies that do. |
| Tier 2: Second-level contractor; subcontractor; also referred to as Tier 2 supplier. | Tier 2: Second-level contractor; subcontractor; also referred to as Tier 2 supplier. |
| UCP: Unified Certification Program | The Unified Certification Program (UCP) allows applicants for the Disadvantaged Business Enterprise (DBE) program to apply only once for a DBE certification that will be honored by all recipients in the state. |
| UNSPSC: United Nations Standard Product and Service Codes | A taxonomy of products and services for use in eCommerce. It is a four-level hierarchy coded as an eight-digit number, with an optional fifth level adding two more digits. |
| USPAACC: US Pan Asian American Chamber of Commerce | A 3rd party certifier of Asian American (heritage includes China, Hong Kong, Taiwan, Japan, the Philippines, South Korea, India, Indonesia, Vietnam, Cambodia, Thailand, Singapore, Malaysia, Bangladesh, Pakistan, and Mongolia) owned businesses. A business must be 51% owned, managed, and operated by Asian American(s) or Asian legal permanent resident(s). |
| USWCC: US Women’s Chamber of Commerce | A 3rd party certifier of women-owned businesses offering WBE and International WBE certification is an SBA-approved certifier for the WOSB program for both WOSB and EDWOSB status. A woman business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification and be a United States citizen. |
| VA: Veterans Administration | The Federal certifier for Veteran or Service-Disabled Veteran certification. A Veteran or Service-Disabled Veteran business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification. |
| SDVBE: Service-Disabled Veteran Business Enterprise | A Service-disabled Veteran is a Veteran who possesses either a disability rating letter issued by the VA establishing a Service-connected rating between 0 and 100 percent or a disability determination from the Department of Defense. In addition, at least 51 percent of the business must be directly and unconditionally owned by one or more Veteran(s) or Service-disabled Veteran(s). |
| Veteran-Owned | Veteran Owned is a company-level diversity registration. Generally, this certification is non-industry specific but requires that the company is at least 51% owned, operated, and controlled by a veteran. |
| Veteran-Disability Owned Business Enterprise (VDOBE) | A veteran-disability-owned business enterprise, often referred to as a VDOBE, is a business that is at least 51% owned, operated, and controlled by one or more veterans with a disability not incurred during their time of service. |
| Veteran-Owned Small Business (VOSB) | A company diversity registration designated under the Veteran Benefits, Health Care, and Information Technology Act of 2006 (Public Law 109-461). This certification is non-industry specific and requires that the firm meets the small business requirements established by the Small Business Administration (SBA). Organizations wishing to become verified as veteran-owned small businesses can apply to the Department of Veterans Affairs (VA) |
| Vietnam Veteran | A business that is at least 51% owned by one or more Vietnam Veterans who served between 1/1/59 and 5/7/75 and have control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business. |
| WBENC: Women’s Business Enterprise National Council | The largest 3rd party certifier that certifies women-owned businesses and an SBA-approved certifier for the WOSB program for WOSB status only. A woman business owner (or owners) must own, operate, and control at least 51% of a US-based business to be eligible for certification and be a United States citizen or permanent legal resident. WBENC is affiliated with WEConnect International, which certifies women-owned businesses internationally, including Canada, China, Europe, and India |
| Woman-Owned Business Enterprise (WBE) | WBE is a company-level diversity certification that can be issued at the federal, state, or local levels, and requirements for application will vary depending on the certificate issuer. Some governments require that a portion of their contracts be set aside for minority and women-owned businesses; becoming certified as a WBE allows the organization to bid on these opportunities. Often, becoming certified also places the organization in a searchable database at the government’s site, potentially increasing the organization’s exposure. |
| EDWOSB | A small business concern that is at least 51 percent directly and unconditionally owned and controlled by one or more women who are citizens (born or naturalized) of the United States and who are economically disadvantaged. The EDWOSB automatically qualifies as a women-owned small business eligible for the WOSB Program. A woman is presumed economically disadvantaged if she has a personal net worth of less than $750,000, her adjusted gross yearly income averaged over the three years preceding the certification does not exceed $350,000, and the fair market value of all her assets (including her primary residence and the value of the business concern) does not exceed $6 million. |
| WOSB | A small business concern that is at least 51 percent directly and unconditionally owned and controlled by one or more women who are citizens (born or naturalized) of the United States |