Supplier Diversity at Microsoft

Glossary

April 9, 2009


This document helps to explain the core concepts associated with procurement and supplier diversity.
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A

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African-American (n.)
A United States citizen having origins in any of the Black racial groups of Africa.

 Asian-Indian (n.)
A United States citizen whose origins are from India, Pakistan, or Bangladesh.

 Asian-Pacific (n.)
A United States citizen whose origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, Guam, the United States Trust Territories of the Pacific, or the Northern Marianas.

B

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Black (n.)
A United States citizen having origins in any of the Black racial groups of Africa.

C

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Category Manager (CM) (n.)
A Microsoft procurement employee who manages the category of procurement at Microsoft, including the suppliers and vendors within that category of goods or services.

D

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disabled veteran (n.)
A veteran with a disability that is service-connected, as defined in section 101(16) of title 38, United States Code.

E

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e-procurement (n.)
A system of online processes by which key procurement activities are conducted. E-procurement processes at Microsoft include MS Market, MS Invoice, MS Inquire, and direct deposit of payments to vendors..

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Hispanic (n.)
A United States citizen of true-born Hispanic heritage, from any of the Spanish-speaking areas of Latin America or the following regions: Mexico, Central America, South America and the Caribbean Basin only.

M

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Microsoft Vendor Program (MSVP) (n.)
The Microsoft® Vendor Program (MSVP) was created to make it easy for Microsoft employees to work with a pre-qualified, select group of vendors—and for vendors such as you to work with us. It includes a series of criteria that vendors must meet to be included (such as signing the Microsoft Vendor Program Agreement) as well as provides a range of benefits to both Microsoft vendors and employees. Microsoft vendors are divided into two levels-preferred vendors (80 percent of the suppliers) and premier vendors (20 percent of the suppliers).

 Microsoft Vendor Program Agreement (n.)
This contract is duly executed by Microsoft and the vendor prior to doing any work. Because it is an overarching agreement, once the vendor has signed this Agreement, no further contracts are needed for work performed (other than specific statements of work depending on the nature of the project).

 Minority Business Enterprise (MBE) (n.)
A minority-owned business is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated, and controlled by minority group members. "Minority group members" are United States citizens who are Asian, Black, Hispanic, and Native American. Ownership by minority individuals means the business is at least fifty-one percent (51%) owned by such individuals or, in the case of a publicly-owned business, at least fifty-one percent (51%) of the stock is owned by one or more such individuals. Further, the management and daily operations are controlled by those minority group members.

 MS Inquire (n.)
Part of the Microsoft suite of e-procurement tools, MS Inquire allows vendors to track payment progress.

 MS Invoice (n.)
Part of the Microsoft suite of e-procurement tools, MS Invoice enables vendors to submit invoices or credit memos online.

 MS Market (n.)
Part of the Microsoft suite of e-procurement tools, MS Market not only makes it easy for Microsoft employees to find appropriate MSVP vendors, it automates project initiation and setting up purchase orders so vendors don't have to wait for paper forms to make thier way back and forth between employees.

 Minority, Women, or Disabled Veteran Business Enterprise (MWDVBE) (n.)
Each of these is a certified type of business enterprise that can be employed to meet diversity requirements. For more information, see the definitions of each type in this glossary.

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Native American (n.)
A person who is an American Indian, Eskimo, Aleut, or Native Hawaiian, and regarded as such by the community of which the person claims to be a part. Native Americans must be documented members of a North American tribe, band, or otherwise organized group of native people who are indigenous to the continental United States and proof can be provided through a Native American Blood Degree Certificate (that is, tribal registry letter, tribal roll register number).

 New Vendor Application (NVA) (n.)
This is a form that Microsoft utilizes to capture information from suppliers who want to provide goods and/or services to/for Microsoft. The NVA captures suppliers IRS tax status, business classification, federal business classification profile, income tax withholding information and banking information for payment. Completion of the NVA does not guarantee that the supplier will be set up in the Microsoft Vendor Master File or will become part of the Microsoft Vendor Program.

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preferred vendor (n.)
The Preferred level is the basic level where the majority of MSVP vendors are grouped. To be at this level, you must meet the basic criteria:
  • Specific criteria for the category of goods or service being purchased.
  • Maintain a high level of performance (that is, quality of goods and service).
  • Sign a Microsoft® Vendor Program Agreement or MSVP compliant contract.
  • Agree to 2%/10 net 60 payment terms.
  • Agree to abide by the Microsoft Vendor Program Administrative Guidelines.
  • Agree to Microsoft-wide negotiated rates.
  • Submit all invoices through MS Invoice.
  • Accept payment by direct deposit.
  • Agree to report on Minority, Women, or Disabled Veteran Business Enterprise (MWDVBE) subcontracting semi-annually.
  • Subcontract a minimum of 5 percent of work to minority-owned and 5 percent of work to women owned small businesses—for a total of 10 percent.
  • Be trained on Microsoft brand strategies as well as in the use of general Microsoft procurement processes such as MS Invoice, MS Inquire, and others.
This level makes up 80 percent of the Microsoft vendor base.

 premier vendor (n.)
Premier vendors must meet all criteria for preferred vendors, plus they must have recommended by Category Managers (CMs) and/or Vendor Account Managers (VAMs). In addition, a premier vendor must meet three out of the following four criteria:
  1. Minimum annual spend of $5 million.
  2. Annual Vendor Performance Management Review and Scorecard.
  3. Strategically critical to Microsoft and meets at least one of the following criteria:
    • Replacing the vendor would be difficult and would significantly impact Microsoft's business.
    • Vendor is critical to the production/shipping/marketing of a Microsoft product.
    • Vendor is critical to helping Microsoft improve its brand/image.
    • Vendor provides a service that directly touches Microsoft customers and/or partners.
    • Vendor provides key products/services to our IT infrastructure.
    • Represents a strategic alliance with Microsoft.
  4. Offers preferred pricing to Microsoft.
Premier vendors are the featured vendor by category in the e-procurement system accessed by Microsoft employees, and in some cases may be the sole supplier in a category (conversely, note that there may be categories of goods or services for which there is no vendor at the MSVP Premier vendor level). This entire level will include no more than top 20 percent of the Microsoft vendor base.

 Program Administrative Guidelines (n.)
This adjunct to the Microsoft Vendor Program Agreement outlines the requirements Microsoft Vendor Program vendors are expected to follow, including travel policy, vendor code of conduct, pre-placement policy, and Statement of Work (SOW).

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Recognized Certifying Bodies (n.)
These organizations certify enterprises as minority or woman owned, managed and controlled, and are one or more of the following: a state agency, a city agency, the National Minority Supplier Development Regional Council (NMSDC), the Women's Business Enterprise National Council (WBENC), the National Women Business Owner Corporation (NWBOC), the California Public Utilities Commission's (CPUC) Minority/Women Business Enterprise (M/WBE) Clearinghouse, or the United States Small Business Administration Certified Small Disadvantaged Business (SDB).

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small business (n.)
A business smaller than a given size as measured by its employment, business receipts, or business assets. The term "size standard" describes the numerical definition of a small business. In other words, a business is considered "small" if it meets or is below an established "size standard." The United States Small Business Administration (SBA) size standards define whether a business entity is small and, thus, eligible for Government programs and preferences reserved for "small business" concerns. Size standards have been established for all for-profit economic activities, or industries, in the North American Industry Classification System (NAICS).

 Small Owned and Operated Disabled Veteran Businesses (n.)
Businesses (a) that are at least owned by one or more Service Disabled Veterans (defined as a veteran with a disability that is service-connected as defined in section 101(16) of title 38, United States Code) or, in the case of any publicly owned business, not less than fifty-one percent (51%) of the stock of which is owned by one or more Service Disabled Veterans; and (b) whose management and daily business operations are controlled by one or more Service Disabled Veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

 Small Disadvantaged Business Concern (n.)
A small business concern that is at least 51 percent (51%) owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent (51%) of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.

 Statement of Work (SOW) (n.)
An SOW is to be completed before work is initiated with a Microsoft® Vendor Program (MSVP) vendor on any assignment. Doing so helps ensure that expectations are understood and agreed upon by all parties up front. It should include price, payment terms, delivery dates, and specifications for the work.

 supply chain (n.)
The identification, acquisition, access, positioning, and management of resources the organization needs or potentially needs in the attainment of its strategic objectives.

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Tier X (n.)
The companies doing business as a sub-contractor to the prime contractor (Tier 1 or Tier 2) for Microsoft.

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Vendor Account Manager (VAM) (n.)
The Microsoft procurement employee who is in charge of a particular vendor, helping to ensure that their relationship with Microsoft runs smoothly on both sides.

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Women Business Enterprise (WBE) (n.)
The criteria used by the Women's Business Enterprise National Council for defining a business as woman-owned are:
  • Fifty-one percent (51%) ownership by a woman or women.
  • Proof of effective management of the business (operating position, by-laws, hire-fire and other decision-making roles.)
  • Control of the business as evidenced by signature role on loans, leases and contracts.
  • United States Citizenship or United States Resident Alien Status.