Microsoft Vendor Program

Microsoft Supplier U.S. Subcontracting Spend (Tier 2) Reporting

Microsoft is committed to helping small and diverse businesses succeed and grow. We purposefully contract as much business as practical to small and diverse organizations, with the goal of contracting at least 23 percent to small businesses. In addition, we have established the following small business diversity subcontracting goals:

Type of small businessTarget percentage of Microsoft subcontracts
HUBZoneThree percent
Minority-ownedFive percent
Service-disabled veteran-ownedThree percent
Veteran-ownedThree percent
Woman-ownedFive percent

Microsoft suppliers are obligated to provide the maximum practical opportunity for the above diverse business concerns to participate in supporting Microsoft contracts.

Required Quarterly Reports

Suppliers must report the amount of money spent on behalf of Microsoft (Tier 2 direct) with minority-owned, woman-owned, or veteran-owned business enterprises (MWVBE), small disadvantaged businesses, and HUBZone small businesses. When direct subcontracting to diverse businesses is not practical, suppliers will allocate and report their overall diverse subcontractor costs (Tier 2 indirect). The costs should be prorated, based on percentage of revenue method.

Quarterly Tier 2 reports are not required if the supplier qualifies as a small business as defined under the current Small Business Administration Table of Size Standards.

Please use the Microsoft Tier 2 report template when preparing your reports. Microsoft must receive your report by the last business day of the month that follows the end of each quarter, as illustrated in the following table.

Microsoft Fiscal Year

QuarterMonthsReport Due
First quarterJuly–SeptemberOctober 31
Second quarterOctober–DecemberJanuary 31
Third quarterJanuary–MarchApril 30
Fourth quarterApril–JuneJuly 31