A group of 15 major U.S. corporations led by IBM, with the support of the U.S. Small Business Administration (SBA), have launched an initiative aimed at making it easier for small business suppliers to land large corporate contracts via a new website called Supplier Connection. Here, small businesses can register to do business with members of this consortium, a process that effectively connects these businesses with corporate supply chains. Although small businesses will still need to bid on specific vendor contracts, the site means to make it easier for them to find vendor opportunities and also for vendors to find Main Street businesses to meet their needs.

In order to be eligible for this program, small business suppliers must have less than $50M in annual revenue and/or less than 500 employees. During the registration process, they are required to provide detailed information, not only concerning what services or products they offer but also company details and certifications. This, in turn, streamlines the screening process for large corporations, enabling business partnerships to more easily form. In addition, the site will also offer online networking resources, allowing small business firms to potentially partner up and make stronger bids.

The goal of this project is to redirect current corporate supply chain strategies that have traditionally gone overseas to find lower-cost suppliers. By keeping funds within the U.S., backers hope to give a huge boost to the national economy and continue to grow it in a sustainable way.

IBM’s philanthropic group, the International Foundation, is financially supporting the site via a $10 million grant, and the Small Business Administration has sent notices to 50,000 businesses already registered as government contractors. Among the 15 corporate partners are Office Depot, Pfizer, and Caterpillar. Although critics question the long-term impact of such a small group of corporations, together the 15 collectively spend $300 billion a year on goods and services, and backers expect more large corporations to join once the program is fully up and running.

References

Maltby, Emily. “New Site Aims to Relieve Supplier Woes.” The Wall Street Journal. 3/22/12. (4/2/12.). http://online.wsj.com/article/SB10001424052702304636404577296210655034148.html?mod=wsj_nview_latest.

Tozzi, John. “Corporate America to Small Biz: Sell to Us.” Bloomberg Businessweek. 3/22/12. (4/2/12.) http://www.businessweek.com/articles/2012-03-22/corporate-america-to-small-biz-sell-to-us.