HS2 contracts can be won or lost on a supplier’s diversity performance ©HS2/Grimshaw
HS2 contracts can be won or lost on a supplier’s diversity performance ©HS2/Grimshaw

Supplier diversity ‘fundamental’ to HS2 success

28 September 2018

Companies bidding for work on HS2 will miss out on contracts if they don’t meet diversity criteria, the project’s head of equality, diversity and inclusion (EDI) has said.

Mark Lomas, head of EDI, said the margin by which HS2 contracts were won or lost meant companies could not afford to lose marks through poor supplier diversity.

Lomas said: “I could give you lots of moral stories about how [diversity] is going to benefit but the fact is the difference between winning and coming second in a large contract at HS2 is 3%. The weighting on EDI on skills is way above 3%, so if you don’t do it you’re not going to win.”

He added suppliers that embraced supplier diversity found it helped them win other business. “One of our best suppliers has used the evidence they’ve amassed around EDI for HS2 to win over £100m of extra business,” he said.

Speaking at the MSDUK conference in Birmingham, Lomas said supplier diversity was a “fundamental part of the success” of HS2 because of the impact its construction would have on those on the planned route. “If you’re born in certain areas of the UK you will actually grow up next to an HS2 construction site potentially for the next 10-12-15 years,” he said.

“If disruption and impact is all you get, but you don’t get opportunities – whether that be business or employment – then actually we’ve not done our jobs well.”

Getting the UK’s infrastructure market to embrace diversity was not without challenges. Many came into the tendering process with a locked supply chain, said Lomas, so HS2’s bidding processes forced potential suppliers to demonstrate how they were going to embed and monitor diversity.

As the UK has no legislation mandating supplier diversity, Lomas said it was important for HS2 to contractually enforce the standards it wanted.

“Within our ITT documents we’re very specific that we expect them to engage with organisations like MSDUK, WeConnect, Social Enterprise UK and others, primarily because we don’t have the legislation which mandates it so we make it very clear what we expect,” said Lomas.

HS2 asks suppliers to report on their spend with diverse suppliers – including women, black and ethnic minority, LGBT, disabled-owned SMEs and enterprises – and what their representation is in their supply chains specifically for HS2 contracts. “Not what they do across the whole organisation because you can fudge it very easily. I want to know what you’re doing on the HS2 contract,” said Lomas.

Lomas has also asked HS2’s supply chain to report at what stage of the tender process SMEs and diverse businesses drop out, “much like you would measure diversity in recruitment”, to build a better picture of where the barriers are for these firms and to develop a supplier diversity capabilities plan.

“There’s lots of anecdotal evidence, but nothing statistical that says, ‘This is where the barriers are,’ so we’re hoping to get to that,” he said. “In a couple of years I fully expect us to have a body of evidence that allows us demonstrate why we might want to do something further.”

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