GlaxoSmithKline and the Congressional Black Caucus Foundation Join Forces to Improve Opportunities for Small Disadvantaged Businesses
Washington, DC (Wednesday, November 16, 2005)— GlaxoSmithKline [GSK:NYSE] and the Congressional Black Caucus Foundation (CBCF) are expanding their partnership to increase the ability of Small Disadvantaged Businesses (SDBs) to compete in a 21st century global economy.
GSK is donating $500,000 to the Foundation over five years to spur growth among SDBs through increased training and business opportunities. GSK and the CBCF have established a new Supplier Business Initiative Advisory Council to advise and direct the project, which will include a study of existing USpolicy designed to encourage success among these businesses. The goal of the study will be to identify barriers to the meaningful participation of small disadvantaged businesses in the SBA certification program, and to determine if policy and regulatory reforms are needed to remove those barriers.
“The GlaxoSmithKline and Congressional Black Caucus Foundation Supplier Business Initiative is an important program in helping to create opportunities for minority small businesses where very few previously existed,” noted CBC Chairman Melvin L. Watt (D-N.C.). “The end goal of the program is to increase the number of qualified minority businesses in the Small Business Administration certification program, which would mean much-needed access to more business opportunities to enhance revenue and capacity.”
“We make our medicines available to a diverse population, and we believe it is important to purchase supporting goods and services from these same groups,” said Chris Viehbacher, President of US Pharmaceuticals for GSK. “We include small, diverse companies in our selection process when contracts go out for bid. Yet disparities in business development are making it difficult for us to meet our requirements under the law.”
Viehbacher continued: “Part of our effort will be to increase the ability of these businesses to compete effectively for contracts. “That will increase GSK’s ability to successfully operate in a growing global environment, but with support from other corporations, we can also help empower disadvantaged businesses across the country.”
Said Congressman William Jefferson, CBCF Chair, “We share GSK’s vision in wanting to see a level playing field in the contract bidding process. Since we already enjoy a longstanding partnership with GSK, we look forward to working with them toward increasing opportunities for small disadvantaged businesses.”
The SBA’s Small Disadvantaged Business (SDB) Certification program was established in 1997 to enhance federal purchases from socially or economically disadvantaged owners of small businesses. In 1997, the SBA projected 35,000 SDB’s would be certified for program participation, but only 10,000 were actually certified. The guidelines of the program were modified in 1998 to ensure that benefits used in federal procurement programs are fair and effective and conform with the US Supreme Court 1995 Adarand court decision on affirmative action.
Under the program, minority businesses must gain a SDB certification to compete for contracts with government agencies and corporations. At the same time, government agencies and corporations are required to award 5 percent on average of their business contracts to SDB-certified businesses. However, the number of companies that apply for and successfully receive certification has been limited. Consequently, the pool of qualified SDB applicants is limited, undermining the ability of contracting organizations to meet the diversity goals established under the law.
While there has been significant progress of fostering minorities, including but not limited to, African Americans, Asian Americans and Hispanic Americans, a gap still remains. Minority-owned firms account for only 2.7 percent of total U.S.gross revenue from all firms. As reported in the SBA Minorities in Business Report (2001), “ African Americans are “the least represented in the U.S. business sector, as seen in measures such as the number of Black-owned businesses, African Americans’ self-employment and business participation rates, and the dollar value of Black-owned business receipts per Black population.”
Ideas for updating the program so it positions SDBs effectively in the current business environment may include further revisions to certification requirements, improved communications about the availability of the program and its requirements, and assistance to SDB’s in building the expertise needed to successfully compete for business. Other factors such as eligibility limits on business size and net worth of business owners may also artificially eliminate qualified businesses from participating in the program and may require further evaluation.
In addition to studying current challenges to the program in today’s business environment, the GlaxoSmithKline and CBC Foundation partnership will provide networking opportunities and develop partnerships between major corporations and Minority Business Enterprises (MBE) that can help small businesses develop the capacity to meet corporate goals, and evolve over time into more independently-functioning and successful businesses.
About the Congressional Black Caucus Foundation
The Congressional Black Caucus Foundation, Inc. (CBCF) was established in 1976 as a nonpartisan, nonprofit, public policy, research and education institute. The purpose of the Foundation is to improve the socio-economic circumstances of African Americans and other underserved communities.
GSK has emerged as one of the Congressional Black Caucus Foundation’s lead sponsors through support of such programs like the Vivien Thomas Scholarship Program, which provides scholarships to 10 students who are pursuing careers in science and medicine. This support totaled $500,000 over four years.
GlaxoSmithKline is one of the world’s leading research-based pharmaceutical and healthcare companies, and is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For more information, visit www.gsk.com.
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