CPSM Essentials in Supplier Diversity 2 — Questions and Answers
Question 1: Which federal regulation requires federal contractors with contracts over $750,000 to submit a Subcontracting Plan for supplier diversity?
- FAR 52.219-9 (Correct answer)
- FAR 52.222-26
- FAR 52.203-13
- FAR 52.215-2
Correct answer: FAR 52.219-9
FAR 52.219-9 mandates subcontracting plans that set goals for small and disadvantaged business utilization in federal contracts exceeding $750,000.
Question 2: A company is classified as a Disadvantaged Business Enterprise (DBE) under the DOT program. What is the primary eligibility requirement beyond being socially and economically disadvantaged?
- Personal net worth of the owner must not exceed $1.32 million (Correct answer)
- Annual revenues must not exceed $50 million
- The business must be at least 5 years old
- At least 75% of employees must be from disadvantaged groups
Correct answer: Personal net worth of the owner must not exceed $1.32 million
The DOT DBE program caps the personal net worth of the disadvantaged owner at $1.32 million (excluding business equity and primary residence) to ensure economic disadvantage.
Question 3: When evaluating a supplier diversity program's effectiveness, which metric best measures SECOND-TIER impact?
- Spend by prime contractors with diverse subcontractors (Correct answer)
- Total dollars awarded directly to diverse firms
- Number of diverse suppliers in the database
- Percentage of RFPs sent to diverse suppliers
Correct answer: Spend by prime contractors with diverse subcontractors
Second-tier spend measures how much prime (first-tier) contractors spend with diverse businesses in their own supply chains, extending diversity beyond direct purchasing.
Question 4: A Veteran-Owned Small Business (VOSB) seeking federal set-aside contracts must be verified by which agency?
- SBA (Small Business Administration)
- DVA (Department of Veterans Affairs) (Correct answer)
- DOD (Department of Defense)
- GSA (General Services Administration)
Correct answer: DVA (Department of Veterans Affairs)
The VA's Center for Verification and Evaluation (CVE) verifies Veteran-Owned and Service-Disabled Veteran-Owned Small Businesses for participation in VA set-aside programs.
Question 5: Which concept describes the practice of tracking and reporting how much of your direct suppliers' spend goes to diverse businesses?
- Tier 2 reporting (Correct answer)
- Spend analysis
- Supplier scorecarding
- Procurement benchmarking
Correct answer: Tier 2 reporting
Tier 2 reporting captures the diverse spend of your direct (Tier 1) suppliers, providing visibility into the broader supply chain's diversity performance.
Question 6: An organization wants to ensure its supplier diversity program is not tokenistic. Which approach best demonstrates STRATEGIC integration?
- Linking supplier diversity goals to executive compensation (Correct answer)
- Maintaining a list of certified diverse suppliers
- Sending annual diversity surveys to all suppliers
- Hosting one supplier diversity fair per year
Correct answer: Linking supplier diversity goals to executive compensation
Tying supplier diversity performance to executive compensation embeds accountability at the highest organizational level, signaling genuine strategic commitment.
Question 7: Under SBA regulations, what is the maximum number of employees allowed for a manufacturing company to qualify as a small business (general rule)?
- 500 employees (Correct answer)
- 250 employees
- 750 employees
- 1,000 employees
Correct answer: 500 employees
The SBA's general size standard for manufacturing industries is 500 employees, though specific NAICS codes may have different thresholds.
CPSM Essentials in Supplier Diversity 2
Which federal regulation requires federal contractors with contracts over $750,000 to submit a Subcontracting Plan for supplier diversity?