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Essentials in Supplier Diversity Flashcards

7 cards from real CPSM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Essentials in Supplier Diversity flashcards as text

  1. A Historically Underutilized Business Zone (HUBZone) certified firm loses its eligibility when which condition occurs?

    Answer: The principal office relocates out of a designated HUBZone

    HUBZone eligibility requires the principal office to be located in a designated HUBZone, so relocation out of the zone triggers loss of certification.

  2. An organization wants to reduce supplier diversity fraud risk. Which control is MOST effective?

    Answer: Requiring third-party certifications from recognized bodies

    Third-party certifications from bodies like NMSDC or WBENC involve rigorous vetting of ownership, control, and operation, providing far stronger fraud protection than self-certification.

  3. In supplier diversity, 'fronting' refers to which prohibited practice?

    Answer: A non-diverse firm using a certified diverse firm as a pass-through to win contracts

    Fronting occurs when a large non-diverse company uses a certified diverse firm as a nominal prime contractor while performing most of the work itself, violating the intent of diversity programs.

  4. Which of the following is an example of PROACTIVE supplier diversity outreach?

    Answer: Attending NMSDC regional conferences to meet minority suppliers before an RFP is issued

    Proactive outreach involves actively seeking diverse suppliers before a need arises, such as networking at industry events, rather than waiting for suppliers to come to you.

  5. What does the term 'intersectionality' mean in the context of supplier diversity?

    Answer: A supplier that qualifies under multiple diversity categories simultaneously

    Intersectionality in supplier diversity recognizes that a business owner may belong to multiple underrepresented groups (e.g., a woman of color who is also a veteran), qualifying them under several diversity designations.

  6. A corporation reports $5M in diverse spend, but $3M of that is with a single large minority-owned conglomerate. What risk does this concentration represent?

    Answer: Supply chain concentration risk and potential token diversity rather than true inclusivity

    Heavy concentration in one or few diverse suppliers creates supply chain risk and may reflect superficial compliance rather than genuine economic inclusion of smaller, emerging diverse businesses.

  7. Which statement BEST describes the difference between an 'affirmative action' approach and a 'supplier diversity' approach in procurement?

    Answer: Affirmative action is legally mandated; supplier diversity is a voluntary business strategy focused on competitive advantage

    Affirmative action is rooted in legal compliance requirements, while modern supplier diversity programs are strategic business initiatives driven by innovation, market access, and competitive differentiation.