In short
Supplier diversity programs help large buyers do business with small firms and with businesses owned by groups that have historically won a small share of corporate contracts. Since 2025, US policy has changed, and many companies have renamed or broadened their programs to "supplier inclusion", "supplier development" or small and local supplier programs. Most have not stopped. Supplier.io's 2025 survey of 225 program leaders found that 87% report steady or growing executive support, alongside a 22% reduction in public reporting (Supplier.io).
Whatever a program is called, the practical problem is the same: small, new and local suppliers are hard to find in the usual databases, and harder to assess. That is where AI helps. This guide covers what changed, what the research says, which tool types do what, and a playbook for 2027. It describes policy as the sources state it and is not legal advice.
What changed in 2025–2026
United States: two executive orders
EO 14173 ("Ending Illegal Discrimination and Restoring Merit-Based Opportunity") was signed on 21 January 2025 and published on 31 January 2025. It revoked EO 11246 and requires federal contractors to certify that they do not operate "any programs promoting DEI that violate any applicable Federal anti-discrimination laws" (Federal Register).
EO 14398 ("Addressing DEI Discrimination by Federal Contractors") was signed on 26 March 2026. It defines "racially discriminatory DEI activities" to include disparate treatment based on race or ethnicity in "contracting (e.g., vendor agreements)" (White House). Law firm Reed Smith wrote that "supplier diversity programs that provide preferences based on race or ethnicity may now fall within the Order's definition", noting possible "tension with existing small business subcontracting goals" (Reed Smith, 7 April 2026).
United States: federal small business contracting
The SBA's FY2025 scorecard reports that nearly 28% of federal prime contract dollars went to small businesses, against a statutory goal of 23%. Small disadvantaged businesses received 11.6% of prime dollars, down from 12.27% in FY2024, which the SBA calls the first decrease in 10 years. 8(a) firms received 3.7% of prime contracts (SBA, 25 June 2026). Washington Technology adds that the number of small business contractors fell 6.9% to 56,725, that the SBA's 8(a) audit has removed around 800 companies, and that woman-owned firms received 4.2% against a 5% goal (Washington Technology, 26 June 2026).
Companies renamed and broadened programs
Constellation Brands CEO Bill Newlands said its "supplier diversity" program had been renamed the "supplier inclusion" program (WHEC).
Kohl's broadened its program to add qualified small businesses, including diverse small businesses (FashionNetwork, 16 March 2025).
Accenture now runs a "Global Supplier Development Program", which had graduated more than 290 suppliers by the end of fiscal 2025 (Accenture).
European Union: a proposed procurement act
On 9 September 2026 the European Commission proposed an EU Public Procurement Act that would merge the three core procurement directives into one directly applicable regulation. Under the proposal, quality criteria, which can include social and environmental factors, "would generally need to account for at least 30% of the evaluation". Jones Day expects adoption "unlikely before late 2027 at the earliest" (Jones Day).
What the research says AI can do
Six process changes
The strongest academic evidence comes from Deepak Ram Asokan, Christopher M. Smith and Fahian Anisul Huq at Alliance Manchester Business School. Their case study of a global energy company and two of its technology providers (39 interviews) found that AI and big data analytics improved supplier diversity, equity and inclusion outcomes through six process changes: supplier prioritisation, identification, standardisation, onboarding and engagement, development, and performance tracking (IJOPM, 2026). Discovery is only one of the six.
Discovery widens the pool, but needs review
Small suppliers are underrepresented in commercial data. A 2026 preprint by Yijiashun Qi, Yijiazhen Qi and Tanmay Wagh finds that existing business databases have "substantial coverage gaps", particularly for sub-tier suppliers, which matters for SMEs in specialised sectors. Their language-model and knowledge-graph crawler achieved the best precision of the methods tested (0.165) with 32% fewer pages (arXiv 2602.24262). A precision of 0.165 means most candidates still needed to be ruled out. AI makes the long list longer and cheaper to build; people still decide who belongs on the short list.
Writing in DiversityPlus, Shaniqua Thomas reports that TealBook CTO Arnold Liwanag sees AI as critical to the search for diverse suppliers, because it can search the web at scale and build more accurate supplier profiles. The same article cautions that "systemic bias is embedded in many raw data sources" (DiversityPlus). Consultancy Griffin & Strong makes the same point: a system that learns from past procurement decisions "could repeat patterns that already exist in historical data", so decisions should include human review (Griffin & Strong, 31 August 2026).
Where programs stand
Supplier.io's 2025 State of Supplier Diversity report gives the clearest picture (Supplier.io release; report page):
Focus is shifting to small suppliers. 46% expect to increase small-supplier sourcing, and 38% plan to deepen their focus on small suppliers.
Outlook is mixed. For 2026, 50.6% expected the same executive support, 36.3% less and 13.1% more; 48% had updated program messaging (Supply Chain Xchange, 10 December 2025).
Data is the bottleneck. 33% report more focus on data quality, 28.7% are prioritising better technology, and teams relying on onboarding data or manual processes report 40% more data challenges. Companies with no certification council membership rose by 74%, so more supplier attributes need checking from other sources.
The measures are changing. Teams that track business performance report RFP wins (46%), economic impact (43%) and cost savings (40%); 43% measure jobs and wages.
Neeraj Shah, CEO of Supplier.io, summed up the findings: "Our research shows leaders aren't retreating in the face of change." Vendors also make forecasts. Fairmarkit CEO Kevin Frechette, asked where AI in procurement will be in five years, predicted that AI "will enable more inclusive opportunities, such as promoting fair competition among suppliers and amplifying minority-owned businesses" (CPO Rising, 5 March 2025).
What practitioners say
Since 2025 practitioners have mostly framed programs as business strategy rather than ending them.
"Supplier diversity is not DEI, and DEI is not supplier diversity," said Ralph G. Moore, president and founder of supplier diversity consultancy Ralph G. Moore Associates. His colleague Reginald K. Layton, the firm's CTO, described the goal as "expanding the supplier selection process, increasing competition" (SupplyChainBrain, 17 March 2025).
"I think this is a real leadership opportunity for procurement to step up," said Kelly Barner, co-founder of Art of Procurement, adding that "this is an important conversation for us to have internally before something happens" (Art of Procurement, 9 March 2025).
In an Art of Procurement LinkedIn poll on how a change in corporate DEI policy would affect supplier diversity work, 45% said it would change nothing, nearly 30% would keep tracking but stop advocating, 20% would look to the C-suite for guidance and 5% would stop. It is one self-selected sample (same source).
Tool types for supplier diversity and inclusion programs
Match the category to the job; most programs use more than one.
Category | What it answers | Examples | Watch for |
|---|---|---|---|
Supplier diversity data and reporting | Which of our suppliers hold which certifications or small-business status, and what is our spend with them | Supplier.io, TealBook | How often certification data is refreshed, and how self-reported attributes are checked |
AI supplier discovery and vetting | Who else can make or deliver this, including small, local and new firms we have never used | Speya: describe the need in plain language; AI agents search millions of supplier profiles across 250+ data sources and return AI-vetted shortlists with sources beside every name | Whether every capability and status claim has a source you can check |
Tail-spend and sourcing-event tools | How do we get more small suppliers into competitive bids | Fairmarkit and similar | Needs a qualified supplier list first |
Onboarding and supplier management | How do new suppliers get set up, developed and tracked | Source-to-pay and supplier management suites | Onboarding forms are a weak data source on their own (see the 40% figure above) |
A 2027 playbook
Define the program in writing. Write down which supplier categories count (small, local, veteran-owned, certified diverse or others) and which rules apply in each country you buy in. Check the US federal contractor requirements with counsel.
Fix the data first. Clean the supplier master, and check certification and size status against the issuing body or registry rather than onboarding forms.
Use AI where the gap is. Run discovery for categories where your current supplier list is thin, and ask for capability evidence, not only labels.
Assess on capability. Score every supplier, new or incumbent, on the same evidence: capacity, quality certifications, financial health, references.
Keep a human sign-off. The precision figures and the bias warnings above point the same way: AI builds the long list and the evidence file, and people decide.
Measure business outcomes. Track RFP wins, cost, resilience and local economic impact alongside spend, as the programs in Supplier.io's survey increasingly do.
Events to watch in 2027
NMSDC Annual Conference & Exchange, 25–28 October 2026, Los Angeles. Includes "The Future of Supplier Development: From Commitment to Competitive Advantage" with NMSDC CEO Don Cravins Jr. and Merck CPO Susanna Webber (agenda).
ProcureCon West, 7–10 March 2027, Las Vegas (agenda).
World Procurement Congress, 18–20 May 2027, London (Procurement Leaders).
ISM World 2027, May 2027, Washington DC area (ISM).
Frequently Asked Questions
Is supplier diversity still allowed in the US?
The executive orders target DEI activities that involve disparate treatment based on race or ethnicity, including in vendor agreements. Federal small business goals still apply: the SBA reported exceeding the 23% small business goal in FY2025. How a specific program is affected depends on its design, so check with counsel. This article is not legal advice.
What is the difference between supplier diversity and supplier inclusion?
Usage varies by company. Classic supplier diversity programs focus on certified diverse-owned businesses. Programs renamed "supplier inclusion" or "supplier development" since 2025 often cover a broader group, such as small, local and veteran-owned suppliers. Supplier.io found 48% of programs updated their messaging, including how they define these groups.
Can AI check a supplier's certification?
AI can find supplier profiles, flag missing, stale or conflicting data, and point to the record that should hold the answer. The certification itself should be confirmed against the issuing body's own records before a contract decision.
Does AI introduce bias into supplier selection?
It can. A model trained on past procurement decisions can repeat the patterns in that history. Use AI to widen the search, score every supplier on the same evidence, and keep a person accountable for the final decision.
Sources
Every source above is linked inline. Key references: Federal Register, EO 14173 (2025); White House, EO 14398 (2026); Reed Smith (April 2026); SBA FY2025 scorecard (June 2026); Washington Technology (June 2026); Jones Day on the EU Public Procurement Act (2026); Supplier.io 2025 State of Supplier Diversity report; Supply Chain Xchange (December 2025); Asokan, Smith & Huq, IJOPM (2026); Qi, Qi & Wagh, arXiv (2026); DiversityPlus; Griffin & Strong (August 2026); CPO Rising (March 2025); SupplyChainBrain (March 2025); Art of Procurement (March 2025); Accenture; WHEC; FashionNetwork.