As corporate members and minority businesses invested in the success of the National Minority Supplier Development Council (NMSDC) network, you deserve transparency and accountability in the decisions that affect our shared mission.

The recent communication from the National Office, claiming progress in the affiliate agreement negotiations, misrepresents the reality of these discussions. It omits critical details about the concessions made by affiliates to preserve this network’s integrity and sustainability and glosses over the potentially devastating consequences of their current position to the network.

Key Concessions Made by Affiliates

Financial Sacrifices

• Affiliates conceded to a reduced national corporate dues revenue split from 80-20 to 70-30, costing affiliates an estimated $1.4 million annually.
• Affiliates proposed an independent third-party survey to gather corporate member input on dues distribution, but the National Office declined corporate partner input.

Certification Revenue Loss

• Public assurances from NMSDC that affiliates would remain whole for certification-related revenue for two years post-certification centralization were recently withdrawn without explanation, resulting in an estimated $4.5 million loss for affiliates.

Increased Certification Costs

• The National Office’s certification processing cost estimates have doubled since the initiation of their certification transformation process.
• Affiliates have agreed to give 38% of certification revenue to the National Office, despite earlier estimates that actual processing costs averaged only 22% of certification revenue.

Third-Party Oversight Rejected

• Affiliates proposed a third-party lockbox or fiduciary oversight for transparency in national corporate dues management. The National Office refused, raising concerns about fiscal accountability.

Reduced Agreement Term

• Historically evergreened agreements were reduced to a five-year term at the insistence of the National Office, destabilizing long-term planning.

Division Tactics and Lack of Transparency

• In previous affiliate negotiations, smaller councils often received less favorable terms. To prevent disparities, all 23 affiliates agreed to work together to develop a fair solution.
• Despite collective efforts, the National Office has employed tactics to divide the affiliates, including:
  • Targeting the four representatives leading negotiations.
  • Approaching individual affiliates directly, bypassing the collective stance.
  • Selectively communicating with perceived ally corporations, excluding others from critical discussions.

The Termination Clause: An Existential Threat to Network Stability

The National Office refuses to eliminate the “termination without cause” clause, which:

• Introduces unnecessary risk.
• Undermines affiliate autonomy.
• Grants the National Office unchecked authority to restructure the network without affiliate input.

Affiliates have proposed a “for cause” termination clause to include:

• Clear definitions of breach.
• Mechanisms for remedy.
• Reasonable timelines for resolution.

Misrepresentation of Negotiations

The National Office’s recent communications:

• Omit critical details about affiliate sacrifices.
• Present a misleading narrative of consensus and compromise.
• Ignore the unilateral actions that have eroded trust.

A Call to Action

We urge all stakeholders—corporate members, MBEs, and affiliate leaders—to stand united against this overreach. The termination clause must be revised to align with industry standards, ensuring termination is based solely on breach of agreement.

By securing this amendment, we can protect the services and support essential to the success of MBEs and corporate members.

Join Us

Your support is vital in demanding accountability, fairness, and unity. Let’s uphold the integrity of this network and work toward a resolution that reflects our shared mission.