The federal government, local governments and large corporations all want to do business with minority owned businesses. There are a number of reasons, but primary among them are 1) Corporate America understands that minority consumers want to buy from companies that do business with minority-owned companies 2) Government knows that the growth of minority business is important to the growth and stability of the overall economy.
To meet their minority business goals, government and corporations look for capable minority suppliers through programs that have a formal certification process. If you are not certified, you can miss out on some great opportunities, such as matchmaking opportunities and opportunities to bid on contracts created specifically for small disadvantaged businesses.
What is a MBE/WBE?
An MBE (Minority Business Enterprise) or WBE (Woman-Owned Business Enterprise) is a business that is at least 51% owned by a minority or woman or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals. “Minority” in this case is defined as United States citizens who are Asian, Black, Hispanic or Native American.
Why Get Certified?
Unfortunately, getting a MBE/WBE certification doesn’t automatically mean you’re going to get new contracts. You still have to demonstrate your ability to fulfill the contract and fulfill it at the right price. But it can provide you with the thing that’s important to every entrepreneur…ACCESS. Here are a few ways MBE/WBE certification can help you get access to contracts.
Set-Aside’s- Set-asides award certain acquisitions exclusively to small business concerns. There are two types of set-asides: full and partial. Full set-aside’s mean the entire contract must be awarded to a small business; a partial set-aside means a certain percentage of the contract dollars must be spent with a small disadvantaged business. If you are not certified, you can’t compete for those contracts.
Price Evaluation Preference- For government contracts being offered under full and open competition (that means anybody can compete, even the “Big Boys”) it is still possible for the certified small business to get a price evaluation preference. Price Evaluation Preference allows a qualified firm to win a competitive procurement even if its bid is up to 10% higher than an equally qualified large firm.
Networking Opportunities- Certification as an MBE/WBE gives you an opportunity to attend networking events that help you build relationships with corporate and government buyers. Some of these events are match-making events that bring out buyers looking to fill a need right now.
Inclusion/Access Into Database- Certification in one of these programs usually means you’ll be included in, and also have access to, a database that lists MBE’s and contacts for the companies/agencies that are looking to do business with them.
Which Certification Do I Need?
When I first started doing work relating to minority supplier diversity, I thought the certifications were one size fits all. But in reality, there are a number of different certifications- and which one you need is dependent upon who your target customer is. Is your target customer federal government, state government, local government or corporations? Each group has different certifications. Here are a few of the most popular.
Starting in October 2008, small businesses are able to self-represent their status as a small disadvantaged business (SDB). They do not have to submit an application to the Small Business Association (SBA) for SDB status. To self-represent as an SDB, all eligible firms have to do is register their business in the System for Award Management. No fee required and no documents needed, but if your status is ever challenged you need to be able to prove your eligibility.
SBA 8(A) program
The 8(A) program, run by the Small Business Administration (SBA), was designed to help small, disadvantaged businesses compete in the marketplace. The 8(A) program is a more comprehensive program providing specialized assistance to selected firms.
Minority Supplier Development Council Certification
NMSDC Certification is the most recognized standard for certifying minority-owned businesses by corporate America. This is the one you need if you want to target corporations instead of government agencies. Certification for this program is handled by regional affiliates. The Maryland/DC/Northern Virginia region is covered by the Capital Region Minority Development Council. You can find more information about their process here.
State DOT Certification
The U.S. Department of Transportation’s DBE (disadvantaged business enterprise) program provides an opportunity for MBEs to participate in state and local procurement. Although this program is administered by the state’s transportation department, it covers procurements for all state agencies. For more information about Maryland’s program follow this link. For any other state a quick google search for “[State's Name] MBE Certification” should get you where you need to go.
Local Government Certification
Many local and municipal governments also have their own procurement programs that you can take advantage of. Here are a few links to some of the programs in Maryland:
What Do I Need to Get Certified?
There are companies that can help you get certified, but if you are like many entrepreneurs with more time than money, I would suggest doing this yourself. The applications are pretty straightforward and you would have to gather the required documents for your preparation company anyway. Although each program may have some different requirements, I’ve listed some of the things you will probably need to gather for your certification below.Please note this is not a comprehensive list of supporting documents but it will help you gather the documents you need before you apply.
- Your firm’s signed and dated federal tax returns over the past three years (if your company is less than three years old, your personal tax returns should suffice)
- Your firm’s financial statements for the past three years
- Governing documents, signed by the principals
- Bylaws, operating agreements, partnership agreements
- Meeting minutes
- Stock certificates and ledgers
- For majority owners and firm managers:
So what are you waiting for? Go get what’s yours! And if you still have questions feel free to contact me (kendrick.staley(at)civicgrind.com)