Recently, we put a spotlight on the Women-Owned Small Business Certification program (WOSB). For nearly three-quarters of a century, it has been our great privilege at O’Donnell, Ficenec, Wills & Ferdig to support the health of businesses and entrepreneurs of all types and from all walks of life.
Through the decades, it has been rewarding to see more opportunities present themselves for businesses that are led by talented and underrepresented owners, like our many client-partners from across the metro and beyond. And we are happy to share the latest on some of these programs with you. We also welcome the opportunity to discuss the latest on your business, and to partner with you to help your team reach new heights of success.
8(a) Business Development Program
Readers whose eligible firms are owned and managed by individuals within “socially and economically disadvantaged” groups may secure access to federal government set-aside and sole-source contracts. The former refers to competition within the bidding process as being limited to those organizations that are certified in programs such as 8(a) BD. The latter opportunities refer to contracts for qualified, certified businesses that may be awarded without competitive bidding.
In another twist, the 8(a) program is unique in its design. Within the first four years, certified organizations are considered to be in the “developmental stage.” During this time, owners have access to training and other resources, which support their respective “development” and ability to remain competitive in the current marketplace. For a minimum of the next five years, certified firms are characterized as “transitional.” Not unlike other federal contracting programs designed to increase opportunities for underrepresented entrepreneurs, the 8(a) program requires “ongoing maintenance” to remain certified.
You may be eligible for these opportunities if:
Your business is truly characterized as “small” (as designated by the U.S. Small Business Administration). What may be designated as “small” for one industry or sector, may not be for another corner of the marketplace. There is a helpful tool or quiz of sorts available here to help you determine if you qualify as a small venture for the purposes of obtaining coveted contracts through the federal government.
Your business 51%-plus owned and controlled by American citizens within the aforementioned “socially and economically disadvantaged” classifications. The federal government has defined those groups that are characterized as “socially and economically disadvantaged.” The exact verbiage can be found here. In part, the language related to the disadvantaged business status reads: “Unless specifically stated otherwise, the phrase ‘socially and economically disadvantaged individuals’ includes Indian tribes, ANCs, CDCs, and NHOs. A firm may represent that it qualifies as an SDB for any Federal subcontracting program if it believes in good faith that it is owned and controlled by one or more socially and economically disadvantaged individuals.”
Fall within personal net worth, AGI (Adjusted Gross Income), and assets guidelines as defined by the government. Some of these guidelines have changed, as part of broader efforts by the SBA to reportedly simplify the “process for qualified small businesses to participate in the 8(a) BD Program and to pursue contracting opportunities.”
Operate a business for at least two years, as a means of demonstrating a track record of previous success.
A further note on “disadvantaged” status
Additionally, it should be noted that the 8(a) BD Program is easily the most expansive of the programs that are designed to increase the percentage of federal contracts secured by historically under-repped individuals and leadership. The U.S. Department of Transportation, similarly, further clarifies in its FAQs on Disadvantaged Business Enterprises: “The Department presumes certain groups are disadvantaged, including women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans, or other minorities found to be disadvantaged by the U.S. Small Business Administration (SBA).”
The DoT further continues: “Persons who are not members of one of the above groups and own and control their business may also be eligible if they establish their ‘social’ and ‘economic’ disadvantage.” These groups could include individuals with disabilities. They note such groups: “ … have disproportionately low incomes and high rates of unemployment, and that many may be socially and economically disadvantaged. A determination of whether an individual with a disability meets DBE eligibility criteria is made on a case-by-case basis.”
Now, additional programs are available with narrow eligibility requirements. We have listed some of them below. It is worth mentioning that the contracting programs make up a much smaller proportion of the resources available to aid in leveling the playing field and in sustaining the growth of businesses that are “disadvantaged.” There are many more resources available to specific groups, which are worth looking into, and they range from mentorship, to networking, to “technical assistance.” The last item refers to a lot of different things, from a helping hand with marketing to HR support.
And, one need only look to the latest numbers, to see the disparities that persist even though considerable strides are being made in intentionally boosting diversity within industry and entrepreneurial circles. In its most recently available Annual Business Survey findings from 2021 (covering 2020), the U.S. Census Bureau indicated that demographic changes are further driving increases in business ownership. Its summary reads: “Nearly all minority race and ethnicity groups saw population gains. Conversely, the White-alone population declined by 8.6% since 2010. These population changes are also captured in the 2021 ABS.”
The Bureau continues: “The minority race and ethnicity groups saw an increase in business ownership, shown as an increase in the number of non-White and Hispanic-owned firms when comparing to the previous year, while the number of White- and non-Hispanic-owned firms show a decrease when comparing to the 2020 ABS.”
Reportedly, the number of Hispanic-owned businesses grew by more than 8% in 2020, and accounts for approximately 6.5% of all businesses. Hispanics (the definition used by the Bureau and ABS) account for a reported nearly 19% of the total U.S. population. Full findings from the ABS, accounting for other populations and representation in other areas of society, can be found here.
In addition to the 8(a) program, some readers may be eligible for:
Veteran Small Business Certification – The new VetCert reflects the transfer of the certification function for the program from the U.S. Department of Veterans Affairs (VA) to the SBA. Certified small businesses that are owned by veterans are eligible to secure sole-source and set-asides under the VA’s Vets First program, while those certified as “service-disabled veteran-owned small businesses” (SDVOSBs) qualify to compete for sole-source and set-asides spanning the federal government as a whole. The hub for these certifications, as well as for additional veterans’ support services, may be accessed here. For both of these programs, at least 51% of the business must be owned and controlled by one or more veterans. For those claiming SDVOSB eligibility, 51%-plus business ownership/control must be in the hands of one or more veterans who are “service-disabled” by the VA. Furthermore, veterans with “permanent” and “total disability” may still qualify for contracts and other opportunities if they cannot oversee the day-to-day obligations of the business and appoint a spouse or caregiver to aid in a management capacity.
HUBZone – So far, we have explored programs whereby the “social and economic disadvantage” falls upon the individual, the owner and manager with a majority stake in the business and its operations. This program distinguishes from the others, in that it limits competition for certain governmental contracts to businesses within historically disadvantaged areas. The government specifically calls these areas, “Historically Underutilized Business Zones,” which is where the “HUB” in “HUBZone” gets its name. In addition to qualifying for set-aside contracts, HUBZone-certified firms enjoy a 10% price evaluation preference when it comes to bidding (in full/open contract competition situations). At the time of this writing, the HUBZone map used to determine qualifying hubs of underutilization was in the process of being updated. Due to the nature of the program, HUBZone certification very much embodies a living, breathing entity, which evolves to account for the likes of Qualified Disaster Areas or Redesignated Areas. The changes go into effect on July 1, but we encourage you to check out this guide for the latest, and how one’s future eligibility may be affected.
We at OFWF intimately understand the power of such opportunities, as we have supported the sustained growth of businesses across industries, sectors, products and services through the decades. We appreciate the likes of certification as a path to new business growth, and as a path to elevating our diverse communities.