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Minority-Owned Business Enterprises

The great thing about doing business with the government is that there are programs and practices in place meant to give everyone a fair shot. If you have a small minority-owned business, taking advantage of these programs could open up incredible opportunities.

The last few years have been great for Minority Business Enterprises (MBEs), who now have comparable sales and procurement success in government contracting to their non-minority peers. This progress has come at a cost, however – on average, minority-owned businesses invest more and take longer to win contracts. Additionally, the percentage of federal contracting money going to black-owned and Hispanic-owned businesses is proportionally small compared to each group’s share of the population.

If all this sounds frustrating, keep reading. The government wants to diversify their contract awardees. To make sure they do, they’ve created a system of incentives and setasides, all designed to help disadvantaged businesses compete in the federal arena. And this system is working: In FY2015, the U.S. Small Business Association (SBA) gave the government an A rating for its small business procurement, which included a full 10% of prime contract money going to disadvantaged small businesses.

The biggest question for any minority-owned business is: How do I get a piece of the pie?

 

Before you do anything:

Make sure your business is registered in the government’s System of Award Management (SAM) along with the owner’s socio-economic status. Contracting officers want to hire minorities, and making sure you’re registered as a minority-owned business in the SAM is the best and easiest way to advertise yourself.

Your next step as a minority owned business is to look into the many programs and/or set asides you may be eligible for.

 

8(a) Business Development Program

The SBA runs the 8(a) program to promote growth and development in small businesses owned by disadvantaged individuals. The nine-year program requires an application process and annual reviews, but the benefits it provides can make a huge difference.

Is my business eligible?

The 8a program is reserved for small businesses owned and controlled at least 51% by people who are “socially and economically disadvantaged.” Its focus is business development, helping these companies to grow, gain experience, and become competitive.

The SBA presumes that certain minority groups are “socially disadvantaged,” including African-Americans, Hispanic Americans, Asian Pacific and Subcontinent Asian Americans, and Native Americans. If you are disadvantaged in the business world for another distinguishing feature (such as gender or a handicap) you can also be considered.

“Economically disadvantaged” individuals must submit a narrative statement outline their disadvantage, and make sure their income doesn’t exceed certain thresholds. To qualify, you must be both socially and economically disadvantaged according to SBA standards.

What can 8(a) offer me?

Single-source Contracts and Set-Asides: Participants can receive sole-source contracts up to $4 million for goods and services, and $6.5 million for manufacturing. 8(a) companies also have the ability to join forces and bid on contracts together in order to overcome “contract bundling” (when multiple contracts are combined).

Mentor-Protégé Program: Small 8(a) participants can be assigned mentors (larger or more developed companies) to provide valuable training, expertise, and even assistance with contracting opportunities and competence building! Mentors can even invest in the protégé company, owning up to 40% and helping it build capital.

 

HUBZone Program

The Historically Underutilized Business Zone program (HUBZone) provides special contracting opportunities for businesses located in urban and rural areas with less historical economic development.

Although not specifically for minorities, many minority-owned businesses may find that they are already located in a HUBZone. To find out if yours is, check out SBA’s HUBZone map. HUBZone benefits include competitive and sole-source contracting, as well as 10% price evaluation preference.

A word of caution: The government’s goal is to award 3% of prime contracting dollars to companies in HUBZones. However, according to the SBA’s scorecards, the government consistently falls short: in both 2014 and 2015, HUBZone allocation was only at 1.82%. This, combined with the many hoops businesses must jump through to receive HUBZone status, can make the program high-risk and low-reward for some businesses.

The Fiscal Year 2015 SBA Scorecard shows the extent to which the government met its procurement goals for setaside programs in 2015. Knowing which setasides to target is crucial for a small minority-owned business.

The Small Business Association’s scorecard for 2015 shows that HUBZone government-wide goals are not being met. Courtesy of the Small Business Association

The best way to find out if HUBZone is right for your business is to do your research: a tool like EZGovOpps can help you evaluate the number of HUBZone opportunities for your NAICS Codes.

For in-depth information about the program and its requirements, read our HUBZone post!

 

Other programs for a minority-owned business to look at:

Disadvantaged Business Enterprise (DBE) Program: The Department of Transportation runs its own program, DBE, to “remedy ongoing discrimination.” Federal, state and local transportation projects are required to establish annual DBE contracting and subcontracting goals. Companies can apply for DBE status through their state departments of transportation.

Women Owned Small Business (WOSB) Program: Another program run through the SBA, the WOSB Program allows economically disadvantaged women-owned businesses to access set-asides. Businesses can self-certify as WOSBs. If you have a woman minority run business, adding the WOSB certification could allow you to access more set-asides and benefits.

 

Set Aside Opportunities are only worthwhile if you know about them!

Finding upcoming opportunities that are set asides for programs you qualify for (or are in the process of gaining certification for) couldn’t be easier. Simply visit EZGovOpps.com and sign up for a free trial. Once you are signed in, visit the search tab and locate the Contracts and Solicitations search options.

To search for predicted upcoming re-compete contracts with a particular set-aside, use the Contracts search, set a Forecast Range from today to a year from now (or parameters of your choice), and under Advanced Options select the set-aside status, then click the search button. You will get a fresh, up-to-date list of all predicted upcoming re-compete contracts for your company to target.

To search for Solicitations (opportunities just “hitting the street”), is very similar. Select the Solicitations search, set a response date from today to a year from now (or parameters of your choice), and under Advanced Options select the set-aside status, then click the search button. You will get a fresh, up-to-date list of all currently listed solicitations with a response date within the next year.

Don’t have time to run a search every day to see what new opportunities are coming out? No problem, you can set up “My Profile” to look automatically for you. Visit the Welcome Videos link on the left hand side of the screen, then select the second video, which will teach you how to set up your personalized profile. You’ll also find additional info on Contracts Search, Solicitations Search, and all the deep analytical tools available only at EZGovOpps, all right at your fingertips.

Thanks for reading and we wish you much success moving forward in the federal space.

Don’t forget to view our full GovCon News section for more intel.

Handy Links with Additional Info

http://www.mbda.gov/main/business-certification

https://www.usaspending.gov/Pages/AdvancedSearch.aspx?sub=y&ST=C,G,L,O&FY=2015&A=0&SS=USA&CT=MOB

http://www.huffingtonpost.com/helen-callier/the-top-three-biggest-mis_b_5515912.html

http://www.inc.com/guides/2010/05/minority-owned-business-certification.html

 

Published by Libby Solomon on September 2, 2016

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