The U.S. Small Business Administration has a number of programs in place to help level the playing field for business owners when applying for federal contracts. If you are the primary owner and controller of a small business and are also a woman, a service-disabled veteran, or qualify as socially and economically disadvantaged, you’re probably eligible to participate in one or more of these programs.
To qualify, you would need to own at least 51 percent of your business and control the management of your company. If your business is owned in a partnership, the same percentages apply: 51 percent of the business must be owned and controlled by people who qualify for one or more of these programs.
An additional SBA program called HUBZone helps small businesses in both urban and rural communities gain preferential access to contracts if they’re located in what’s termed Historically Underutilized Business Zones.
Does applying for these programs involve certification paperwork? Of course! But each brings with it significant opportunities. The government’s goal for these four groups, in terms of allocations for federal contracts, amount to 16 percent of all federal contract dollars.
To learn more about each specific program, read on:
The 8(a) Business Development Program
The SBA’s 8(a) Business Development Program targets small businesses that are owned and run by socially and economically disadvantaged entrepreneurs. The federal government aims to have at least five percent of government contracts going to this program. Established in 2008, its goal is to help these business owners “gain access to the economic mainstream of American society.” The designation “socially and economically disadvantaged” doesn’t apply solely to people who are minorities, although this is frequently the case. For example, you could be socially disadvantaged by virtue of your race, your gender preference, and/or a disability.
And keep in mind, many states and cities also have minority-owned business programs designed to award contracts preferentially; these are typically referred to as Minority Business Enterprise (MBE) programs.
Here are a few key benefits of the 8(a) Program:
- It is set up to help participants “take advantage of specialized business training, counseling, marketing assistance, and high-level executive development provided by SBA” and its partners. Other benefits include possible eligibility for access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance.
- Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.
- The 8(a) Program offers what’s called the Mentor-Protégé Program. Eligible participants are paired with an experienced mentor who can help provide technical and management assistance; mentors may help protégés raise capital; and mentors and protégés can also compete together on federal government contracts.
Women-Owned Small Businesses
The federal government has the goal of allocating at least five percent of all federal contract dollars to businesses owned and run by women. Two programs are involved:
- Women-owned small businesses (WOSBs) and
- Economically disadvantaged women-owned small businesses (EDWOSBs)
Through these programs, contracting officers are authorized to set aside certain federal contracts for these qualified businesses.
Sound like a great opportunity? It can be, but keep in mind, the certification process for these programs is onerous. In an Inc. article, “How to Become a Certified Woman-Owned Business,” Janet Harris-Lange, president of The National Women Business Owners’ Corporation (NWBOC), says, “A lot of people want to scream when they are going through it, but they always end up happy that they got certified.” Among the requirements: U.S. citizenship, and majority ownership and control.
For more information on WOSBs and EDWOSBs, start with SBA’s web section on women-owned small businesses.
Service-Disabled Veteran-Owned Small Businesses
The Veterans Entrepreneurship and Small Business Development Act of 1999 established the goal of three percent of all prime and subprime federal government contracts to be awarded to small businesses that are at least 51 percent owned and controlled by service-disabled veterans.
A further act passed by Congress, the Veterans Benefits Act of 2003, established a procurement program for veterans disabled while serving their country; this program provides for restrictions on competition for certain contracts to Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC).
To be eligible for this program, business owners must have a service-connected disability that has been certified by the Department of Veterans Affairs or the Department of Defense.
Historically Underutilized Business Zones
The point of the HUBZone program is to encourage economic development in historically underutilized and distressed business zones through providing small business owners located in these areas with access to more federal contracting opportunities.
This program, established by law in 1997, is run by the SBA, which encourages economic development in these zones through establishing preferential treatment in awarding contracts. The program’s benefits for certified companies include competitive and sole-source contracting, a 10-percent price evaluation preference in open contract competitions, and subcontracting opportunities. The federal government’s goal is to award three percent of all federal prime contract dollars to HUBZone-certified small businesses.
To qualify, your business must meet these eligibility requirements:
- Be a small business by SBA standards
- Be owned and controlled at least 51 percent by U.S. citizens, a Community Development Corporation, an agricultural cooperative, or a Native American
- Have its principal office located within a HUBZone, which includes Tribal Land and military facilities closed by the Base Realignment and Closure Act
- At least 35 percent of your employees must reside in a HUBZone
