For a vendor, being certified as a small business, MWBE, VBE or other special designation has many benefits when it comes to bidding on government contracts. When a government agency posts a bid, they are obliged to award 23% of all contracting dollars to small businesses; in addition, they have award sub-goals that they must meet for each small business category. For example, women-owned and small disadvantaged businesses must each be awarded 5% of a contract’s total dollar value, while Service Disabled Veteran-owned and HUBZone businesses must each be awarded 3% of the total contract.
Government agencies also administer what are called “Set-Asides”, contracts that are reserved exclusively for small businesses, MWBEs or veteran-owned businesses.
If you’re new to government bidding, you might have been unaware of the benefits that certification provides for your business. Becoming certified can take time, but it’s worth the effort because it guarantees you a fair shot at bidding on, and winning, government contracts.
One question that many small business (MWBE, VBE, DBE) owners have is “How do I get certified?” In this article we will discuss the steps you need to take in order to get certified, and link to some resources that will help you with your application and answer any questions you may have about the certification process.
Register Your Business
If you are a new entrepreneur, after you have determined the type of business you will be operating and chosen a name for your business, you’ll need to register the business name if it is anything other than your personal name. The name of your business is referred to as “Doing Business As”, or DBA, and is required to be on all government forms.
You’ll need your DBA to receive your EIN (Employee Identification Number), also known as your federal tax ID, and any other licenses or permits required for the legal operation of your business. Depending on where your business is located, your DBA name can be registered with the County Clerk’s Office or state government.
Working with the Federal Government
If you plan to bid on federal contracts, you must register with SAM (System for Award Management) and obtain a DUNS number. Be aware that you won’t be able to bid on federal contracts until you do so. Registering with both of these systems allows the federal government to check if you are eligible to bid on the products and services they are looking to acquire, and it also allows agencies to find your business more easily if they are looking for specific vendors.
Getting Certified as a Small Business: Minority, Woman, Veteran-Owned, or Disadvantaged Business Enterprise
Most states have a specific agency that handle the certification of businesses; do some research to find out which agency is responsible for certifications in your area. For a list of agencies close to you, or for further help with getting certified, you can visit a link below according to the type of entity your business will be certified as.
In order to get certified, businesses must meet the following eligibility requirements:
- Minority, Woman or Veteran Owned business owners must meet the definition of their respective category, as well as own and control 51% of the business
- The majority owner must be a U.S. citizen or legal resident of the U.S.
- Small businesses must meet SBA size standards
- The business owner’s personal net worth cannot exceed $3.5 million after deductions
- The new business must be in operation for at least 6-12 months prior to applying for certification
The Application and Certification Process
Local or state certification agencies will provide the application for certification, and they will review your application before submitting it. You will be required to provide the business name, physical address, contact person, phone number, any fax or email associated with the business, NAICS codes, industry codes, Federal Supply Classification codes, commercial and government entity codes, DUNS number, the nature of the business, type of products and services, and legal structure (i.e. sole proprietorship, Limited Liability Company, partnership, etc.) to fulfill the application requirements.
There is an application fee, but it varies depending on which state or agency you apply through. If approved, your certification will last for one year, at which point you’ll need to re-certify and pay the annual fee.
The application will detail all the documents you need to send in with your application, which includes:
- Personal federal and state tax information
- Financial statements
- Birth certificate
- Drivers license
- W-2 and payroll information forms for all officers
- IRS forms
- Lease/rental agreements for property or trust deed or loan agreement for ownership
- Resumes for all owners, directors, partners, officers, etc.
If you own more than one business that is eligible for certification and would like to certify each one, you will need to go through the certification process for each business separately and pay the application fee for each.
The certification and review process usually takes from 1 to 3 months to complete and will include an in-person interview to make sure that the business owner is in fact a minority, woman or veteran and that the business is up and running. The onsite visit allows the agency to double-check that no false claims were made on the application.
Once the visit is complete, the review committee will meet again and either approve or deny your application. If a business owner is approved for certification, they will receive a certification packet; if an application is denied, the business owner will receive a letter with an explanation as to why they were denied. Business owners can appeal the agency’s decision in the 30 days following the receipt of the letter.
After Getting Certified
Once your business is certified, you can start taking advantage of government Set-Asides. Government agencies and other companies will be able to find your business on the national or state MWBE directories; this will make it possible for agencies to send you bids directly and also gives other companies the opportunity to contact you about possible subcontracting opportunities.
By getting your business certified, you open the door to a world of different opportunities. Bidding on government contracts can help you establish your business, and ultimately allow you to successfully compete in the world of public-sector contracting.
Danielle Calamaras | BidNet.com