For minority-owned businesses, government contracts are available through certain federal certifications. Typically the certification people discuss related to minorities is 8a certification, which is ostensibly focused on racial minorities. Being a racial minority is not the only form of eligibility. Anyone who can demonstrate social disadvantage has access to the program. We will also discuss 8m certification; that program is specifically meant to federally register women-owned small businesses (WOSBs).
Small businesses need to get nearly a quarter of federal contracting dollars, 23 percent, per federal law. It’s particularly eye-opening how large a portion of that chunk of federal contracting dollars is dedicated toward organizations run and owned by socially and economically disadvantaged individuals — those contracts make up 5 percent or more of all federal contracting dollars. A large amount of those dollars, awarded through the 8a certification program, go to minority-owned businesses (specifics described below).
You may think 5 percent does not sound like a lot of money. However, Big Ideas for Small Business founder Barbara Weltman noted how huge the volume of these contracts actually was: using 2011 data, the total for the fiscal year was $477 billion, 5 percent of which was a $24 billion market.
About 8a Certification
The 8(a) Business Development Program from the Small Business Administration takes its name from that section of the US Small Business Act. By offering businesses greater opportunities to land federal contracts and by otherwise providing them assistance, this SBA minority-owned business program is designed to allow disadvantaged companies to better compete.
You need to meet certain qualifications in order to join this program, which lasts a total of nine years:
- You must meet the federal parameters for a small business.
- You must show that the business is controlled and owned 51% or more by socially or economically disadvantaged people.
- You must demonstrate strong potential, such as having been in operation for two years or more.
If your business has those characteristics, you then need to apply for 8a certification. Once that is granted, you can take advantage of the program’s various benefits.
SBA minority-owned business support is explicitly offered to the following groups since a person is presumed to be socially disadvantaged due to being of a certain race. Five key races/groups this program is intended to help are the following:
- Native Americans
- African Americans
- Hispanic Americans
- Subcontinent Asian Americans
- Asian Pacific Americans.
For minority-owned businesses, government contracts are more accessible through this program. Beyond race, you can show disadvantage through various other characteristics:
- Physical disability
- Living in a community that is separated from general society.
You are a member of an economically disadvantaged group if you do not have as much access to credit and capital from the free market because you are a member of the group.
The Importance of Proper Marketing
Government contracts will not be automatic for minority-owned businesses simply because you are accepted into this program (as is true with 8m, described in the next section). Marketing is essential to success getting contracts:
- Register with the GSA Schedules Program from the General Services Administration.
- Submit a free registration to the Central Contracting Database (CCD). Register with all the government’s various mechanisms to verify your credibility and ability to handle contracts.
- Monitor FedBizOpps for an invitation for bid (IFB).
- Submit an IFB response. A strong understanding of your market allows you to keep bids realistic.
- Show great follow-through. Additional information may be needed to process your invitation response. Make sure you promptly submit any written documents. You may also need to present in-person.
Woman-owned Business: 8a & 8m certification
Women should know both about 8a certification and 8m certification:
8a certification(non-specific to women) — If your business is small per federal standards, you may be able to demonstrate that you are disadvantaged and access these federal contracts. The federal government tries to award 5 percent of contracts to small, disadvantaged businesses.
8m certification(specific to women) — This certification designates you as a women-owned small business (WOSB) and gives you access to federal contracting opportunities. The federal government’s goal is to give WOSBs 5 percent of contracting funds.
Here are four key differences between the two certifications/programs, as indicated by federal procurement publisher Wolters Kluwer Legal & Regulatory:
- Only certain industries can get 8m certification.
- In order to be in the 8m program, you do not have to be economically disadvantaged – except for those who are applying as economically disadvantaged women-owned small businesses (EDWOSBs).
- While it is easier to get 8a certification if you have been in business for two years or more, 8m certification is unrelated to company histories.
- There is competition for all 8m program set-asides, while sole-source set-asides are available in the 8a program.
Women business owners can access our support for the WOSB program and 8m certification here.
Minority-Owned Business Set-aside Contracts & Assistance
For economically disadvantaged minority-owned businesses, government contracts are available through 8a certification. However, navigating the federal contracting maze is not easy. At Select GCR, you get your own Government Procurement Advisor (GPA). Your GPA’s constant communication and defined government-targeted marketing plan teaches you how to spend your time, who to contact, what to say, and what to send them. Contact us today to get the assistance you need.