Minority-Owned Business Status


Starting and continuing a small business is hard work, and it is easy for a small business owner to feel overwhelmed.  Thankfully, there are several government programs designed to relieve some stress, at least when it comes to generating revenue.  Each of these programs offers significant opportunities for qualified small businesses to compete for government contracts.

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Women Owned Businesses

The federal government wants to encourage women to own and operate small businesses.  To that end they set aside a certain percentage of government contracts for such women owned small businesses (WOSB).  These contracts can be very lucrative: up to $3 million for services and $5 million for manufacturing, although there are no “sole-source” awards under this program and the WOSB must abide by certain subcontracting limitations.

To be eligible for WOSB consideration the business must be at least 51% owned AND controlled by one or more women, and primarily managed by one or more women.  The women must be United State citizens and the business must be “small” under federal small business guidelines for the business type.

 

8(a) Businesses

8(a) certification can help small businesses owned by men or women. 8(a) small business owners can qualify for sole-source contracts, have higher contract award potential, and are able to form joint ventures and teams to bid on contracts.  Additionally, the 8(a) program has a Mentor-Protege Program to help individuals new to small business ownership team up with experienced small business owners.

The program aims to help qualified small businesses that are “owned and controlled by a socially and economically disadvantaged individual.” Certain individuals are presumed to be socially disadvantaged: African-Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, and Subcontinent Asian Americans.  Individuals can prove disadvantage by showing hardship due to “race, ethnic origin, gender, physical handicap, long term residence in an environment isolated from the mainstream of American society; or other similar cause.”

Additionally, applicants must show economic disadvantage by submitting both financial documentation and a narrative explaining one’s history of economic disadvantage, income, assets, and net worth.

 

HUBZone Businesses

Unlike the previous two programs, the Historically Underutilized Business Zone (HUBZone) program focuses more on business location than ownership.  Certified HUBZone small businesses are given access to special access to federal procurement opportunities and contracts.  These include both sole-source and competitive contracting, a 10% price evaluation preference, and opportunities to subcontract.

The HUBZone program requires a United States citizen, “Community Development Corporation,” agricultural cooperative, or Indian tribe to own and control at least 51% of the small business.  Additionally the principal business office must be located in a HUBZone.  You can see if you live in or near a HUBZone here: http://map.sba.gov/hubzone/maps/.  Finally, at least 35% of the small business employees must reside within a HUBZone.

 

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