To render a level business field for small businesses, the government offers certain concessions in important contracts to small businesses. It does this by limiting competition in these contracts, which are also known as small business set-asides. These contracts help minority-owned businesses to compete and win federal contracts.
Federal Contracts for Minority-Owned Small Businesses
The Federal government has been establishing formal goals for small businesses to enjoy a fair share of work. It is worth knowing that every purchase by the Federal government between $10,000 and $250,00 has been set aside automatically for small businesses, as long as two companies offer products and services at a very fair and reasonable price. The businesses that qualify for this special concession by the Federal Government are as follows.
Women-Owned Small Businesses
In these businesses, about 51% or more of the businesses are owned and controlled by one or more women who are citizens of the United States. The size of the business should also be small and be by the SBA size standards.
Small Disadvantaged Businesses
These businesses are also known as 8(a) small businesses, and they should be a small business and should not have participated in the 8 (a) program previously. At least 51% of the business should be owned and controlled by the citizens of the United States belonging to the socially and economically disadvantaged group. The business should also be owned by someone whose net worth is $250,000 or less, the owner should have a net asset of $4 million or less and has the potential to perform successfully on contracts.
Veteran-Owned Small Businesses
The small business administration also sets aside contracts for businesses owned by service-disabled veterans. A service-disabled veteran should own the business, and his disability should be determined and approved by the Department of Veterans Affairs.
Minority-Owned Business Certification
Getting the businesses certified as minority-owned opens up several business opportunities for federal, state, and local contracts. Governments and corporations around the United States offer a set percentage of their contracting budgets for minority-owned businesses exclusively. However, it requires the business to be formally recognized as a minority-owned business or an enterprise and also to seek an official certification for the same.
When it comes to getting certified, NMSDC (National Minority Supplier Development Council) is the largest and the most prominent certification body for minority-owned businesses. The certification can be obtained through an online application. The applicants should be US citizens, and the business should be located in the US. The business should be at least 51% minority-owned, operated, and controlled.
Before applying for the certification, it is important to gather all the information, including the certificate of incorporation, stock certificates, articles of incorporation, stock ledger, and other amendments as application. The application should be done online, and the application fee should also be paid online through credit cards. It is mandatory to upload all supporting documents in the prescribed format to complete the application. It is also mandatory to schedule a site visit and interview with the certification specialist from NMSDS to complete the minority-owned business certification.
For businesses that are economically disadvantaged and are owned by minorities, the Federal government offers business contracts through their 8(a) certification. However, contracting the federal contract is a maze and is not easy to accomplish. This is where Federal business development advisor like MySetAside comes to the rescue of minority-owned businesses and comes up with a marketing plan, to help businesses prosper.