Understanding Small Business Certification and Minority Owned Business Certification

Posted by Nick Schiffler on July 9, 2021

small minority owned business

Small businesses have a distinct advantage when learning how to get started in federal government contracting. The federal government provides many resources and programs for different types of certified small businesses, which is why it’s important to understand how small business certification and minority owned business certification works. Most agencies have offices of small and disadvantaged business utilization (OSDBUs) and/or small business programs that are focused on ensuring the agency maximizes the opportunity for small business in their acquisitions.

Many contracts specify that small businesses must do a certain amount of the work, or are set aside entirely for small businesses. Published, currently open government contracts can be found on sites like SAM.gov. Contracts and pre-notification opportunities, meanwhile, can be found on GovWin IQ’s comprehensive market intelligence platform.

Commonly-Used Small Business Certification Programs

The Small Business Administration (SBA) offers a number of programs which cover different types of small business certification to help small businesses win some of these federal government contracts.

 

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Below are several of the most commonly-used programs:

  • Women-Owned Small Business Federal Contracting. The government aims to award at least 5% of federal contracting dollars to women-owned small businesses (WOSB) every year.
  • Service-Disabled Veteran-Owned Small Business. The government aims to award at least 3% of federal contracting dollars to SDVOSB firms every year.
  • 8(a) Business Development. The government aims to award at least 5% of federal contracting dollars to qualified small disadvantaged businesses every year through the 8(a) program.
  • HUBZone. The government aims to award at least 3% of federal contracting dollars to HUBZone-certified small businesses every year. A HUBZone is a historically underutilized business zone where the government is looking to foster economic activity such as job creation. Of the small business programs, it is the only program not focused on the ownership of the business, but rather on the location of the business and its employees.
  • All Small Mentor-Protégé Program. Small businesses can get valuable business development help from an experienced government contractor through the mentor-protégé program.

To get a sense of how important of a priority small business contracting is in the world of federal government contracting, the U.S. Small Business Administration (SBA) maintains a ‘Small Business Procurement Scorecard’ to track government-wide performance against these targets on an annual basis. Below is a snapshot of this scorecard.

SBA Small Business Set-Aside Goals

Additionally, there are other sources of opportunities and government financing programs offered by the SBA that may be available for firms with minority-owned business certification.

Small Business Certification Can Lead to Winning More Government Contracts

Companies often find that when they rely on SAM.gov or crawling other government websites, other more sophisticated companies have already been engaging the agency buyers in discussions and have done some “preselling”. Once a solicitation is released on a government website, agency contracting officers and buyers have very restricted rules around communication that essentially preclude discussions with individual companies until the acquisition is awarded. This means it can pay to gather as much information as possible well in advance.

Of course, the rewards for sourcing all this advance intelligence are there in the form of billions of dollars of government contracts. With the right tools and research in hand, veteran-owned, minority-owned, women-owned and 8(a) businesses can take advantage of the many opportunities that exist in the government market for small businesses and grow their public sector sales pipelines.

Looking for the next steps to succeeding in federal government contracting? Once you’ve secured your small business certification, you can learn the other key actions to take to get started in government contracting by downloading the complimentary guide below.


 

Federal Government Contracting 101


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