What does the term “certification” mean when referring to minority or woman-owned businesses?
Certification is a process of analysis conducted by certification agencies in order for businesses to become a Minority Business Enterprise (MBE) or Women Business Enterprise (WBE). This process ensures that a business is actually owned, controlled, and operated by the applicant(s) by properly certifying only those businesses that meet the strict eligibility requirements of the program.
Applicants are generally small businesses 1 that are minority and/or women-owned (MBE or WBE). There are certification programs that apply to other categories of applicants such as Disabled Veterans Business Enterprise (DVBE), Historically Underutilized Business (HUBZone), 8(a) Business Development and Small Disadvantaged Business (SDB). Certification programs can be on local, state regional or national levels depending upon the certification.
Is my company eligible for certification?
Business owners must meet certain criteria in order to become certified. There are basic guidelines and requirements common to many certification programs. However, each certifying agency may have additional or different criteria. Some of the basic requirements for minority and/or women-owned business certifications are as follows:
The business is 51% or greater owned and controlled by one or more minorities or women. The applicant(s) must be able to show that the history of company management and daily business operations are controlled by one or more minorities or women.
The term “minority” refers to ethnic minority of either gender of the following categories: African American, Native American, Asian-Pacific American and Asian-Indian American, Hispanic / Latino Americans (including Portuguese), and Asian / Pacific Americans. The latter group includes those with ancestry in China , Japan , Korea , Vietnam , Cambodia , Laos , the Philippines , Malaysia , Indonesia , the Pacific islands, Thailand , Burma , Bangladesh , India , Sri Lanka , and Pakistan . Proof of minority status is required.
Business owners must be a U.S. Citizen. Permanent residents (green card holders) can also be certified.
Some certification agencies will accept Legal Resident Alien status.
Small Business Administration (SBA) certifications including 8(a), Small Disadvantaged Businesses (SDB) and Historically Underutilized Businesses (HUBZone) have other criteria that must be met. Please refer to www.sba.gov for a full description of the certification programs and the eligibility requirements.
What are the different types of certifications available?
Certifications are available for minorities, women, disadvantaged, disabled veterans, small businesses and HUBZone. Some of the common certification programs are briefly described below.
WBENC (Women’s Business Enterprise National Council) and NMSDC (National Minority Supplier Development Council) certify women and minorities, respectively.
SBA certifications such as 8(a) and SDB certify disadvantaged business owners defined as businesses with one or more socially and economically disadvantaged individuals(s). HUBZone certification is for those businesses located in “Historically Underutilized Business Zones”. To find out if your business qualifies as a HUBZone Enterprise please go to www.sba.gov .
Some local and state governments have their own MWBE and small business certifications. Please check the web sites of your local and state governments for information.
What are the benefits of becoming certified?
Certification by an authorized agency establishes that the company meets the eligibility requirements for that particular program (minority, women, disadvantaged, etc.). This validation is important to organizations that have procurement goals to meet in the utilization of small, diverse and disadvantaged businesses. Certified businesses are entered into supplier databases of these certification agencies and these databases are accessible by organizations who honor these certifications.
How long will the certification process take?
The certification process can range from 30 days to 6 months once the application is submitted to the certification agency. The length of time varies greatly and is dependent upon the certification agency and if additional documentation is requested in order to complete the application process. Although each certification has a checklist of requested documents, sometimes the certification agencies will require information not originally on the application checklist based upon the initial information you provide them.