Let's Get Certified

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by Joshua Botello

Getting small business certifications has been a way for disadvantaged businesses to get a leg up on the ever-competitive market. These are the most common small business certifications you are going to find. They definitely offer an advantage in the marketplace, so here is some background on what these programs are about and what you’re going to need.

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Service-Disabled/Veteran-Owned Small Business (SDVOSB/VOSB)

The Veteran-Owned Small Business certification is a federal certification through the Department of Veterans Affairs. This particular program is not what is known as a set-aside, the government does not allocate a specific amount of contracts to VOSBs. What this certification offers is a spending goal of all contracts at 3% of total spending. Now, this might sound small, but in fact, amounts to $40 billion in contracts annually.

The VOSB certification allows preferential treatment and “front-of-the-line” access to government contracts. A VOSB certification also gains you access to resources and exclusive training from the Office of Veteran Business Development and SBA to specifically help veteran businesses.

To qualify as a VOSB, the business will need to be at least 51% owned by a veteran, they must manage the day to day operations, have a DD-214, and be registered in the Federal System for Award Management (SAM). Service-Disabled VOSB qualifications are much the same but their disability must be connected to their military service and will be determined by the Department of Defense and/or Department of Veterans Affairs.

Here’s a list of what you need to apply: Click Here
Apply Here

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Economically Disadvantaged/Woman-owned Small Business (EDWOSB/WOSB)

The WOSB certification came into being to level the playing field and create more opportunities for women entrepreneurs and WOSB set-aside was established. This means that from the over $500 billion the government allocates for contracts every year, 5% is set-aside specifically for prime and subcontracts for WOSB. This amounted to about $20 billion in awards as of 2017. There is another set-aside category is the economically disadvantaged women-owned small business (EDWOSB) which has many of the same qualifications, with some notable differences below.

Because of this “set-aside” certification, WOSB has exclusive bidding rights based on the industry. This could mean if you are a WOSB you the first in line, or perhaps, the only one in line to win the contract. 

To qualify as WOSB, the business must be 51% owned by a woman, who is responsible for the day to day operations and make long-term decisions. If you are looking for an EDWOSB status adds a few more qualifications: women owner-operators must have a net worth of no more than $750,000, with an adjusted gross income of no more than $350,000 over the last 3 years, and personal assets of less than or $6 million each.

Here’s a list of what you need to apply: Click Here
Apply Here

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HUBZone

While most of the certifications on this list have factors relating to identity, the HUBZone certification is location-specific. Historically Underutilized Business Zones are areas with businesses in both urban and rural communities, carved out to help these specific areas.

The biggest benefit is the 10% price evaluation preference. This means that a company can quote a price up to 10% higher than the lowest bid and if it is within that range the HUBZone certified business would win the contract. The set aside for HUBZone companies has become so substantial, the government has allocated more than there are qualified vendors. Many companies are actively moving to these HUBzones (view here)and getting certified to take advantage of these benefits.

There a few requirements aside from the business being located in the HUBZone area to qualify. The business must be a qualified small business by SBA standards (here); Be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe; have a primary location within a "Historically Underutilized Business Zone," which includes lands considered "Indian Country" and military facilities closed by the Base Realignment and Closure Act; At least 35 percent of its employees must reside in a HUBZone.

The application process takes 90 days and you must approve the application 10 days after the initial request. The certification lasts for 3 years and you must recertify, but beware, you must notify the SBA if changes occur that might affect the status, including change of ownership, entity structure, principal office location, or not meeting 35% of employees in HUBZone.

Here’s a list of what you need to apply: Click Here
Apply Here

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8(a) Program

The 8(a) program is a business development program for businesses owned by individuals who are socially or economically disadvantaged. This means members of the following list can qualify for the program:

• Black Americans
• Hispanic Americans
• Native Americans
• Asian Pacific Americans
• Subcontinent Asian Americans
• Members of groups designated from time-to-time by the SBA

There can also be non-members of these designated groups who have faced social disadvantages in the United States. Factors for this discrimination can include:

• Physical handicaps
• Gender
• Long-term residence in an environment isolated from the mainstream of American society
• Any quality outside of your control that has been targeted for prejudice and discrimination

The program allows businesses with this certification to secure exclusive bidding rights with other 8(a) businesses for the same contract. In some cases, an 8(a) business is the only bidder on a particular contract or industry.

The certification caps the 8(a) business earnings at $100 million (based on your NAICS code), 5 times the limit set by SBA, which most vendors reach. As a federal contractor, an 8(a) business is afforded exclusive bidding opportunities of $4 million in goods and $6 million for manufacturing.

The program certification lasts for 9 years and while being a member of the list above can qualify you to apply its not the only requirements. The business will also show a disparity in credit and capital of not disadvantaged businesses. There are also economic requirements: the owner’s net worth is $250,000 or less, adjusted gross income for the last 3 years is $250,000 or less, and the owner’s assets are worth no more than $4 million.

Here’s a list of what you need to apply: Click Here
Apply Here

Those are the certification programs for small businesses, so you as an owner can determine which is the best for your business. If you have any additional questions or need assistance in the application process for your business please contact us at the University of LaVerne Small Business Development Center.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.