What Qualifies as a Small Disadvantaged Business

13 C.F.R. §124.404(a)-(c); 13 C.F.R. §124.405; 13 C.F.R. §§124.701-704. 8(a) Businesses are also eligible for certain other SBA supports because they are small businesses, not because they participate in the 8(a) program. See, e.g., 15 U.S.C. §694b (Small Business Guaranteed Bond). In particular, there are other federal programs for SDBs and BEDs that are agency-specific and smaller, such as the Environmental Protection Agency`s DBE program. See 40 C.F.R. §§33.101-33.503. These programs are not covered in this report. Nor does this report address minority enterprise programmes as defined by the Minority Business Development Agency (MDBA) of the Department of Commerce.

MBEs do not need to be « small » and their owners may be socially or economically disadvantaged. 15 C.F.R. §1400.2(a). EMBs are not certified for federal programs, and there are currently no federal or federally funded contract programs for EBs that are not also 8(a) participants, SDSs or DBEs. But see Expanding Opportunities for Main Street Act, H.R. 2551, §205, 113th Cong. (proposes to establish a layaway program for MBEs). Members of these groups must provide a signed notarized declaration of their membership in the group,73 as well as certain information about their economic status.74 In addition, their net worth must not exceed $1.32 million, excluding their interest in DBE and their equity in their principal residence.75 Persons who are not members of certain groups must prove by a balance of probabilities: that they are socially and economically disadvantaged.76 The Small Business Administration (SBA), through its 8(a) Business Development Program, sets policies and oversees the certification of disadvantaged small businesses. Before your company can be certified as an SDS, make sure your company qualifies according to the Small Business Administration criteria. A business is considered an SDS if more than half of the business (51%) is owned or controlled by a disadvantaged person. By definition, that disadvantaged person must be: The Small Business Administration (SBA) defines socially disadvantaged groups as those who have been historically exposed to « racial or ethnic bias or cultural bias » within broader American culture. Identified groups include: African Americans, Asia-Pacific Americans, Hispanics, Native Americans, and Asian Americans from the subcontinent.

Members of other groups may be eligible if they can satisfactorily demonstrate that they meet specific criteria. 124.1002(h). A disadvantaged small enterprise is a small enterprise at least 51 % owned by one or more socially and economically disadvantaged persons. single eligibility for disadvantaged companies and individuals; not more than nine years in the 8(a) program A disadvantaged small business (SDB) is a small business that is at least 51% owned by one or more socially and economically disadvantaged persons. SDS status allows a company to participate in tendering and contract execution programs associated with federal procurement. Companies must be certified by the Small Business Administration (SBA) to qualify for SDB status. FAR Subpart 19.304 requires that an SDS be certified by the SBA at the time of its offer (main or subcontracted) or that it has completed and submitted an SDS application. See, for example, Mark Trumbull, Why Obama Job Creation Plan Focused on Small Business, The Christian Science Monitor, p.

8. December 2009, available at www.csmonitor.com/USA/Politics/2009/1208/why-obama-job-creation-plan-focuses-on-small-business (noting that small businesses have reportedly created 65% of all new jobs in the U.S. over the past 15 years). As part of the registration process, you will need to enter information about your company into the Price Management System (SAMS) database. In SAMS, you can certify as a small business, but you must meet the federal government`s definition of a small business. 13 C.F.R. §124.520(d)(1). For the joint venture to be classified as « small », entity 8(a) must be considered « small » under the procurement size standards and, in the case of exclusive contracts awarded under Article 8(a), must not have received a combined sum of competitive and exclusive contracts in excess of $100 million or any other applicable threshold. See generally 13 C.F.R. §124.519. Upon inclusion in Program 8(a), companies must notify the BSO in writing of any change in circumstances that affect their eligibility.26 Each company must also conduct an annual review, which requires the submission of (1) certificates attesting that the company meets the eligibility criteria and that no change in circumstances affects its eligibility; (2) the personal financial information of each disadvantaged owner; and (3) among others, the corporation`s financial statements.27 Depending on the corporation`s gross annual revenues, its financial statements may need to be audited by an independent auditor,28 as shown in Table 1. « Small Disadvantaged Businesses » (SDBs) include participants 8(a) and other small businesses that are unconditionally owned and controlled by socially or economically disadvantaged individuals or groups.42 SDSs that are not 8(a) businesses do not have to demonstrate their potential for success,43 and individuals who own and control non-8(a) SDSs may have a net worth of up to $750,000 (excluding interests in the SDS company and 44 However, otherwise, SDSs must generally meet the same eligibility criteria as Article 8(a) entities, although they do not apply to the SBA in the same way as entities referred to in paragraph 8(a).