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Government Contracts For Small Minority Businesses

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Get To Know The National Minority Supplier Development Council

New program teaching SA minority-owned businesses how to bid on government contracts

When it comes to getting certified, businesses first need to know more about the National Minority Supplier Development Council , the largest and most prominent certification body for minority-owned businesses. The organization says it has an unwavering commitment to advance Asian, Black, Hispanic, and Native American suppliers in a globalized corporate supply chain.

The NMSDC has a network of 12,000 certified minority-owned businesses that can then be connected to more than 1,400 large corporate members. NMSDC certification also holds a lot of weight in government circles, with many states and cities accepting NMSDC certification to help with public-sector contract selection.

Corporate membership of NMSDC includes many of the largest privately owned companies in the world, including Accenture, Apple, Bank of America, Delta Airlines, Facebook, Google, GM, Microsoft, Nike, Raytheon, UnitedHealth Group, Walmart and Walt Disney Company. These member companies use the NMSDC directly of minority-owned businesses to research companies and award contracts.

The NMSDC has a network of 12,000 certified minority-owned businesses that can then be connected to more than 1,400 large corporate members.

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Government Contracts For Woman

byKyle BernalMay 16, 2022, 11:11 am

Every year, government agencies spend billions on goods and services. Thats a lot of money to be spent on supplies, services, and equipment! Its also an opportunity for women-owned businesses to get a piece of these procurement dollars.

Whether you are just starting a female-owned business or looking for more information on the available resources, the following information will help you start or advance your business and take advantage of government contracting opportunities.

  • Become certified now!
  • How To Become Certified As A Small Minority Woman Or Veteran

    For a vendor, being certified as a small business, MWBE, VBE or other special designation has many benefits when it comes to bidding on government contracts. When a government agency posts a bid, they are obliged to award 23% of all contracting dollars to small businesses in addition, they have award sub-goals that they must meet for each small business category. For example, women-owned and small disadvantaged businesses must each be awarded 5% of a contracts total dollar value, while Service Disabled Veteran-owned and HUBZone businesses must each be awarded 3% of the total contract.

    Government agencies also administer what are called Set-Asides, contracts that are reserved exclusively for small businesses, MWBEs or veteran-owned businesses.

    If youre new to government bidding, you might have been unaware of the benefits that certification provides for your business. Becoming certified can take time, but its worth the effort because it guarantees you a fair shot at bidding on, and winning, government contracts.

    One question that many small business owners have is How do I get certified? In this article we will discuss the steps you need to take in order to get certified, and link to some resources that will help you with your application and answer any questions you may have about the certification process.

    Register Your Business

    Working with the Federal Government

    Eligibility Requirements

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    What If There Was More Equity In Federal Contracts

    While minority-owned and women-owned small businesses are only getting a sliver of federal contracting dollars, that doesnt need to be their destiny. As our data indicates below, if these businesses received federal contracting dollars in proportion to their share of US employer businesses, these entities would see a massive economic gain. Specifically:

    Minority-owned businesses would have received $64 billion more in contracts in FY 2020. And women-owned small businesses would have received an extra $77 billion.58

    Of this, Black- and Hispanic-owned businesses would see significant gains. If contracts were awarded proportional to representation of US employer businesses, Hispanic-owned businesses would have received almost $24 billion more in awards in FY 2020, and Black-owned businesses would have received nearly $4 billion more.59 It is also important to note that Black- and Hispanic-owned businesses already make up a small fraction of employer businesses, especially when compared to their representation in the US population. While 18.5% of the US population is Hispanic, they are only 6% of employer business owners and receive just 1.8% of federal contracting dollars. 60 And while 13.4% of the US population is Black, they make up only 2% of all businesses owners and get just 1.7% of federal contracting dollars.61

    Small Disadvantaged Businesses And 8 Small Businesses

    Government Contracts For Minority Businesses

    If your answer is yes to the following questions, you may meet the criteria for an 8 set-aside:

    • Be a small business
    • Not already have participated in the 8 program
    • Be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged
    • Be owned by someone whose personal net worth is $250,000 or less
    • Be owned by someone whose average adjusted gross income for three years is $250,000 or less
    • Be owned by someone with $4 million or less in assets
    • Have the owner manage day-to-day operations and also make long-term decisions
    • Have all its principals demonstrate good character
    • Show potential for success and be able to perform successfully on contracts

    For more information on eligibility requirements and certification, visit the SBA 8 Business Development Program page.

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    What Is Sba Minority Owned Business Certification Definition & Meaning

    In federal government contracting, federal minority business certification applies to companies that are for-profit business enterprise must be a small business under the respective NAICS code and located in the United States. Under SBA certification rules, the company must be owned and controlled by the qualifying member who is also US citizen.

    SBA Programs for Minorities Are you eligible for minority business government contracts?

    If your company is owned and controlled by a US citizen then you may be eligible to submit an application for SBA 8 BD program for minorities. In addition to being a US Citizen, you also show that you are both socially and economically disadvantaged. This generally means that you can show that you were subjected to racial or ethnic prejudice.

    • Simply because you are a minority does not guarantee MBE certification with the federal government.
    • State programs sometimes may have slightly different definitions and meaning.

    Under the minority-owned definition, control means that the business owner must have at least 51% ownership or at least 51% of stock ownership if the company is owned by one or more such individuals. The owners must be responsible for the daily management of the enterprise.

    How To Qualify for SBA Minority Owned Business Enterprise Certification Programs?

    How Do You Get Awarded Government Contracts

    You can begin bidding for and winning minority contracts when youve accomplished all of the preceding processes.

    Once the federal government gives the solicitation information for government contractors, they always indicate in their posting if it is open for large contractors, minority-owned enterprises, women, and or small businesses.

    Indeed, government contracting as well as get certified is tricky at first glance. But once you get along with it, you will surely master it and instantly get contracts in the future.

    There are available resources that you can use as you take the path of the organizations ownership. Any that remains is for you to get a complete awareness and dig deeper into how federal contracts work and all the similar line of information.

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    Who Is Getting Federal Contract Dollars

    Analysis of the federal contracting landscape shows that minority-owned and women-owned businesses are getting a pittance in terms of contracting opportunities. Progress in changing this trend has been slow, and numerous agencies are falling short in supporting minority- and women-owned businesses.

    Minority-owned and women-owned small businesses are getting only a sliver of the federal contracting pie.

    In Fiscal Year 2020 the federal government spent over $650 billion on contracts for goods and services, of which nearly $560 billion was eligible to be done through small businesses.4 Yet, minority-owned small businesses received just 9.4% of those small-business eligible federal contracting dollars and women-owned small businesses a mere 4.9%.5 To put this into perspective, almost 19% of US employer businesses are minority-owned and just under 21% are owned by women.6

    Small businesses writ large are often shut out of federal contracts. In FY 2020, small businesses only received 25% of the federal contracting pie. And of those awards to small businesses, 62% went to businesses owned by non-minority groups.7

    Progress toward changing these trends is moving too slowly and, in some cases, backwards.

    The WOSB program has met the 5% procurement goal only twice since it was authorized in 1994in FY 2015 and FY 2019. And while WOSBs were awarded 5.1% of federal procurement dollars in FY 2015, in FY 2020 that number actually shrank to 4.9%.9

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    United helping minority businesses compete for contracts

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    The federal government invests more than $500 billion each year in private business partnerships often with small businesses and women- and minority-owned businesses. Bianca Vobecky discusses her experience.

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    Why Arent Women And People Of Color Getting A Bigger Piece Of The Federal Contracting Pie

    As minority-owned and women-owned businesses struggle to receive federal contracts, it is important for policymakers to understand what is holding them back. Below we unpack five key reasons why these specific business owners face greater barriers to successfully compete for, and win, federal contracts:

  • Confusing requirements and difficulties in obtaining information on contracts make applying an uphill battle.
  • Preferences for established and experienced businesses shut out women and minority owners.
  • Limits on set asides can mean the reward is too small to be worth it.
  • It can be costly and too time intensive to apply.
  • Contract bundling by federal agencies leaves fewer chances to succeed.
  • 1. Confusing requirements and difficulties in obtaining information on contracts make applying an uphill battle.

    For many small businesses, the procurement process can be incredibly difficult to navigate. In applying for federal contracts, small businesses must sift through whether particular agencies have certain prerequisites, certifications, or skill sets required to receive contracts.19 And while agencies may hold info sessions for contractors on doing business with the federal government, that information tends to be more general and doesnt always provide specifics on applying to particular projects.20

    2. Preferences for established and experienced businesses shut out women and minority owners.

    4. It can be more time intensive and costly to apply.

    There Are Government Contracts For Small Businesses As Well As Minority

    When it comes to government contract opportunities, whether your business is big or small, old or new, or minority-owned, there are many options to choose from. The government constantly needs vendors for various industries, services, and products. The United States federal government is the worlds largest consumer of goods and services. Each year billions of dollars are set aside for government contracts. For example, in 2020, the federal government spent over $665 billion on contracts, a $70 billion increase from 2019.

    The government is required to put out solicitations for the funds theyre given. With so many options on the table, its almost impossible not to find a contract to suit your business.

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    Sba Minority Owned Business Certification Basics

    In federal government contracting having a minority-owned business enterprise can have its advantages. However, there are strict guidelines to follow with minority-owned business government contracts. There are also severe consequences for not following SBA minority owned business certification rules. Many people make the mistake of believing that the only requirement is to be a minority. There is more to the story that this.

    One example of a federal minority-owned business certification program is the SBAs8 Business Development Program. This program helps your minority business enterprise to become certified and take advantage of federal, small business set-aside and sole source opportunities worth hundreds of thousands or millions of dollars.

    SBA programs are not only for minorities. There are hundreds of small businesses in the 8 Business Development Program that are not minority companies.

    Why Gao Did This Study

    Federal Advertising: Contracting with Small Disadvantaged Businesses ...

    DOD obligates billions of dollars for contracts yearly to buy products and servicesnearly $300 billion in fiscal year 2016from various types of businesses. A business generally must self-identify as a minority-owned business or a women-owned business, as applicable, in the federal governments contractor registry.

    Section 890 of the National Defense Authorization Act for Fiscal Year 2017 contained a provision for GAO to report on the number and types of contracts for the procurement of products or services that the DOD awarded to minority-owned and women-owned businesses.

    This report uses Federal Procurement Data System-Next Generation data to identify trends in DODs procurement of products and services from minority- and women-owned businesses for fiscal years 2010-2016.

    Although the Act contained a provision for us to review only fiscal years 2010 through 2015, GAO added fiscal year 2016 because it was the most recent year for which complete data were available. All obligations data are presented in constant fiscal year 2016 dollars, adjusted for inflation using the fiscal year gross domestic price index. GAO used this data to analyze which contract types were used the percentage of obligations used to purchase products or services the top products and services procured and the number of contracts awarded from fiscal years 2010-2016.

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    How To Get Government Contracts For Women Minorities And Small Businesses

    Many entrepreneurs such as myself create businesses out of a need. Some people are just tired of working at their jobs. Some people are really great at something and decide to be an accountant or a management consultant. But the problem that many entrepreneurs face is that they dont necessarily know all of the other challenges they are going to encounter.

    The government provides a number of resources to help entrepreneurs make the decision as to whether or not having a business is for them. It teaches them, free of charge, what they should be looking at, how they should scale up, and those types of things.

    I think about the Small Business Administration as an example. Right on their website, they have a number of online courses that a potential business owner can take to see if starting and launching a business is right for them. It covers everything from finance to marketing, and those types of things.

    Using the government as a resource, since its a service thats provided free of charge, is a really important first step. You just dont know what you dont know when youre starting a business.

    Telecommunications: How Vendors Use Contract Award Information To Win Government Bids

    For vendors who are just beginning to work in the public sector, the government contract process can be confusing. Bidding on government contracts involves navigating many unknowns and requires vendors to find out which agencies are posting bids, what types of products and services they are looking for, and the conditions that apply to awarded contracts. READ MORE

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    Certifications And Why You Need Them

    In various different aspects of government contracting, there are certifications designed to increase opportunities for different types of groups. One in particular is women-owned businesses. The federal government has this certification for women-owned businesses called the SBA 8 Women-Owned Small Business Program, which is a self-certification for women who own and control their businesses. In order to qualify, the business needs to be 51 percent owned and controlled by women .

    I want to focus on why the certification is important. Typically the federal government has awarded a little less than 5% of all government contracts to women-owned businesses. The purpose of the certification is to create an environment where women-owned businesses are more visible and have greater access to government contracts. Thats one aspect.

    City and state governments have similar programs. Look at the landscape. I use New York as an example. Look at the number of government contracts that are awarded. Studies have shown that contracts have not been equally dispersed to minority- and women-owned businesses. Having the certification makes us visible so to these agencies that we can compete for government contracts.

    Small Business And Minority

    Proposal to end competitive bidding for minority-owned contractors

    Small businesses are the backbone of our economy. With that in mind, various obligations are imposed by the government on federal contracts. As a result, opportunities are exclusively set aside for small businesses. They may consider the number of employees and annual revenue to determine eligibility. Additionally, vendors who promote affirmative action within their organization and focus on employing veterans and disabled individuals are given priority.

    The federal government sets a monetary goal to award contracts to small and minority-owned businesses annually. In 2020 it exceeded its 23 percent goal for small businesses and three and five percent for service-disabled veteran-owned and small, disadvantaged businesses, respectively. Of the billions spent on vendors last year, 26 percent or $145.7 billion in prime contract dollars and $89 billion in subcontracts were awarded to small businesses.

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    Veteran Minority & Women Owned Business Resources

    Veteran, minority and women-owned small businesses in Texas have a major impact on the states economy. Texas is home to some of the top cities for Hispanic and minority entrepreneurs, and we have frequently been named one of the best states for black entrepreneurship. In addition, Texas is #1 for jobs created by African American, Hispanic and Veteran women business owners. Governor Greg Abbotts goal is for Texas to be the #1 state for veterans, minority and women-owned businesses in the nation.

    Here are some of the resources and organizations dedicated to helping veteran, minority and women-owned businesses start-up and grow in Texas.

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