Can it be an advantage to be 'disadvantaged'?

MAT-SU -- How does a business get certified as "disadvantaged"? How will this help a business? These are frequent questions. Certifying a business as disadvantaged assists organizations that are seeking contracts with federal, state and sometimes municipal agencies. A business is certified through several different programs. The Small Business Administration is the main certifying body although the state also has a certification process. It is optimal to use the applications provided by the SBA since they will be accepted by the state. This does not guarantee state certification but allows for less paperwork to be completed by the business owner.

The HUBZone Empowerment Contracting Program is one of the disadvantaged business programs available. The purpose of the program is to provide federal contracting assistance to qualified small businesses that are located in underutilized business zones. To determine if your business is in one of these zones visit the HUBZone Web site at www.sba.gov/hubzone.

There are some requirements with the HUBZone certification process. The business must be owned and controlled by U.S. citizens, a community development corporation or an Indian tribe. The company must also be classified as 'small' by SBA standards and its principal office must be located in the HUBZone. Finally, at least 35 percent of the employees of the company must live in the HUBZone.

The certification process is done entirely online and mailed applications will not be accepted. What does certification offer? The federal government has a goal of awarding 3 percent of all government contracts to HUBZone certified businesses. That might not sound like much but with several billion dollars in contracts awarded each year, 3 percent is quite a bit of money.

The 8(a) Business Development Program is another disadvantage certification program to investigate. The objectives for this plan are to promote business development of small businesses that are owned and controlled by socially and economically disadvantaged individuals. The eligibility requirements include social and/or economic disadvantage, ownership control and management, small business size standards, potential for success and good character of the owners.

The 8(a) program runs for nine years which starts at the date of approval. The first four years are considered the developmental state and the last five years the transitional stage. After this time period the business is expected to meet a competitive environment.

This program offers direction in identifying contracts and finding technical assistance. It also offers a mentoring program whereby a small business is partnered with another business that serves as a 'mentor.' The mentor and prot/g/ can enter into joint venture arrangements to compete for contracts and the mentor can also assist the prot/g/ firm in raising capital. The relationship is entered into with a written agreement and a one-year commitment is expected by both parties. Contact the SBA office if your business would like to serve as a mentor firm or if you are an 8(a) designated company and would like to take advantage of this program.

Certification for the 8(a) program is also completed through the SBA. More information can be found at www.sba.gov/businessop/programs/8a.html.

These are just two of several programs available to increase accessibility to government projects. The DBE or Disadvantaged Business Enterprise program is another one. This program is administered through the Department of Transportation and gives small businesses the opportunity to compete fairly for federally funded transportation-related projects. The following Web site provides further information www.dot.state.ak.us/cvlrts/dbe_cert.html.

As a small business it can be advantageous to explore the options offered through some of these programs. If assistance is needed in the certification process, contact the SBA, DOT or your local Small Business Development Center for help.