Here at MO PTAC, we often get questions about getting certified as a minority-owned business or as a woman-owned business.
These can be difficult questions to answer. First, certification is no panacea. It should not be the primary motivation for starting a business. You have to show government buyers that you have the capability to get the job done -- that is first and foremost. That said, in some cases certain certifications may provide extra leverage in obtaining a contract or a subcontract.
All Federal agencies have goals for contracting with small businesses and with specified categories of small businesses, including Small Disadvantaged Businesses (SDBs), 8(a)-certified firms, Woman-owned, HUBZone-certified, Veteran-owned, and Service-disabled veteran-owned small business firms.
State agencies in Missouri, as well as the City of St. Louis, also have goals for utilization of Minority-Owned Business Enterprises (MBEs) and Woman-Owned Business Enterprises (WBEs). And transportation-related agencies such as the Missouri Department of Transportation, Lambert Airport, and Metro (Bi-State), have goals for utilization of Disadvantaged Business Enterprises (DBEs).
But you must be certified to "count" toward any agency's goals. These are not "quotas" nor are they (except in limited circumstances) "set-asides." Indeed, the largest set-aside program has nothing to do with minority nor woman nor veteran status.
That is the Federal small business set-aside provision, which requires that any Federal contract with an anticipated dollar value under the Simplified Acquisition Threshold ($100,000) but above the Micro-Purchase Threshold ($3,000), must be set-aside for competition only among small business.
However, that is no guarantee that your small business will get the contract!
The certification process itself typically takes months, requires pretty extensive digging into the financial background and position of the firm and of its owners, and may involve a site visit by certifying agency staff. Government certifications are for the most part free of charge, but commercial certifiers may charge a fee.
All in all, certification can be one effective tool for your business, but is not a guarantee of obtaining government contracts.
If you have questions about certification, please contact MO PTAC!