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Fact Sheet
Small Business Programs
- Consistent with the President's long-standing commitment to equal opportunity in federal contracting, the Administration's new affirmative action procurement regulations meet the test set out by the Supreme Court in its 1995 decision in Adarand Constructors, Inc., v. Pena, 115 S. Ct. 2097 (1995).
- The new regulations provide new procurement preferences for small disadvantaged business (SDBs), including a price evaluation adjustment up to ten percent for SDBs bidding as prime contractors. The regulations also provide preferences for large businesses that use SDBs as subcontractors. The preferences for the use of SDBs as subcontractors are contained in a new section of the regulation called the SDB Participation Program.
- The SDB preferences will apply to many Federal procurements but not all, and they will be allowed only in industries in which SDBs are underutilized.
- Eligible industries will be determined by the Department of commerce through the use of benchmarks and will be adjusted periodically, possibly once a year, to reflect the most current procurement data.
- Benchmarks satisfy the primary concerns of the Supreme Court in the Adarand case, and will also ensure that SDBs receive an advantage on industries where some form of preference is clearly needed.
- In the past, the government relied on self-certification for purposes of SDB eligibility, which allowed firms to identify themselves as meeting the requirement for certification.
- The self certification procedure is replaced by one in which all companies claiming to be SDBs must be certified by SBA.
- The new process of government certification will reduce costs, prevent fraud and abuse, and ensure that the program is administered fairly.
- To be eligible for a price evaluation adjustment, an offer or must submit a certification, obtained within the past three years, that the business is owned and controlled by one or more socially and economically disadvantaged persons.
- Contracting Officers and large business prime contractors will verify, at the time of the actual procurement, that an entity is still on SBA's list of certified SDBs by checking an on-line registry maintained by SBA.
- Members of designated minority groups seeking to participate in SDB programs fall within the statutory presumption of social and economic disadvantage established in Section 8(d) of the Small Business Act.
- Individuals who do not fall within the statutory presumption can qualify by proving their social and economic disadvantage.
- The Small Business Administration's (SBA) Office of Government Contracting and Minority Enterprise Development will administer the new government-wide SDB Certification & Eligibility Program.
- In particular and in accordance with subpart B of 13 CFR
124, SBA will:
- Certify all qualified concerns requesting SDB certification;
- Decide protests and appeals;
- Establish and oversee a nationwide network of private certifiers who will help SBA process applications, ensure that they are complete and correct in form, and determine that the applicant firm is in fact owned and controlled by the individuals identified as the owner; and
- Maintain a national public on-line registry of certified SDBs for access by contracting officers and the general public.
- The SDB regulations were published for public comment on August 14, 1997. Requirements related in certification, protests and appeals and other issues are addressed in the rules.
- An interim Federal Acquisition Regulation (FAR) rule that implemented the price evaluation adjustment for SDB concerns was issued June 30, 1998.
- Implementation of evaluation factors or subfactors for SDB participation and incentive contracting with SDB concerns.
- The price evaluation adjustment program, which will allow SDBs to receive up to 10% price preference on certain procurements, goes into effect October 1, 1998.
- On January 1, 1999, the following preferences kick in: the evaluation factor will become available to offerors for SDB participation, and the monetary subcontracting incentive clause will give prime contractors up to 10% incentive for meeting or exceeding their SDB targets.
- The SBA began accepting and processing applications for SDB certification as of August 24, 1998.
- SDB application information is available at SBA district offices nationwide. Locations of SBA district offices are listed on SBA's Internet home page at http://www.sba.gov.
- Firms looking to sell goods and services to the federal government that qualify as SDBs are strongly encouraged to apply for certification.
- For more information, contact the U.S. Small Business Administration Office of Small Disadvantaged Business Certification and Eligibility, 409 3rd Street, S.W., Washington, D.C. 20416, 202-619-1850, 1-800-558-0884, e-mail mail to: SDB@SBA.gov.
HOW TO APPLY
- Contact local SBA District Office for an application package. Submit completed application to SBA's Assistant Administrator for Small Disadvantaged Business Certification and Eligibility (AA/SDBCE), or to an approved Private Certifier, if directed by SBA.
- No firm will be recognized as an SDB without certification by the Small Business Administration (SBA).
ABOUT THE SMALL BUSINESS ADMINISTRATION
The Small Business Administration is the leading advocate for ensuring that small businesses can fairly and equitably participate in the Federal procurement process. Where applicable, in determining whether a fin-n qualifies for certification, the SBA will consider the totality of the circumstances experienced by the individual that owns and controls the firm. The Small Business Administration will also consider the extent to which a disadvantaged individual's ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities. The SDB is one of several programs implemented to reform affirmative action that the SBA intends to judiciously implement these goals and objectives.