Small Businesses Can Apply for Disadvantaged Certification

The Small Business Administration is inviting disadvantaged small businesses to apply for certification under a program launched to help weed out fraud in minority contracting.

Beginning Oct. 1, businesses contracting with the federal government will no longer be allowed to “self-certify” as disadvantaged or minority-owned. They must instead undergo a thorough review by the SBA that will determine whether their firm is owned and controlled by an individual who meets the new definition of social and economic disadvantage.

The federal rules, revised by the Clinton administration earlier this summer, will allow certain nonminority groups that were previously ineligible to be considered as disadvantaged. The rules do away with set-asides, offering price preferences instead to disadvantaged small businesses, but only in industries in which the Commerce Department has determined that disadvantaged companies are underutilized. The program was revised in response to a 1995 U.S. Supreme Court decision calling for affirmative action programs to be targeted to remedy only the lingering effects of discrimination.

In addition to certifying eligible companies, the SBA’s Office of Small Disadvantaged Business Certification and Eligibility will also handle protests and appeals, establish a network of private certifiers to help process applications, and maintain an online registry of certified companies. Subcontractors will also be affected by the new rules beginning Jan. 1.

For more information or to apply for certification, contact an SBA district office or call (800) 558-0884.