AROUND THE NBA
The Small Business Administration will hold a seminar in El Segundo on Thursday to teach small disadvantaged businesses how to qualify for federal certification. The event will also promote participation in the program, which has met with a lukewarm response.
For years, the federal government allowed disadvantaged businesses--most of them minority-owned--to qualify for such status by simply checking a box on a form. But under new regulations implemented last year, firms must be certified by the SBA in a process that includes in-depth financial reviews.
Response to the program has been lukewarm at best. Many minority-owned small businesses either don’t understand the program or see no value in participating. Others have complained that third-party certifiers under contract to the SBA are charging hundreds of dollars for a procedure that is virtually free if businesses go directly through the agency.
The certification requirement coincided with other changes to federal affirmative action programs that will be outlined at the daylong seminar, which costs $15 and will be held at Raytheon Systems Co.’s Electronic Systems segment.
Under recent affirmative action regulations, small disadvantaged businesses in certain sectors are eligible for a 10% price credit on bids for federal contracts, but only if they are certified and listed in the SBA’s online database, Pro-Net. For subcontractors on federal jobs--far more common in an era of big bundled deals--the benefits are less direct.
Rather than offering the subcontractors a price break, the new affirmative action regulations instead offer an incentive to big prime contractors--such as Raytheon--if they use small disadvantaged businesses as subcontractors. As of last year, prime contractors can only count contract dollars with certified firms toward those federal goals.
The SDB certification program has been problem-plagued since its launch last year. Poor response from small businesses led to program delays and the responses have picked up only slightly since.
Furthermore, the Office of Inspector General is auditing the program to determine how the SBA spent nearly $22 million collected from other federal agencies over the last two years.
For more information, call (818) 552-3233.
