There are 7 major, small business set-aside designations in federal government contracting. Below is a listing of these designations, divided into two groups, Self-Certifying at the Central Contractor Registration (CCR) and those where government certification is required.
1. Small Business - Established by North American Industry Classification (NAICS) Code for all categories of government business (Please download the "SBA Small Business Size Standards" at the "Box Net" Cubicle on the left margin of this web site for further information). Every federal procurement has a NAICS Code assigned to it and is registered on the below web site if it exceeds $25k:
2. Minority Business Enterprise (MBE) - Self-Certifying at CCR and a good interim designation while an 8(a) application is in process for minority-owned companies
3. Woman-Owned Business - Applicable to Women-Owned Businesses only:
5. Disabled Veteran-Owned Business - Applicable to Disabled Veteran-Owned Businesses only
GOVERNMENT CERTIFICATION REQUIRED
6. Small/Disadvantaged Business SBA 8(a) Program - Requires 2 years in business and a lengthy application process with the SBA at the following web site:
7. Historically Under-Utilized Business (HUB) Zone Located - Pertains to small businesses located in geographic areas with a historical record of low government contracting. This designation requires application at the following HUB Zone Site Web Site:
QUALIFICATIONS, REGISTRATION, CERTIFICATIONS AND REPRESENTATIONS
To qualify as a small business for a given solicitation an enterprise must have registered at the CCR under the applicable NAICS code for the procurement and meet the SBA eligibility size standards for that code.
A small business also certifying under items 2-5 and 6 above must have individuals qualifying for the designation with at least 51% ownership interest and an operating role in the company. 60% is recommended to avoid the appearance of a front. Silent partners and investors without qualifying status or an operating role in the firm do not count toward the designation. It is suggested that ownership interest be specified by name in the articles of incorporation with the state and by % of ownership in an operating agreement.
To qualify as a HUB Zone Enterprise the business must be located in a HUB Zone and a qualifying percentage of the members (owners or employees) of the business must also live in the appliable HUB Zone.
The Registration Web site is at:
Carefully select your small business designations when preparing your business and marketing plans for federal government contracting. Keep in mind that self-certifications are verified through records checks and site visits by contracting officers, DCMAO and Source Selection Boards for federal procurements before contract awards are made.
A small business set-aside designation can be a valuable tool if adequately documented, registered, certified and prudently used for bidding work that your enterprise is capable of performing successfully.