As a way to promote small business, the U.S. government guarantees that 23 percent of its contracts shall be awarded to small businesses. The Small Business Administration (SBA) is the government agency that ensures that small businesses get their allotted government contracts. When you register with the Central Contractor Registry (CCR), the main government database for tracking contractors, you begin the process of being certified by the SBA (federal policy requires all contractors to be registered before being awarded any contract or purchase agreement). (Read Registering as a Contractor with the Government for more information.)
The SBA uses the information you give the CCR to establish your eligibility for a variety of government programs, such as Small Disadvantaged Business (SDB) and HUBZone, both of which can help your company secure government contracts.
The CCR sends your business’s Trading Partner Profile (TPP) to the SBA for certification. Using the guidelines set by the North American Industry Classification System (NAICS), the SBA certifies your small business size status. Your company’s total revenue and number of employees, including all divisions, branches, and affiliates as indicated on your TPP, determine your business status.
When establishing or reviewing size requirements, the SBA uses the following factors:
- Industry structure analysis
- Degree of competition
- Average firm size
- Startup cost
- Entry barriers
- Distribution of sales and employment by firm size
- Impact of different size standard levels on the objectives of SBA programs
- Comments from the public on notices of proposed rulemaking
For more information on small business size standards and NAICS codes, visit the SBA Web site or e-mail the agency at email@example.com.
In addition to certifying your company’s small business size status, the SBA also provides a series of programs intended to give small businesses better opportunities. In terms of government contracts, it gives small businesses the ability to compete with larger companies in the bidding process. In particular, the federal government has established regulations that mean small businesses are guaranteed a certain percentage of government contracts conditional on their size, type of business, and SBA program for which they qualify.
SBA programs that you might want to research regarding your eligibility include:
- Small Disadvantaged Business (SDB) — Certifying yourself as a SDB means you get a price evaluation preference on a federal solicitation. SDB is defined as a business owned 51 percent by persons who are socially and economically disadvantaged.
- HUBZone — As a way of promoting economic development, certain distressed areas are eligible for added preference in seeking government contracts. To qualify, 35 percent of your employees must reside in a HUBZone (Historically Underutilized Business Zone).
- 8(a) Business Development — Named for a section of the Small Business Act, it is intended to help disadvantaged small business owners compete for federal contracts. To qualify, you must be from a disadvantaged background and show a potential for success. To be eligible, you must be certified by the SBA.
- Emerging Small Business — Part of the Small Business Competitiveness Demonstration Program that helps companies who are just starting out. The size standard for Emerging Small Business is 50 percent of the SBA NAICS size standard.
- Woman-owned Business — Defined as a small business owned and controlled 51 percent by women, either singularly or as a group. At present, this status is self-certified.
- Veteran-owned Business — Defined as a small business owned and controlled 51 percent by veterans. This status is also self-certified.
Part of the CCR database is the Dynamic Small Business Search (DSBS), a powerful search engine managed by SBA and used to learn about prospective vendors for government contracts. The database offers a means for firms to conduct market research and confirm their certification for SBA procurement preference programs. To access, go to the CCR Web site and click on the “Dynamic Small Business Search” button.