Small Disadvantaged Business Certification
By Joyce Mears

 When I was asked to provide general information on Small Disadvantaged Business (SDB) Certification, my first thought was, which parts?  I was then provided with additional clarification asking me to explain the program’s benefits, the process and how it could be an intermediary step to obtaining an 8(a) certification. However, it is not a step in obtaining the 8(a) certification.  The 8(a) program is a business developmental program and its requirements are more restrictive.  

First, a brief history, real brief - - SDB certification is a federal procurement program designed to overcome the effects of discrimination and to conform to the U.S. Supreme Court’s 1995 Adarand court decision.   And yes, there are certain criteria that a business must meet when applying under this program. 

What are those criteria - - the business must be owned and controlled 51% by a socially and economically disadvantaged individual or individuals, i.e. (presumed to qualify) African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans and Native American.  All others would need to provide a “preponderance of the evidence” that they have been disadvantaged.  Individuals must also be citizens of the United States.  All principals must have a net worth of less than $750,000 (excludes the equity of the business and primary resident).  They must also meet the applicable size standards for small businesses in their industry. 

The SDB program benefits are the price evaluation adjustment and the evaluation factor.   So what does that mean?  Qualified SDBs receive a price evaluation adjustment of up to 10 percent on procurements where mandated by regulation.  Regulations mandate this approach in competitive acquisitions over the simplified acquisition threshold (usually $100,000) where the standard industry code (SIC) for the prime contract is authorized by the U.S. Department of Commerce benchmarks.  The evaluation factor is when qualified prime contractors can receive a credit when using SDBs as subcontractors.  This incentive applies only to competitive negotiated acquisitions over $500,000 or $1,000,000 when construction is involved.  The evaluation factor does not apply to small business set asides, 8(a) acquisitions, or contracts performed entirely outside the U.S.  SDB participation allows credit for subcontractors only in the SIC codes authorized by the US Department of Commerce benchmarks and requires that all SDBs be certified by the Small Business Administration (SBA).  When certified, companies remain on the SBA’s list of SDB-certified firms for a period of three years.

So, what steps must someone take to acquire certification?  First and foremost, read the information on our web site at http://www.sba.gov/sdb or take the online training course on SBA certifications at http://www.sba.gov/training /certprograms.html to better understand what the program is and what it does. Also, read Title 13 Code of Federal Regulation (CFR) 124 subpart B.  The documentation requested is different for corporations, limited liability companies, partnerships and sole proprietorships.  If you are interested in applying, the forms are online at https://sba8a.symplicity.com/applicants/guide and can be sent electronically or by mail.

Joyce Mears, BD Specialist, Washington Metropolitan Area District Office, US Small Business Administration