Are you a small disadvantaged business that can provide products or services to the transportation industry? If so, you should seriously be looking into the Disadvantaged Business Enterprise Program (DBE) to give you an edge over the competition. This federal program is operated under the U.S. Department of Transportation (DOT) in an effort to increase the participation of socially and economically disadvantaged small businesses in state and local transportation projects.

The DBE program can be confusing. While it is federally mandated, certification is actually managed by each state’s Department of Transportation. However certain local agencies within a State may also be able to certify DBEs. Once certified your business is able to bid as a DBE anywhere within the certifying state. However if you want to bid as a DBE in a separate State you will need to recertify there.

You can find information about certification on individual State websites. State and local transportation agencies work to ensure that only bona fide, small businesses that are owned and controlled by socially and economically disadvantaged individuals are certified.

Why obtain a Disadvantaged Business Enterprise Certification?

The DOT requires that at least 10% of the funds authorized for the highway and transit financial assistance programs be expended with DBEs. What does that mean?  Basically, when the DOT funds a state or local transportation project they require that agency to make sure small, disadvantaged firms that are certified get part of the action.  Many state transportation projects also have mandatory DBE contracting goals that allocate an even higher percentage of prime contracting dollars to certified firms.

Becoming certified gives socially and economically disadvantaged businesses an advantage over larger firms when competing for these types of contracts. The bottom line is this is a great way to get into government contracting. Additionally, large firms are often given contract incentives to use DBEs as subcontractors. The DBE program also assists small businesses outside the DBE program with business development and other government contracts.

Eligibility Requirements

As of July 2009 to qualify as a DBE:

• Your business must be owned and operated by one or more socially and economically disadvantaged individuals. The DOT presumes certain groups are disadvantaged, including women, African-Americans, Hispanics, Native Americans and Asian-Pacific Americans. Individuals who are not members of one of these groups may be eligible if they establish their “social” and “economic” disadvantage. For example, an individual who is disabled might have a disproportionately low income or experience unemployment. A determination of whether an individual with a disability meets DBE eligibility criteria is made on a case-by-case basis. More information on how social and economic disadvantage is determined can be found in Appendix E to 49 CFR Part 26. Non-minority males and tribal owners might also meet this requirement if they can prove that they have been socially and economically disadvantaged.

• Your business must meet SBA size standards and must not have gross annual revenue over $22,410,000 in the past three fiscal years.

• Your personal net worth (and that of each eligible owner applicant) must be less than $750,000, excluding the values of your ownership interest in the business and your primary residence. See 49 CFR Part 23 for more details.

• Your business must retain 51% ownership by socially and economically disadvantaged individuals.

• You must have expertise in the relevant business or industry.

• You must have control of the daily management and operations of the business.

Additional information on DBE program requirements can be found in the Department of Transportation’s regulation 49 CFR Parts 23 and 26.

How to Obtain Certification as a DBE

To obtain specific instructions on how to apply to become a DBE contact your state department of transportation for which you wish to participate in contracts. A comprehensive list can be found here. Also, when applying for the DBE certification be prepared to provide documentary evidence substantiating your company’s size, your Personal Net Worth, independence, and ownership and control. The local or state transportation agency you apply to will also conduct an on-site visit to your company’s offices and job sites.

President Obama has set a deadline of President’s Day to get his $825 billion economic recovery bill passed so it is time to prepare how you are going to win stimulus package contracts.

According to a summary of the American Recovery and Investment Bill of 2009 investments will be targeted toward the following key areas:

• Energy – Objective is to double renewable energy production and renovate public buildings to make them more energy efficient (e.g. $16 billion will be spend repairing public housing to make them more energy efficient)
• Science & Technology – Help to make sure America keeps innovating by providing facilities, equipment and broadband internet access
• Infrastructure – Significant focus will be given to rebuilding roads, bridges and modernizing public buildings.  $30 billion dollars alone will be used for highway construction
• Education – Better classrooms, labs and libraries for America’s children so that they are better equipped to compete in the world economy
• Healthcare – Large investments in IT to computerize the healthcare system

Federal agencies will receive a good proportion of the money but billions will also find their way to state and local government agencies, presumably in the form of grants.  At the core of what the President is trying to achieve is to get money into the economic system so that it can find its way into the hands of small businesses.

If you run a small business you must now prepare yourself so that you are well placed to take advantage of President Obama’s strategy and win stimulus package contracts.  Here are 7 things you should be doing:

1. Make sure you are registered on the Central Contractor Registration database – you can’t be awarded a contract unless you are registered
2. Register also on the Small Business Dynamic Search as this is often where prime contractors will look to find small businesses to team with
3. Make sure you know your way around FedBizOpps – any federal contract over $25,000 will be published here
4. Consider whether you can attain any certifications.  There are a number of Federal small business certifications and many others at the state and local level for small, local and minority businesses.  Often contracts are set aside for businesses with relevant qualifications
5. Start teaming with experienced larger companies in your industry that already provide their products or services to government.  You can find out who those companies are by searching the FedSpending tool
6. Start proactively forming relationships with executives at federal, state and local agencies just like you would with any other prospect in a commercial company.  Don’t just wait for an RFP to be issued, even though it is government you are still selling to people and you need to network accordingly
7. Finally, think about how you can best position your business to win stimulus package contracts.  It may not be obvious at first how you can sell your product or service given the areas the Bill is targeting but it is more than likely you can.  Meet with government executives and discuss their needs so that you can start to best position and market your business

The economy is in recession and it will be for a while but government is booming.  There has never been a better time to focus your energy in this area.

HUBZone stands for Historically Underutilized Business Zone and is a program that was created by the provisions contained in the Small Business Reauthorization Act of 1997.  The purpose of the HUBZone program is to promote economic development and employment in distressed areas by providing access to federal contracting opportunities for small businesses.

If you are thinking of setting up or relocating your office you may want to locate within a HUBZone given the benefits.  Regardless, it is worthwhile checking to see if you are in a HUBZone area already or whether any of your competitors are already qualified under the program.

Benefits

Being a HUBZone company provides several benefits that can give a business a distinct advantage when seeking federal contracts.

The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone certified businesses.  Benefits include the potential for set-aside or sole-source federal contract arrangements and the potential for price evaluation preferences of up to 10% on full and open competitive contracts. In addition, all subcontracting plans for large business federal contractors must include a HUBZone subcontracting goal.  Eligible firms also can qualify for higher SBA-guaranteed surety bonds on construction or service contract bids and for certain tax-related benefits.

If you run an advanced search on FedBizOpps you will be able see whether any federal bids have been set-aside for HUBZone companies for your particular industry.

Eligibility Criteria

To be a HUBZone company, a business must meet the following criteria:

• Must be a small business in accordance with SBA standards
• Must be owned or controlled at least 51% by US citizens (or a Community Development Corporation or an Indian Tribe)
• Principal office must be located within a HUBZone
• At least 35% of its employees must reside in a HUBZone

How to find out if you are in a HUBZone area

Whether an area is a HUBZone is based on either income or employment data and the SBA relies upon definitions provided by various federal agencies.  To ascertain whether you are in or near a HUBZone area click here and you are able to search either by a specific address or by county and/or state.  Your search will return a map and list of places within the county designated as HUBZone areas.  I suggest that you search by county as you may be surprised at the number of areas within your county that are qualified as HUBZone areas.

How To Apply

The SBA regulates and administers the program.  They maintain a listing of qualified HUBZone businesses and also deal with the application process.  To apply you must first have an active Dun and Bradstreet profile and DUNS number as well as a CCR profile.  Once you have this, proceed to the rather outdated SBA HUBZone website to electronically apply.