Don’t Put Off Your Small Business Certifications for Another Year
If you are eligible for any small business certifications but have been putting them off, here are a few things you should know:
- Benefits of Small Business Certifications. Small business certifications may open more doors and allow you to compete in a sheltered
market with less competition. They may also help you attract larger and more experienced
teaming partners who don't have direct access to the billions of dollars exclusively
reserved for small businesses each year through set-asides.
- Why 2022 Is an Important Year to Get Certified.
- More dollars to flow to small businesses. The government is looking to use its massive purchasing power to push more contracting
opportunities (and dollars) out to the small business community.
In a White House fact sheet released just last month, President Biden announced "a bold new goal: increasing the share of contracts going to small disadvantaged businesses by 50 percent by 2025 – an unprecedented target projected to translate to an additional $100 billion to SDBs over 5 years."
In addition, throughout 2022 the federal government plans to "update goals for other "socioeconomic" categories of small businesses, including women-owned small businesses, service-disabled veteran-owned small businesses, and HUBZone businesses."
- The federal government is moving away from self-certification. The problem with self-certification is that it is fraught with fraud and misrepresentation.
In 2010, the Department of Veterans Affairs (VA) moved away from self-certification
to an official verification program for contracts awarded by the VA. Still, self-certification
remained an option for veterans being awarded contracts by other federal agencies.
However, a proposed rule in the 2021 National Defense Authorization Act indicates that the self-certification option for veterans will go away in 2023 as the VA hands over the responsibility for verification and certification to the Small Business Administration (SBA).
The SBA has already moved away from self-certification for WOSB and EDWOSBs by implementing a formal certification program in 2020. The only remaining federal self-certification (other than general small business) after 2023 will be self-certification as a Small Disadvantaged Business (SDB). How long it will remain an option is unknown, but as the government looks to spend more money with SDBs they will also likely be taking a closer look at who those specific SDBs are. The official set-aside which helps the government meet its SDB goals is the SBA's 8(a) program, but most self-certified SDBs are not 8(a) certified. This issue may make it challenging for people in the federal government to hit their SDB contracting goals as there is currently no SDB set-aside option.
- Tip for veterans: Beat the crowd, get certified in 2022. Because self-certification will likely be going away in 2023, and considering that
thousands of veteran-owned small businesses have never gone through verification,
you may want to go through the certification process in early 2022 while it is still
in place at the VA. Doing so will help you get ahead of the crowd of firms that must
get certified in 2023 and avoid long wait times due to backlogs and system problems.
If you are a veteran-owned small business, we encourage you to meet with your Arkansas
PTAC counselor to help you better understand the changes and get certified in 2022.
You can learn more about these changes in the Recommended Resources section below.
However, by SBA's definition, most small businesses are not small disadvantaged businesses. Click here for a review of the SBA's SDB information page. If you do not meet the requirements of a small disadvantaged business, do not check the box next to "are you a small disadvantaged business?" in SAM. Not only will you be misrepresenting your status, but if the government awards you a contract and claims your award toward their SDB goals, you may encounter undesired attention and consequences if discovered. If you are not sure about your status as a small disadvantaged business or want to know if this claim is showing up on your profile, ask your PTAC counselor.
Your PTAC counselor can also provide you with no-cost access to Govology's training titled, "The Ins and Outs of Federal Small Disadvantaged Business Self-Certification." If you are, in fact, an SDB by definition, you are likely eligible for the SBA's 8(a) program. Click here to learn more about the SBA's 8(a) certification along with benefits and eligibility requirements.