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Are You a Small Disadvantaged Business?

Qualifications for the program are similar to those for the 8(a) Business Development Program. A small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to qualify. Other individuals can qualify if they show by a "preponderance of the evidence” that they are disadvantaged. All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry.

Once a Small Disadvantaged Business (SDB) is certified and listed on the public registry, it will be eligible for preferences under new federal procurement regulations. The main preference is a "price evaluation adjustment" of up to ten percent for SDBs bidding as prime contractors. The price adjustment means an SDB won't have to be the lowest bidder to win a contract award. The rules also provide a system of preferences for large businesses that use SDBs as subcontractors.

Firms that are 8(a) certified are certified as SDBs.

Click http://www.sba.gov/sbaforms/sba1010.pdf to apply for SDB Certification.

There are two major differences between the SDB, 8(a), and HUBZone Programs.

1.  SDB and HUBZones are essentially contractor programs designed to expand economic opportunity for disadvantaged businesses.

2.  In contrast, 8(a) is a business development program that is characterized by a tangible relationship with the SBA, one that provides business advice and coaching. This is not the case for the SDB and HUBZone Programs.  8(a) certified companies are assigned a Business Opportunity Specialist (BOS), an SBA employee, who advises and coaches them in business matters.

You can apply to all certification programs.  Under the right circumstances, an applicant can qualify for all three certification programs.  An example of this would be an 8(a) eligible business located in a Historically Underutilized Business Zone.

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