This document summarizes various programs that provide support and opportunities for small disadvantaged businesses. It discusses the definition of small businesses and disadvantaged businesses according to federal criteria. Key programs covered include the 8(a) program, SDB certification, SDVOSB, WOSB, HUBZone, MBE/DBE certification, and supplier diversity programs. Requirements and considerations for each are outlined.

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SBA Programs and Other Programs
Analyzing Programs for
Small Disadvantaged
Businesses

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About the Firm
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McMahon, Welch and Learned,
PLLC represents many small and mid-sized
federal services contractors in Northern Virginia,
DC and Maryland, including small-
disadvantaged firms, veteran-owned firms,
women-owned firms and Hub Zone qualified
firms. We also have a strong corporate and
acquisitions-support practice which focuses on
general business legal matters of significant
interest to the broader business community.

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Presenter
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Kevin R. Learned, Partner
Mr. Learned’s practice focuses on advising clients on
general corporate and securities matters, including company
formation and governance, buy-sell agreements, operating
and stockholder agreements, mergers and acquisitions,
private offerings of debt and equity securities (including
friends and family, angel, venture capital and private equity
investments), corporate divorces and other reorganizations,
joint ventures, small business certifications (including 8(a),
SDVO, WOSB, HUB Zone and MBE/DBE
certifications), executive employment and equity matters,
deferred compensation plans, franchise agreements,
trademarks, and other commercial contracts and agreements.

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Small Disadvantaged
Businesses4
 The federal and state governments, as well as
private businesses, have adopted numerous
programs designed to support and encourage
the growth of small disadvantaged businesses.
The primary questions are:
 What is a small business?
 What is a disadvantaged business?

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Small Business Programs
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 Small Business Set-Asides
 No Disadvantaged Status Required
 Special Preferential Programs Administered by
SBA
 8(a) Program
 SDB
 SDVOSB
 WOSB
 HUBZone
 MBE/DBE Certification
 Supplier Diversity Programs

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Why Size is Important
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Small Business Set-Asides
 Procurements can be set-aside for small business
competition
 Company size must not exceed the size standard set for
the procurement
 NAICS Codes (North American Industry Classification
System)
 A code is assigned by industry and/or products/services to be
provided to almost all federal solicitations, procurements or
RFPs
 Each NAICS code is associated with a size standard that has
been set by the SBA

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How Does SBA Determine
Size?7
 Size Standards
 Determined by NAICS Codes
 Personnel/Staff
 Receipts/Total Receipts – includes pass-through
income.
 Period of Measurement
 Average of Most Recently Completed Three Fiscal
Years
 Self-Certification
 Certification each time you sign the representations
and certifications that accompany your offer
 Criminal penalties for false certification of size

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Special Size Considerations
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 Affiliation
 Concerns and entities are affiliates of each other when
one controls or has the power to control the other, or a
third party or parties controls or has the power to control
both
 It does not matter whether control is exercised, so long
as the power to control exists
 Size Protests
 A legal challenge of a prospective awardee’s size
 Usually occurs in the context of a procurement and only
after a company has been selected for award

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SBA Programs
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 Each of the set-aside programs limit
competition
 Each has its own qualifying requirements
 All require that you be small as defined in
the solicitation
 All require that the 51% owners be U.S.
Citizens

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8(a) Program – Minority Small
Business Development Program
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 Arduous application process
 Looks closely at other owners
 Need to prove likelihood of success
 Requirements:
 51% ownership;
 Social disadvantage; and
 Economic disadvantage ($250k income and $250k
net worth, excluding retirement funds, personal
residence and business – $4 million cap)
 9 year program participation

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SDB – Small Disadvantaged Business
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 Easier than the 8(a) application process
 Not a set-aside program, but instead gives
preferential treatment in bidding
 Requirements:
 51% ownership;
 Social disadvantage; and
 Economic disadvantage ($750k net worth,
excluding retirement funds, personal residence
and business)

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SDVOSB – Service Disabled Veteran
Owned Small Businesses
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 Self-Certification for non-VA procurements
 CVE Verification Required for VA
procurements
 CVE also certifies VOSB status
 Two year recertification requirement
 Be careful about mid-term audits
 Requirements:
 51% ownership, by
 Disabled Veterans

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WOSB – Women-Owned Small Business
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 WOSB vs. EDWOSB
 Specified NAICS Codes
 Self-Certification vs. Third Party Certification
 Requirements:
 51% ownership, by
 Women; and
 Disadvantaged (if EDWOSB) ($350k income and
$750k net worth, including retirement funds but
excluding personal residence and business – $6
million cap)

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HUBZone – Historically
Underutilized Business Zones
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 Most Difficult SBA Program to Maintain
 Requirements:
 Principal office in a HUBZone; and
 35% of Personnel reside in a HUBZone
 Must keep track of employees
 Use of part-time employees
 40 hours per month minimum

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MBE/DBE Certification
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 MBE – Minority Business Enterprise
 State Programs
 Requirements vary from State to State
 Certification Required
 Programs generally favor (or set quotas/goals for) contractors
who are owned by minorities and/or women
 DBE – Disadvantaged Business Enterprise
 Program sponsored by the Department of Transportation, but
administered by the States
 Requirements fairly standard among States
 Certification Required
 Programs generally favor (or set quotas/goals for) contractors
who are owned by minorities and/or women

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Supplier Diversity Programs
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 Commercial Programs
 No Government Involvement
 Requirements vary from Company to
Company
 Programs generally favor (or set quotas/goals
for) vendors who are owned by minorities,
women, veterans, people with disabilities
and/or LGBT
 Generally self-certifying and unregulated

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Questions?
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MCMAHON, WELCH AND LEARNED, PLLC
2100 Reston Parkway
Suite 450
Reston, VA 20191
Main: 703-483-2810
Direct: 703-483-2813
klearned@mwllegal.com