Supplier diversity programs can be to your advantage

by Ian M. Berkowitz

As I travel the country discussing the opportunities of being a government contractor, I often get asked by business owners how to get the inside track or the edge over their competitors. What is a simple yet powerful fact is that both the public and the private sector strongly desire to promote and offer opportunities to any and all businesses, especially women, minorities, handicapped, veterans, small businesses and those that have been discriminated against in the marketplace.

This advantage might also work for you equally as well in the private sector. Yes it’s true, companies like Dell Computers, Boeing, Apple Computer, Cisco, Kroger, Publix, Marriott, Hewlett-Packard, Dial, Kraft, Xerox, Avis, Motorola and many, many more, all follow the government’s lead in offering opportunities to businesses that can use a bit of an edge over large businesses. Most of these programs administered by these large private companies follow the same rules and guidelines espoused by the federal government and become great business opportunities for all types of small businesses.

In order to secure the many large private company business opportunities, it is important to know what types of programs are out there for you to take advantage of in order to grow your business and take advantage of the benefits. There are many programs that create advantages for specific individuals and businesses and knowing the right one will put you in the best position to take advantage of them.

The U.S. Small Business Administration is the primary government agency that provides the framework and certifications for the largest and most widely known and used contracting advantage programs. Women and veteran business owners possess certain advantages and can self certify by simply acknowledging that they are owned and controlled by a woman or a veteran when they apply for a contract or submit a bid.

Small business owners can also self certify as long as the size of their business falls under the SBA size standard for their industry. However, those looking to take advantage of contracts as a minority through the 8(a) program, the federal government’s largest and most widely recognized contracting assistance program, must submit a formal application and be approved.

As specified by the SBA, in order to qualify for the 8(a) program, the business must be small and must be owned and controlled by a socially and economically disadvantaged individual or individuals. You must remember that the term owned is defined as 51 percent or more. Under the Small Business Act, certain presumed groups include Black Americans, Hispanic Americans, Asian Pacific Americans, Native Americans and Subcontinent Asian Americans. That means that if you fit in that group you are automatically considered socially disadvantaged for the program.

However, other individuals can be admitted to the program if they show through a "preponderance of the evidence" that they are disadvantaged because of race, ethnicity, gender, physical handicap, or residence in an environment isolated from the mainstream of American society.

What that means for you is that if you can prove that you have been discriminated in the business world due to one or more of these other factors, you can and will be deemed socially disadvantaged. For example, if a business owner that is wheelchair bound could prove that he or she has been discriminated in business as compared to non-wheelchair bound business owners then they will be eligible. In the 8(a) program, once you have the social component satisfied then you must also meet the economic disadvantage test, and have a net worth of less than $250,000, which specifically excludes the value of the business and personnel residence. However, many of the private corporate diversity programs do not have an economic component; therefore, your financial status is not an issue.

Once you submit your application and get accepted into the program then you not only receive government contracting benefits but also education, mentoring and training program benefits. The Small Business Administration provides a series of business training sessions on Cost and Pricing, Accounting Systems, Indirect Costs and Rates, Cost Proposals and Relationship Skills. This training is offered by SBA district offices in 21 cities around the country and can provide you with one-on-one counseling that would have otherwise cost you thousands of dollars to obtain.

The most important thing to remember is once you gain the edge with your certification, then take it to the private sector and take equal advantage of what these big companies may have to offer you. At the very least you can become a big part of their “giving back to the community” by offering you tremendous business opportunities, which you might not have benefited from, had you not known about the program in the first place.

Ian M. Berkowitz is a former attorney/advisor with the United States Small Business Administration in Washington D.C. During his tenure with the Federal Government he specifically worked in the areas of disaster relief for homeowners and businesses and government contracting. He is currently a practicing business and real estate attorney in Boca Raton. In addition to his law degree, Ian also holds a Masters Degree in Government from The John Hopkins University.