Diverse Supplier Definitions

Small Business

A small business is defined by federal law as “one that is independently owned and operated and which is not dominant in its field of operation.” The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately.
Click on the links below for more information about:

  1. Small Business – The Small Business Act (Act) established the SBA to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise, to insure that small businesses receive a fair portion of the Federal Government’s purchases, and to maintain and strengthen the Nation’s overall economy.
  2. Women-Owned Small Business – A woman-owned business is defined as a business that is owned and controlled 51% or more by a woman or women. Currently, a woman-owned certification process is not required for federal contracts. (Self certification)
  3. Veteran-Owned Small Business – (FAR 52.219-9, 38 USC 101(2)) – A small business concern that is at least 51% owned by one or more veterans (as defined in 38 USC 101(2)), or, in the case of any publicly owned business, at least 51% of the stock is owned by one or more veterans. In addition, one or more veterans must control the management and daily business operations. There is no veteran-owned certification process to complete, simply self-certify. (Self certification)
  4. Service-Disabled Veteran-Owned Business – (FAR 52.219-8, 38 USC 101(16)) A small business concern that is at least 51 percent unconditionally and directly owned by one or more service-disabled veterans may represent itself as a Service-Disabled Veteran-Owned Small Business Concern in the Central Contractor Registry. To participate in the Federal marketplace, the Veteran must have a service-connected disability that has been determined by the Department of Veterans Affairs or his or her respective military branch of service. For more information, please go to http://www.sba.gov/about-offices-content/1/2985.   There is no service-disabled veteran-owned certification process to complete, simply self-certify. (Self certification)
  5. HUBZone Small Business – The Small Business Administration’s HUBZone Program is designed to promote economic development and employment growth in distressed areas by providing access to more federal contracting opportunities. A HUBZone is defined as a “Historically Underutilized Business Zone.” (*Must be Certified by SBA **There is an Expiration Date)

    To qualify for the program, a business must meet the following criteria:

    • It must be a small business by SBA size standards;
    • Its principal office must be located within a HUBZone, which includes lands on federally recognized Indian reservations;
    • It must be owned and controlled by one or more U.S. citizens (N.B.-this means any level of ownership in an applicant small business by another company would result in a decline). Approved ownership can also be by a Community Development Corporation or Indian tribe; and
    • At least 35% of its employees must reside in a HUBZone.
  6. Small Disadvantaged Business – SBA certifies SDBs to make them eligible for special bidding benefits. SDBs are at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.
    • 8(a) Business Development Program – The SBA administers two particular business assistance programs for small disadvantaged businesses (SDBs). These programs are the 8(a) Business Development Program and the Small Disadvantaged Business Certification Program. While the 8(a) Program offers a broad scope of assistance to socially and economically disadvantaged firms, SDB certification strictly pertains to benefits in Federal procurement. (Companies which are 8(a) firms must be Certified by SBA **There is an Expiration Date)
    • Small Disadvantaged Business Concern means:
      • It has received certification or has self-certified as a small disadvantaged business concern consistent with 13 CFR part 124, Subpart B;
      • No material change in disadvantaged ownership and control has occurred since its certification;
      • Where the concern is owned by one or more individuals, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and
      • The SBA suspended the SDB certification program on 9/30/2008. As of 10/1/2008, if you meet the criteria above, please self-certify as a SDB. If you have received a certification prior to 9/30/2008, you can certainly upload the certification.
  • Socially and Economically Disadvantaged Individuals include: Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, and Asian-Indian Americans.
  • Native Americans include: A person who is an American Indian, Eskimo, Aleut or Native Hawaiian, and regarded as such by the community of which the person claims to be a part. Native Americans must be documented members of a North American tribe, band or otherwise organized group of native people who are indigenous to the continental United States and proof can be provided through a Native American Blood Degree Certificate (i.e., tribal registry letter, tribal roll register number).
  • Hispanic Americans include: A U.S. citizen of true-born Hispanic heritage, from any of the Spanish-speaking areas of the following regions: Mexico, Central America, South America and the Caribbean Basin only. Brazilians shall be listed under Hispanic designation for review and certification purposes.
  • Black Americans include: A U.S. citizen having origins in any of the Black racial groups of Africa.
  • Asian-Indian Americans include: United States citizens whose origins are in India, Pakistan, or Bangladesh.
  • Asian-Pacific Americans include: United States Citizens whose origins are in Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Territories of the Pacific Islands, the Northern Mariana Islands, Laos, Cambodia, Taiwan, Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall Islands, or the federated states of Micronesia.
  • North American Industry Classification System (NAICS) – The SIC has been replaced by the six-digit North American Industry Classification System (NAICS) code. The new NAICS system was developed to reorganize business categories on a production/process-oriented basis. The purpose behind the creation of the NAICS classification system is specifically for governmental regulations and census reports.
  • Subcontract – the term “subcontract” shall mean any agreement (other than one involving an employer-employee relationship) entered in to by a Government prime contractor or subcontractor calling for supplies and/or services required for performance of the contract, contract modification, or subcontract.
  • Sub-Net – Prime contractors use SUB-Net to post subcontracting opportunities. These may or may not be reserved for small business, and they may include either solicitations or other notices — for example, notices of sources sought for teaming partners and subcontractors on future contracts. Small businesses can review this web site to identify opportunities in their areas of expertise. While the web site is designed primarily as a place for large businesses to post solicitations and notices, it is also used by Federal agencies, state and local Governments, non-profit organizations, colleges and universities, and even foreign Governments for the same purpose.

Certification or Qualification Requirements

  • Small Business: To qualify as a small business a business concern eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121. See the SBA Size Standards home page for more information.
  • 8(a): The applicant firm must be a small business, must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and must demonstrate potential for success. Please see http://www.sba.gov/content/8a-business-development for more information.
  • HUBZone: To participate in the HUBZone Empowerment Contracting Program, a concern must be determined to be a “qualified HUBZone small business concern.” A firm can be found to be a qualified HUBZone concern, if:
    1. It is Small by SBA Standards
    2. It is located in an “historically underutilized business zone” (HUBZone)
    3. It is owned and controlled by one or more U.S. Citizens, and
    4. At least 35% of its employees reside in a HUBZone.
  • See the HUBZone home page
  • SDB: There are several different applications for various business legal structures. Refer to the SBA for more information.

If a small business self-certifies that it has received SBA’s SDB certification, the office of Supplier Diversity must verify this in the Central Contractor Registration (CCR) site.