This blog is for all those NYC business owners who are either women or minorities. If you qualify, - M/WBE Certification can help grow your revenues by facilitating bidding for government contracts.
Why get this Certification?
M/WBE certified businesses get mentorship services, opportunities to network with potential clients and a listing in the directory of businesses certified by NYC. Most importantly, this certification allows businesses to know when NYC agencies announce bids for contracts. The Local Law 129 (2005) sets goals (not legally binding) that New York City agencies should strive to assign a certain percentage of smaller contracts (between $5,000 and $1 million in expenditure amount per contract) to minority or women-owned businesses. For example, for smaller construction contracts, Black Americans should receive 12.63% of total annual agency expenditures on such contracts and Hispanic Americans – 9.06%; whereas for professional services contracts under $1 million, Black Americans should receive 9%, Hispanic Americans – 5% and Caucasian females – 16.5% of total annual agency expenditures on such contracts. For more information, follow this link to the Local Law 129: http://ddcftp.nyc.gov/inet/pdf/LocalLaw129.pdf. To achieve these goals, the Small Business Services contacts certified businesses to inform them of the opportunities to bid.
However, according to City Council Report (2010), also described in the article “Minority Businesses Struggle to Secure City Contracts” by Shane Dixon Kavanaugh (New York Times, Sept 7, 2010), the number of contracts that went to M/WBE-certified businesses is less than half of the targeted goals. The City set 368 contracting goals across 35 agencies, but met only 49 of them, or 13%. Out of more than $5.3 billion in contracts in July-December 2009, only $87 million, or 1.6%, went to M/WBE-certified businesses.
Regardless of the setbacks, the program is there to assist M/WBE-certified businesses. Business owners that qualify for the certification should seriously consider taking advantage of this opportunity.
Who is eligible?
Your business has to be selling products or services for at least one year and have a real and substantial presence in the geographic market of New York City (such as an office, or at least one full-time employee, or at least 25% of gross receipts for each of the last three years should come from the City). The geographic market includes Nassau, Putnam, Rockland, Suffolk and Westchester counties in New York and Bergen, Hudson and Passaic counties in New Jersey.
Your business has to be at least 51% owned, controlled and operated by US citizen or permanent resident who is a woman or a minority (Black, Hispanic, Asian-Pacific or Asian-Indian). Note that Portuguese and Spanish ethnicities are not considered Hispanic.
Applying businesses have to register with New York City as a vendor, complete the application and provide supporting documentation. If application is denied, the applicant has 60 days to file an appeal. If this deadline is missed, the application has to wait two years before he or she can submit another application.
Even though the application is straightforward, the list of supporting documentation is extensive and may take a while to put together. It includes proof of immigration status, all licenses and permits, leases, tax returns for three years, copies of agreements that show business activity, contracts with clients, as well as purchase receipts, loan agreements, payroll records, etc.
Other Similar Certifications
In addition to the certification offered by New York City, there is a number of other state, federal and private agencies that offer similar certifications. One of them is New York State (more information is available at http://nylovesmwbe.ny.gov/). Another set of certifications is offered by the Small Business Administration (more information is available at http://www.mwbe.com/cert/certification.htm ). In the past, a business owner could submit one application to a number of agencies at once to obtain several certifications. However, currently all certifications require separate applications and private agencies charge application fees (City, State and Federal applications are free). Also, once qualified in New York State, it is possible to get your application expedited in New York City through Fast Track program.
On one hand, the process seems to be onerous and the current statistics are not in favor of M/WBE-certified businesses in terms of getting government projects. But the good news is that the business owners do not have to navigate this process alone. The Department of Small Business Services offers free M/WBE Certification workshops where all your questions get answered. Contact (212) 513-6311 or email@example.com for more information. As the certification program expands, more M/WBE business will get their fair share of government contracts.