BUSINESSWEEK ONLINE: FRONTIER - the resource for entrepreneurs  
By Karen E. Klein
MARCH 16, 2000

The Arcana of Qualifying as a Disadvantaged Business

Start with the SBA's vast resources for helping the uninitiated navigate these contract programs


E-Mail Story

Contract Bundling: It Hurts the Small Fry

Now You Really Have to Prove You're Disadvantaged

Is There Any Advantage to Being Disadvantaged?

Smart Answers Archive

Q:  We are looking for help in getting some government contracts for our plastering company, which is 100% minority-owned and operated.
--P.G., Summit, Ill.

A:  The federal government spends about $200 billion annually on service and supply contracts with private industry. Many resources are available to help a small company compete for that business, and government agencies have some compelling incentives to hire those that are deemed "socially and economically" disadvantaged -- generally companies owned by minorities, women, or those in underserved communities. A caution: Be prepared for time-consuming paperwork and some complex regulations.

Your best resources for getting started are the U.S. Small Business Administration and its extensive Web site ( For basic information, click on "offices and services," then scroll down to "government contracts." You can get the phone number and location of your local SBA office from the agency's Answer Desk at (800) U-Ask-SBA.

The local office will give you the information and forms you need to qualify your company as a "small disadvantaged business" or to apply for the 8(a) Business Development Program, which provides general management and technical assistance to help very small companies prepare bids for government contracts. You must be certified before agencies will accord your bid any special status, says D.J. Caulfield, an SBA spokesman.

ADVICE ON COMPETING. At the SBA office, ask to speak with the local "procurement center representative," whose job it is to monitor new government contracts and look for opportunities for small businesses. The PCR can help you find jobs on which to bid and advise you on the fine points of competing for them, Caulfield says.

Once you're confident that you want to pursue federal contracts, go back to the SBA home page. Click on the link to PRO-Net to register with the agency's database of small businesses (generally those with 500 or fewer employees and annual revenues of $5 million or less) that want to do business with the government. There you can post a profile of your business -- including any special criteria you meet and a link to your Web site.

Federal contracting officers regularly review the database, which anyone can peruse, Caulfield says. Those officers often contact qualified companies to notify them about suitable contracts.

IN A "HUB"? PRO-Net is also a good place for your company to identify complementary business with which you can team up to bid on larger government jobs. The PRO-Net site also has a link to the online version of Commerce Business Daily, a government publication that lists all contracts worth $25,000 or more.

If your business is located in one of the 8,000 "distressed communities" and 35% of your employees are from one of those communities, you might qualify for a relatively new program known as the HUBZone Empowerment Contracting Program, Caulfield says. Businesses that are in HUB (Historically Underutilized Businesses) Zones get special advantages when competing for government contracts.

The government's goal is to grant at least 3% of overall federal prime contracts to HUBZone businesses by 2003, putting these companies in line for $6 billion in government money. At the HUBZone Web site (, you can find out more about the program, use a mapping program to find out if your business is in a HUBZone, and apply for certification as a HUBZone business.

Have a question about running your business? Ask our small-business experts. Send us an E-mail at, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.


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