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Being certified as a minority- or woman-owned business enterprise (MWBE) confers some advantages. In fact, New York State has a set MWBE goal, notes Lauren Linakis, assistant director of the Small Business Development Center at Farmingdale State College,
“Thirty percent of New York State contracting dollars need to go to a minority or woman-owned business that is certified. And they have met that goal for the past few years,” said Linakis, adding, that a business still must compete for the bid, and include its price and proposal.
Another advantage to being certified is there are various networking and educational events for MWBEs, including an annual MWBE forum in Albany where businesses meet with state agencies and network with each other, and learn about New York state procurement.
Yet navigating the certification process is not as simple as you might think.
Be patient: It takes time
A business going through the certification process must be organized and have all of the necessary business documents together, notes Linakis.
Helping businesses get MWBE certified is something the Small Business Development Center does.
“We don’t charge, and we can help the businesses with all the documents that are needed,” Linakis said. “There’s a lot of paperwork and organizational skills that are involved in getting the application together.”
Be patient: Though the wait time for certification is shorter than in the past— it was previously about two years—it currently takes about four months, notes Linakis
“So, the sooner you get in the application the better, because there is going to be that lag time for the business,” she said.
Certifiers will check to ensure the business is truly compliant, which means that the woman or minority owner has to own at least 51 percent of the business, and they must have complete control of the company.
“They can’t share resources with another company,” Linakis said. “They can’t outsource key functions of the company. The woman or minority owner definitely needs to show control.”
Getting your ‘docs’ in a row
You have to be in business at least one year before you can even apply for the certification, notes Ree Wackett, advanced certified business advisor and small business educator for the New York State Small Business Development Center at Stony Brook University.
“The reason why they look for that one year in business is to show what’s commonly called, ‘an ability to perform,’’ Wackett explained. “It illustrates to the certifying entity that you’ve been in the marketplace, you’ve competed, maybe you’ve dabbled in procurement. And a year is a good length of time to illustrate that you’re a real business; you’re competitive.”
Applying requires specific documents, including both business and personal tax returns, proof you’re a member of the minority group or that you’re a woman, copies of the paperwork that were required to establish your corporation, LLC or DBA business, such as certificates of incorporation or articles of organization.
“They will also ask for any licenses and/or permits that you possess to be in the industry which your business is in,” Wackett said.
Though the process isn’t difficult, Wacket asserts it’s very tedious.
“In addition to the documents, there’s an entire application that you have to answer a lot of questions,” Wackett said. “And those questions mostly are in regard to who completes specific tasks for the business.”
The reason for the government’s in-depth probing is to prevent fraud.
“The state wants to make sure that the person upon which the certification is based is truly the owner/operator of the business,” she added.
Certification specifications
Because of the in-depth process, applying for an MWBE can be challenging to many people, notes Bennett Weiss, president of North Babylon-based Long Island RFP.
“It requires a lot of financial, personal and business information that takes a while to prepare,” Weiss said. “I’ve noticed that a lot of my clients get frustrated with the process.”
Even when experts are helping a client apply, it can time out—more than once—and they have to start the application over.
While it might be useful—in some ways—to have certifications from other agencies, they should not be confused with a state certification.
For example, you might be certified by a chamber of commerce, but that doesn’t mean anything when soliciting a state contract, notes Erin Crouthamel, vice president of marketing and business development for Long Island RFP.
Some industry certifications might help when looking at corporations, such as Victoria’s Secret, Netflix and AMC Theatres, which do a lot of diversity supplying resources.
“So, there’s a benefit to those, but they’re more on the commercial end rather than on the government end,” Weiss said.
People often apply for state government contracts don’t have the right certification and don’t understand why they’re being rejected as an MWBE, Crouthamel said.
“It’s really important that the people applying are educated on the specific application for each designation and then how that applies to government contracting,” Weiss said.
If you’re a woman-owned business, start with a New York State certification because on the website (www.esd.ny.gov) they offer you the ability to get certified in other jurisdictions within the state at the same time, Weiss advises.