Small Disadvantaged Business

Small Disadvantaged Business

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Program History

The Small Disadvantaged Business Certification Program (SDB) strictly pertains to benefits in federal procurement.

SBA certifies SDBs to make them eligible for special bidding benefits. Evaluation credits available to prime contractors boost subcontracting opportunities for SDBs. (SBA) has become, in effect, the gateway to opportunity for small contractors and subcontractors.

Under new federal procurement regulations, the SBA certifies SDBs for participation in federal procurements aimed at overcoming the effects of discrimination. The new guidelines are designed to ensure that benefits used in the federal procurement program are fair and effective, and conform with the U.S. Supreme Court’s 1995 Adarand court decision.

SBA certifies small businesses that meet specific social, economic, ownership, and control eligibility criteria. Once certified, the firm is added to an on-line registry of SDB-certified firms maintained in PRO-Net. Certified firms remain on the list for three years. Contracting officers and large business prime contractors may search this on-line registry for potential suppliers.

Types of SDB Contracts

The program offers several important incentives:

Price evaluation adjustment: qualified SDBs receive a price evaluation adjustment of up to 10 percent on procurements where mandated by regulation. The price evaluation adjustment for SDBs bidding as primes became effective October 1, 1998. Regulations mandate this approach in competitive acquisitions over the simplified acquisition threshold (usually $100,000) where the SIC Code for the prime contract is authorized by U.S. Department of Commerce benchmarks. The price evaluation adjustment does not apply to 8(a) acquisitions and small business set-asides.

Evaluation factor: qualified prime contractors can receive a credit when using SDBs as subcontractors. This evaluation factor for SDB participation became effective January 1, 1999. The incentive applies only to competitive negotiated acquisitions over $500,000, or $1,000,000 in construction. The evaluation factor does not apply to small business set asides, 8(a)