How do MBEs participate in the Small Disadvantaged Business (SDB) program? | Wednesday December 31st, 2003 | |
The SDB program is statutorily authorized to provide a vehicle through which Federal agencies can make prime contract awards and influence subcontract awards to small businesses owned and controlled by individuals certified as socially and economically disadvantaged.
The SDB program was originally authorized by law to enable the U.S. Department of Defense to meet its goals for prime and subcontracts awarded to small disadvantaged businesses. Under the DoD program, requirements could be set-aside for competition among SDBs and evaluation points were awarded to SDB offerors on unrestricted procurements that included an SDB preference. Contractors self-certified their status as SDBs at the time of offer submission and credible challenges to these self-certifications were resolved by SBA. DoD buying activities were authorized to use the SDB program and the 8(a) program to meet their goals for contracting with disadvantaged businesses.
In 1994, Congress provided legislative authority for all Federal agencies to utilize these procedures for contracting with SDBs. However, before the implementing regulations could be developed, the program was suspended for DoD and other agencies pending development and promulgation of revised rules. These revised rules significantly changed the way the current program is operated as compared to the DoD procedures used up until that time.
The most significant changes were revised rules that required SDBs to be pre-certified by SBA. Currently, small businesses seeking SDB certification submit applications to SBA, and SBA makes a determination of whether the applicants are socially and economically disadvantaged. Once certification is obtained, an SDB is approved for participation for three years and certifications may be renewed for subsequent periods of three years provided the business is still small and requirements are met for continued disadvantaged status. Section 8(a) participants are automatically considered SDBs as long as they are small for the applicable size standard.
Currently, the benefits associated with SDB certification are largely those derived from SDB subcontracting goals and the requirement to utilize SDBs in subcontracting plans. The “rule of two,” which was used to determine when a requirement would be set aside for competition limited to SDBs, has remained suspended since 1995. Additionally, DoD is statutorily exempt from the requirement to use SDB set asides or evaluation points on unrestricted procurements during any year following a year in which DoD awards at least five percent of its total procurement dollars to SDBs.
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