July/August 2010

It looks like there's some good news on the horizon, and we all surely could use some of that. It has to do with certification, long a thorn in the side of small business owners and the corporations and government agencies that do business with them.

The review of the Equity in Contracting for Women Act by the Small Business Administration (SBA), which took 10 years (see Publishers Page, March/April 2010, page 1), and the subsequent "final ruling" have received much criticism. After additional review, there is yet another proposed rule, which identifies 83 industries in which woman-owned businesses are underrepresented.

It also includes "approved third party certifier's certification," which could be used in place of the self certification now in place. It is not clear whether third party certification would replace self certification or if the choice to use third party certification could be made by the business owner. The SBA is currently reviewing the comments received (see In Brief, March/April 2010, page 3).

In the meantime, some key officials at the Small Business Administration (SBA) have been looking at the certification processes of two major organizations, the Women's Business Enterprise National Council (WBENC) and the National Minority Supplier Development Council (NMSDC).

NMSDC certifies the ownership validity of both male and female minority-owned businesses. WBENC does likewise for woman-owned businesses, including both minority and non-minority women business owners. Both organizations do site visits and examine documents relevant to ownership, among other things.

WBENC is mentoring the U.S. Business Leadership Network (USBLN) as they put together a certification program for disabled and service-disabled veteran business owners. There is no group (that I know of) that is vetting that these owners hold 51 percent or more of the business, a requirement of both WBENC and NMSDC certification.

Self certification has sometimes been challenged by business owners who lost a contract to a business that they believed was not minority-owned, woman-owned, or even in the small business category.

Each case takes time to evaluate, whereas an acceptance of third party certification such as that of the NMSDC or WBENC, both with stringent standards, would not only eliminate the necessity for such challenges, but would relieve already certified businesses of the burden of going through the same documentation process with each agency.

Acceptance of third party certification is a step in the right direction. Although the period for comment on the proposed rule has elapsed, WBENC, NMSDC, and a number of other organizations submitted timely comments urging the SBA to retain third party certification in the final ruling. Even though the Act specifically affects women business owners, the benefit of third party certification should accrue to minority-owned business as well. I certainly hope so.

When I pray for patience, I add "but hurry." Another 10 years is too long to wait.

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