Is MBE/WBE/DBE Certification Worth the Hassle?
Denise Farris
11/02/09
While it can be difficult, the certification process has benefits beyond your business.

The  certification process for minority-owned (MBE), women-owned (WBE) or disadvantaged (DBE) business enterprises can be detailed and somewhat arduous. The process typically requires proof of company ownership, bylaws, financing arrangements, purchase agreements, customer lists and other confidential information. Interviews can be offensive. And sometimes, a “disadvantaged” status can even be a disadvantage. So is certification worth the hassle? The answer is, “Yes!” The certification process provides benefits for more than just your small business.

Government Clients
Government clients are consistently the largest purchasers of goods and services regardless of economic boom or bust. These organizations are often committed, by law, to working with minority- and women-owned and/or disadvantaged business enterprises. Getting certified can open new opportunities for your business.


Certifications Increase Benefits
Small business is important to a strong economy. As most minority- and women-owned businesses are “small,” their increased growth justifies higher budgets for their ongoing development. Higher budgets mean more incentives benefiting all small business owners through increased loan, investment, bonding and training programs.

Certification Provides Statistical Data
The certification application provides an efficient mechanism for gathering legally required statistical data.

Applicants must identify themselves as either a minority- or woman-owned business by proving 51 percent ownership/ control by the applicant owner. Proof of status and availability is necessary to justify these programs.
The application additionally identifies “disadvantaged business” status. Minority- and woman-owned business enterprise certification is based on the minority or gender status of the individual. The disadvantaged business enterprise must additionally prove that it is under a certain size threshold as measured either by employees or gross annual revenues per NAICS code; and, that its minority or woman owner’s personal net worth is $750,000 or lower.

Identifies  Availability of MBEs, WBEs and DBEs
Government procurement goals typically are based to remedy the difference between availability and under-utilization. Also a goal typically requires proof that two or more companies are capable of performing a scope of work. Thus, certification is especially important to justify goals in general and goals for scopes having few minority- or woman-owned businesses. An increase in the number of certified business enterprises can result in more opportunities for all certified businesses.

Creates Visibility for Your Company
Once certified, your company is entered into a government database, which enables agencies to promptly contact you regarding procurement opportunities. In addition, your company is listed in a directory which enables other companies seeking MBE/WBE/DBE companies to locate you by name or work scope.

Identifying and Updating of Vital Statistics
        Statistical backup is the crucial defense against program challenges. If you are not certified, how can the government rely on accurate availability data within its area? How can it determine what percent of government business the MBE/WBE/DBE companies are securing? Certification provides an efficient method enabling the government to capture data on these key issues.
    For all of these reasons, MBE/WBE/DBE certification is worthwhile. When you look at it in terms of justifying additional funding for small business development programs, you could say it’s a civic duty. And finally, increasing the procurement supplier pool is just good business for everyone.

Denise Farris practices commercial construction, business and equine law. She has served as the past chairperson of the Missouri Bar Construction Law Committee and the Kansas City Metropolitan Bar Committee. She is a member of the national steering committee of the American Bar Association’s Forum on the Construction Industry. She can be reached at (816) 842-0800  or dfarris@farrislawfirm.com.