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Certification vs. set-asides: alternate strategies for government sales success.

"How do I get certified so I can get government contracts?"

"My company is a HUBZone/ SDV/ 8(a)/ SDB/ woman-owned/ minority-owned business. Why don't I get contracts from the government?"

"Where are the 8(a) set-asides listed?"

"Set-asides are for minority-owned, HUBZone, or 8(a)/SDB companies. How do I have a chance in the federal market?"

These are true examples of the questions we get every day. They show the extent of confusion in the marketplace between socio-economic programs and real-dollar opportunities. It's time to put these strategies in perspective, so you can effectively and efficiently grow your business.

Let's look first at the definitions of "certification" and "set-aside":

Certification is the process of applying to, validating and being accepted by an independent third party as meeting specific ownership or geographic criteria. Achieving certification only documents that your company has met some criteria about who you are, not what you can do or how good you are.

Set-aside tells you that an agency procurement office will accept bids only from a limited group of bidders responding to a specific opportunity, already funded, for purchase of a specific delivery of a designated product or service.

Let's look at it another way: Certification is a hunting license, while set-asides are real dollars available to a subset of capable suppliers.

The objective: How do I position my company to get government business? Well, there are a number of alternative strategies, each of which makes a useful contribution.


Let's look at certification first. From a federal government standpoint, your company (business) can be certified as a participant in the SBA 8(a) program, or as a small disadvantaged business, or a service-disabled veteran-owned business, or as a business located in a designated HUBZone. You'll note that minority-owned or woman-owned is not a category that is certified by the federal government. (Certification of woman-owned businesses may begin later this year, according to SBA.)

Likewise, the federal government does not recognize certifications by other (state, regional or local) governments or private organizations.

Small Business Status

"Wait a minute," you say. "How do I certify to Uncle Sam that I am a small business?" In a nutshell, you tell them:

* in your CCR registration;

* in the Representations and Certifications section of an RFP (section 52.219-1, Small Business Program Representations); and

* in the interaction you have with Dun & Bradstreet in responding faithfully in its recurring phone verification.

FAR Subpart 19.3 (http:// Subpart%2019_3.html) is the official explanation of this status claim and determination.

Why Get Certified as 8(a), SDV, etc?

Just like computer geeks get multiple certifications like MCSE and CCNA and CSIM, it pays to be an 8(a)-certified, service-disabled veteran-owned, woman-owned, Na tive American or HUBZone business because the more niches you fill, the better your chances of narrowing the competition. Use every advantage you can to enhance your chances of differentiating your business, but remember that industry certifications, professional certifications (CPA, MD, etc), training certifications, ISO 9000 status and other tags can be just as significant in separating you from the pack.

What Do I Get By Just Being a Small Business?

The interesting thing is that the largest number of set-aside opportunities are, by far, for ... did you guess it? Plain, old, ordinary small businesses. In 2005, $79 billion went to small businesses, while only $10 billion went to 8(a), $11 billion to other SDBs, $6 billion to HUBZone, $2 billion to SDVs and $10 billion to woman-owned firms (even though there is no formal set-aside for WBEs). And in these numbers there is assuredly some double-counting of companies that qualify in more than one category. (A bill pending in Congress would eliminate double-counting.)

How Do I Focus My Sales Efforts?

Review and evaluate every small business set-aside in your industry, not just the 8(a) or SDV set-asides. Take advantage of every opportunity. If an opportunity is set aside for small businesses, you will be competing with others your size, not the large businesses with big proposal operations. And by working on smaller contracts, you can develop and grow your company with much less risk. Build your capacity and your reputation one step at a time.

By Thomas D. Johnson


Thomas D. Johnson, the publisher of Set-Aside Alert, has more than 30 years' experience in government contracting.
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Author:Johnson, Thomas D.
Publication:Set-Aside Alert
Date:Jun 29, 2007
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