Who Qualifies for Federal Minority Business Programs?

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The federal government operates several programs that are designed to assist businesses owned by minorities and other economically and socially disadvantaged individuals.Those programs provide special preferences to participants based on procurement goals that are designed to compensate businesses for past and present discrimination.

Understanding who qualifies to participate as a social and economic disadvantaged individual has become more complex. This is because significant changes have recently occurred to the economic disadvantage criteria that individuals must meet to initially enrolled in programs or remained active in the programs.

While most programs have the same criteria regarding social disadvantage,  different  thresholds now exist for defining economic disadvantage. Some thresholds are based on personal net worth (PNW), while others are based on total assets, personal income, or some combination of the preceding. home

To qualify as a participant based on social disadvantage, a business owner must certify that he or she belongs to a designated minority group such as one of the following: African-Americans; Latino Americans; Subcontinent Asian Americans; Asian and Pacific Islanders; Native Americans, Eskimos and Aleuts; and Subcontinent Asian Americans.

Persons not belonging to any of the groups above can qualify if they are able to prove they have experienced economic disadvantage. In fact, about 10% of participants in the 8(a) and SDB Programs are Caucasian Americans who do not also belong to a designated  ethnic or racial group; meaning they are white non-Hispanic, etc.

There are about 7000 firms registered in federal government’s Small Disadvantaged Business (SDB) Program. That program automatically enrolls businesses registered as 8(a)  program participants.

The racial and ethnic breakdown of participants in the SDB  program is as follows:

Asian and Pacific Americans:                    881           12.9%

African Americans:                                      2144           31.4%

Latino Americans                                          1582           23.1%

Native Americans, Eskimos, Aleuts         785           1.5%

Subcontinent Asian Americans                  772         11.3%

Caucasian Americans                                      670          9.8%

In addition to the social criteria,program participants must meet economic disadvantage criteria. The table below outlines this rather complex criteria for each program. the table shows the entry criteria for each program, the criteria that must be met to continue to participate in the program, and the agency that certifies the eligibility of a business owner to participate.

Last modified: June 20, 2017

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