A Small Disadvantaged Business is a small business that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged.
Small Disadvantaged Business status makes a company eligible for bidding and contracting benefit programs involved with federal procurement set aside contracts.
Businesses must be certified by
the Small Business Administration (SBA) to qualify for Small Disadvantaged
A publicly-owned business may be
considered a Small Disadvantaged Business if at least 51 percent of its
stock is unconditionally owned by one or more disadvantaged individuals and
if the public company's management and daily business is controlled by one
or more disadvantaged individuals.
Identified disadvantaged groups include: Notes
Economically disadvantaged individuals are defined as those for whom impaired access to financial opportunities has hampered the ability to compete in the free enterprise system, in contrast to people in similar businesses who are not identified as socially disadvantaged. Economically disadvantaged individuals are socially disadvantaged and their ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities, as compared to others in the same or similar line of business who are not socially disadvantaged.
To be eligible as a small disadvantaged business a firm must qualify as a small business in accordance with the standards set forth by the Small Business Administration (SBA), i.e., ownership, affiliation, profit, and number of employees. Also, a firm must be socially or economically disadvantaged pursuant to Section 8(a) of the Small Business Act.
At least one objective distinguishing feature that has contributed to social disadvantage, such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged.
Personal experiences of social disadvantage stemming from the objective distinguishing feature or features set forth in the preceding paragraph.
The experiences must have been in American society, not in other countries, and must have been substantial and chronic. Negative impact on entry into or advancement in the business world because of the disadvantage.
SBA considers any relevant evidence in assessing this element. In every case, however, SBA considers education, employment, and business history, where applicable, to see if the totality of circumstances shows disadvantage in entering or advancing in the business world.
Self certification as an Small Disadvantaged Business prime contractor for statistical purposes is acceptable
However, anyone whomisrepresents their status as a small disadvantaged business for the purpose of securing a contract or subcontract shall:
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