New York State’s Minority- and Women-Owned Business Enterprise (MWBE) certification program promotes equal economic opportunities and eliminates barriers to minority- and women-owned businesses in state contracts. The program has two primary goals:
- To ensure that minority- and women-owned businesses have increased opportunities to compete for state contracts
- To provide these businesses with access to financial and other resources that can help them compete more effectively. As a certified MWBE, you may be more easily able to find small business loans for women or minorities.
In this article, we look at MWBE certification, who is eligible and how to apply. We’ve also included resources to help you research the kinds of contracts that are awarded and review some barriers to approval.
What is the MWBE certification program?
In 1988, New York State took key steps to “…promote employment and business opportunities on state contracts for minorities and women,” by signing the MWBE Certification program into law. Under this statute, “state agencies are charged with establishing employment and business participation goals for minorities and women.”
The law requires that all state contracts have a minimum MWBE participation goal of 30% (meaning that 30% of the awarded funds are targeted to be spent with MWBE-certified businesses). For example, for a contract worth $1 million, $300,000 must be awarded to MWBE-certified companies.
When a business obtains MWBE-certification, they:
- are listed in the public Directory of Certified Minority and Women-Owned Business Enterprises.
- can bid on procurement and contracting opportunities with New York State agencies and authorities.
- gain access to a statewide network of services that includes business development workshops, webinars, classes and customized technical assistance targeted to MWBEs (visit the New York State Contract System for examples).
- have access to special loan and bonding programs, like the Bridge to Success loan program, which helps MWBE-certified small businesses bid more competitively by providing pre-contract funding commitments to cover the labor, material and other costs needed to perform said contracts.
Who is eligible for MWBE certification?
There are strict eligibility requirements and the thorough approval and recertification processes ensure that these are continuously met. To be eligible, a business must:
- be at least 51% owned and operated by women and/or minority owners. It’s important to note that ownership alone doesn’t meet eligibility — owners must be actively involved in day-to-day operations. Also, minority and/or women owners must each have a net worth of less than $3.5 million, though there are allowable deductions.
- be a privately owned, for-profit business.
- have fewer than 300 full-time-equivalent employees.
- be in operation for at least one year, with business financials and bank records available. (Note: It’s not sufficient simply to have formed the company a year prior.)
Should every business apply?
Some businesses, like those in construction-related fields, may benefit tremendously, because New York State awards billions of dollars annually for building projects. For others, the potential for contracts is less defined, but is worth exploration. It’s a good idea to speak with someone who is knowledgeable about the process, like representatives from Pursuit, Empire State Development’s Division of Minority and Women’s Business Development, or your local Small Business Development Center. Use the resources in this article to review the types of contracts available and see how many may align with your business.
It’s also important to consider your capacity to fulfill the contracts. If your business has only a few employees and has never had a job with a budget larger than $100,000, you may need to focus on scaling up before tackling the types of larger contracts associated with state projects.
How do you apply for MWBE certification?
If you’re familiar with the MWBE program, chances are that you’ve heard the application process is rigorous—and that’s a good thing! Stringent qualifications ensure the program’s integrity, and preparing the application helps small business owners clarify goals and strategies. Consider it time that’s well-invested in your business’s strength and success.
That said, the application process for MWBE certification has become easier. Notably, it’s all online, which speeds up the process and helps applicants reduce paperwork. After you’ve determined that you want to move forward, register via the NYS Contract System website; there’s no fee to apply. Once you register, review the application and required attachments. All communications about the process will be made via email.
What’s needed to apply for MWBE certification?
While there’s a lot of information requested, it shouldn’t be too complicated for business owners. In addition to basic information (such as who owns and operates the business, their roles and responsibilities, etc.), applicants will also need to provide the following:
- Resumes for owners
- Financial information (like tax returns, financial projections and bank statements)
- Proof that the business has the required city, county or state registrations and licenses
- Proof of US citizenship or permanent resident-alien status
How long does the certification process take?
The length of the application process depends on how prepared you are and how diligently you work on it. If you have the information at-hand, it’s estimated that a full application can be submitted in three to four weeks.
After that, the review process typically takes about nine to 12 months from time of submission and retrieval. When the application review process is complete, an interview may be conducted at the place of business or by phone.
What happens when your application is approved (or denied)?
Once your application is approved and your business receives certification, you can start bidding on contracts immediately. Certification is good for three years and businesses must recertify at the two-year mark. Go to New York State Contracts to the “View Opportunities” link to see what’s available and how to bid.
Many small businesses, and especially those just starting out in the contract-bidding process, may want to act as subcontractors first to gain experience and build capacity. Keep your profile current and use the codes that represent all the products and services you offer. For example, if you’re a paving company that also does drywall, be sure that’s represented in your profile with the appropriate codes.
If your application is denied, it could be due to incomplete or incorrect information, or insufficient proof that all eligibility criteria were met. If this happens, applicants can appeal the decision, or you can wait 90 days and reapply. It’s advisable to meet with an advisor that’s knowledgeable on the certification process that can help you understand the issues in your application and how to overcome them.
More valuable resources and information
Once your business receives certification, these resources provide information on opportunities for certified MWBE businesses:
- Bidlinx, which monitors more than 2,000 bid-source sites daily
- Bridge to Success Loan Program, which provides pre-contract funding for MWBE-certified small businesses to build capacity and make them more competitive. It’s one of many programs that make small business loans for women and minorities more accessible.
- Directory of Frequently Purchased Commodities and Services by New York State Agencies, which tracks individual agencies’ expenditures by category
- Empire State Development for information on doing business in New York State
- New York State Contract Reporter is New York State’s official source for contracting opportunities
- New York State Contract System is the gateway for MWBE businesses
- Open Book NY for access to active NYS Agency contracts
Keep in mind that Pursuit can help you at all stages of business startup and growth. Contact us for more information on our Business Advisory Services.
