Obtaining Disadvantaged Business Enterprise/Minority Status for Your Process Serving Firm

• July 10, 2014
• by Kimberly Faber
• Business Tips

Since 1983, a statutory provision has required the United States Department of Transportation to ensure that 10% of government funds authorized for highway and transit financial assistance programs be extended to Disadvantage Business Enterprise. The goal of the program was to ensure firms have equal opportunity to work on federally funded government contracts.

A Disadvantage Business Enterprise (DBE) is a small business owned by a woman or minority group member, as certified by the Department of Transportation. In order to receive DBE certification, your firm must meet a number of requirements, submit an application and financial statements, allow for an on-site visit, and submit to other requests from the certifying body.

This means that a certain number of government contracts must be awarded to DBE firms. Process servers who are eligible for receiving minority status might not be aware of this opportunity. Should your firm obtain minority status, you will become eligible for government contract work that you would not otherwise be able to get. If you are eligible, this can be a great opportunity to expand your business, market to a new client base, and grow your business.

In order to assess whether your company is eligible for DBE status, or for a state-level minority program, review the criteria below.

Disadvantaged Business Enterprise (Federal)

Granted by the United States Department of Transportation, being certified as a Disadvantage Business Enterprise (DBE) will make your process serving firm eligible for government contracts that must be fulfilled by minority contractors.

According to the United States Department of Transportation website, the goals of the DBE program are:

• To ensure that small disadvantaged business enterprises (DBE) can compete fairly for federally funded transportation-related projects.
• To ensure that only eligible firms participate as DBEs.
• To assist DBE firms in competing outside the DBE Program.

In order to apply for DBE certification, your firm must meet a number of criteria, submit to an on-site evaluation of your business, fill out a personal financial state

Criteria

In order to meet the criteria for DBE certification, your firm must meet requirements in:

• Social and Economic Disadvantage
• Personal Net Worth
• Business Size Standard
• Ownership
• Independence
• Management and Control
• Proper Licensure and Credentials
• Social and Economic Disadvantage

For this program, according to information on DBE, minority groups include women, African Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Americans, and other minorities found to be, “disadvantaged by the regulations or any individual found to be socially and economically disadvantaged on a case-by-case basis.”

Personal Net Worth

Having a personal net worth of less than $1,320,000 would be a potential qualification for DBE. This excludes equity in the individual owner’s personal residence.

Business Size Standards

In order to be eligible, your firm must meet the definitions outlined by the Small Business Administration, including no annual gross receipts over $22,410,000 in the previous three fiscal years.

Ownership

The business must be a for-profit small business, and the person who qualifies as socially and economically disadvantaged must own at least 51% interest and control daily management and business operations.

Independence

Your firm cannot be affiliated with another firm in such a way that forfeits independence and control of facilities, equipment, financial support, personnel, etc.

Management and Control

Much like ownership, the disadvantaged owner must own management, be the policymaker, and the day-to-day operations manager of the firm when it comes to running the business.

Proper Licensure and Credentials

If your state requires process servers to be licensed or registered, you must abide by those standards in order to apply for DBE status.

The California Department of Transportation has put together the below flowchart to help applicants understand the DBE certification process:

State Equivalent Programs

In addition to Federal DBE status, 27 states have similar programs. To understand opportunities within your state, click on the associated website in the below table.

Process Servers Who Have Obtained Minority Status

Torri’s Legal Services, based in Washington D.C. and serving throughout Virginia and Washington, is DBE, MBE, and SWaM certified. In addition to the Federal certification, Torri is classified as a Minority Business Enterprise (MBE) in Maryland and a Small, Women-owned, and Minority-owned Business (SWaM) in Virginia. This has made her firm eligible for government contracts that must be granted to minority contractors.

In a recent post about her newly-granted certification, she had this to say:

In order to be certified as a minority business, we had to provide extensive documentation about our company and our owner. After completing the application process, a person from the state office visited us to verify that we are run by a minority. It was about a 6-10 month process.

Torri Schaffer, Torri's Legal Services

Schaffer has pointed out that minority status makes her firm eligible for government contracts she would not be able to receive othewise, and notes that this has been an opportunity to expand her business and market to new clients.

Additional Programs

There are additional programs that offer minority status to woman-owned companies, veteran-owned companies, and other minority contractors. For more information, visit your state's website.</p.