MWBE & DBE Certification Procedures in NY
MWBE & DBE Certification
Both the Federal government and the State of New York have stressed both the importance of meaningful representation as well as the significant contribution of minority- and women-owned business enterprises (MWBEs) on the state level and disadvantaged business enterprises (DBEs) on the federal level. At both levels of government contracting, the objective is the same: to promote equality of economic opportunities by eliminating barriers to participation in government-funded projects.
Government procurement agencies have devised programs to aid MWBEs and DBEs in obtaining information and resources about certification as well as setting meaningful targets to ensure that MWBEs and DBEs receive increased access to government-funded contracting opportunities. Certifying agencies are diligent in both the initial certification process as well as monitoring participation by MWBEs and DBEs to ensure that they are performing commercially
useful functions (CUFs) on government contracts.
Benefits of MWBE Certification:
For many smaller contractors who meet the criteria, the MWBE/DBE certification process can offer numerous advantages:
- Access to contracts with the government: Federal, New York City, and New York State agencies must reserve a specific proportion of their contracts for MWBEs and DBEs;
- Increased exposure: Certified companies are listed in a directory that government organizations and prime contractors utilize to staff multi-million dollars government contracts;
- Financial support: Businesses with MWBE and DBE certification can apply for various subsidies and loans from governmental agencies;
- Network opportunities: MWBE and DBE companies get access to a range of networking and other resources designed to leverage certification and increase access to contract opportunities.
While MWBE and DBE certification programs are powerful tools to allow historically disadvantaged companies to benefit from access to government-funded contracts, there are requirements and processes that need to be navigated in order for MWBEs and DBEs to both secure certification but, more importantly, to meaningfully participate in valuable contracting opportunities.
If your company is considering MWBE or DBE certification, it is vital that you understand both the playing field and the rules of the game. Our attorneys have nearly 40 years combined experience in assisting MWBE and DBE companies in not only getting on the field, but in helping them excel once they are there. Chan Vitanza LLP are experts in helping our clients navigate the process, from beginning to end.
MWBE Certification Methodology
The certification process, itself, can seem daunting. Government entities have exhaustive requirements to ensure the credibility and sustainability of the MWBE and DBE process, particularly around certification and, at the appropriate time, re-certification. The process can be significantly time- and resource-intensive in terms of required filings and supporting documentation. Our attorneys are here to guide you through the process and can make the difference between success and failure. Most importantly, they will help focus your efforts in ways to minimize cost and maximize results. For any entity looking to secure MWBE or DBE certification, it should be prepared to pull together numerous supporting papers, including tax records, financial statements, and proof of business ownership.
Like anything else related to your business, paying close attention to detail and putting in the time will make MWBE and DBE certification both less chaotic and more worthwhile. Surrounding yourself with experts in the process will only increase your chances of success – you have one shot at this! If denied certification, you will have to wait at least three years to
reapply.
Requirements for MWBE Certification
Generally speaking, to be certified as a MWBE or DBE entity, a company must fulfill the following criteria:
- At least 51% of the company must be independently owned, run, and managed by people from underrepresented groups or women (in the DBE context, members of “disadvantaged” groups, as defined in Federal law).
- The ownership must be real, substantial, and continuing, and the minority and/or women members must exercise the authority to independently control the day-to-day business decisions.
- The minority or woman owner(s) are subject to certain personal net worth restrictions.
- These restrictions are more strict for DBE certification (Federal contracts) than MWBE certification (State contracts).
- It must be a for-profit corporation with its main office in the State of New York (for MWBE candidates).
- It needs to be a small business in good standing with the N.Y. Department of State (for MWBE candidates).
- It must be in business for at least 1 year.
- It must generate at least $1 million in gross annual revenue (for MWBE candidates).
MWBE (Minority and Women-Owned Business Enterprise) certification is a designation by New York State that allows small businesses owned by minorities or women to participate in state-funded projects. This certification provides access to set-aside contracts, networking opportunities, and business development resources.
Denials often stem from:
- Ownership & Control: Failure to demonstrate that the minority or woman owner(s) own at least 51% of the business and control its operations.
- Personal Net Worth (PNW): Exceeding the PNW limits set by state regulations.
- Documentation Gaps: Incomplete or inconsistent financial records, tax returns, or business documents.
- Operational Control: Lack of evidence that the minority or woman owner(s) make day-to-day business decisions.
If your MWBE certification is denied, you have the right to appeal:
- State-Level Appeal: Contact the New York State Department of Economic Development (DED) within 30 days of receiving the denial letter. You can submit a Request to Appeal form online or by mail. Empire State Development
- Federal-Level Appeal: Submit an appeal to the U.S. Department of Transportation’s Departmental Office of Civil Rights within 90 days of the denial.
Ensure your appeal includes a detailed narrative explaining the reasons for the denial and any supporting documentation
The appeal process generally involves:
- Reviewing the Denial: Carefully examine the denial letter and identify specific reasons for the decision.
- Gathering Evidence: Collect all relevant documents, such as tax returns, financial statements, and ownership records, to support your case.
- Submitting the Appeal: Prepare a comprehensive appeal letter addressing each point of denial and submit it to the appropriate agency.
- Awaiting Decision: The agency will review your appeal and issue a determination, which may take several months.
The timeline can vary:
- State-Level: Typically, New York State agencies aim to resolve appeals within 120 days.
- Federal-Level: The U.S. Department of Transportation strives to make a decision within 180 days upon receipt of the complete appeal file.
Delays can occur if additional information is needed or if the appeal is complex.
Yes, but there are restrictions:
- Federal Denial: If denied at the federal level, you must wait at least 12 months before reapplying.
- State Denial: New York City rules stipulate a 2-year waiting period before reapplying.
During this time, it's advisable to address any issues that led to the denial to improve your chances of future approval.
With extensive experience, Chan Vitanza, LLP specializes in guiding businesses through the MWBE certification and appeals process. Our attorneys provide:
- Expert Legal Representation: Assistance in preparing and submitting certification applications and appeals.
- Strategic Advice: Guidance on addressing deficiencies and strengthening your application.
- Comprehensive Support: From initial consultation to final determination, we support you at every step.
To apply for MWBE certification, you typically need:
- Personal and business tax returns (past 3 years)
- Resumes of owners and key personnel
- Business financial statements and bank records
- Corporate formation documents (articles of incorporation, bylaws)
- Proof of ownership and operational control
Proper documentation is crucial for a smooth application or appeal process.
A business qualifies if:
- Ownership: At least 51% is owned by one or more minority or women individuals.
- Control: Minority or women owners manage day-to-day operations and make long-term decisions.
- Economic Disadvantage: Owners meet the personal net worth limits defined by state regulations.
Chan Vitanza, LLP can help assess eligibility before applying.
Yes, certification can be revoked if:
- Ownership or control changes without notifying the certifying agency
- The business exceeds personal net worth limits
- False or misleading information is submitted during certification or recertification
- Reporting requirements or regulatory obligations are not met
Timely legal guidance from Chan Vitanza, LLP can help protect your certification and ensure compliance.
