Small Businesses
The Department of Agriculture is a strong advocate for small businesses and has continued to award over 50 percent of all eligible contracting dollars to small businesses across the country.
The Small Business Act defines a small business as a business concern that is organized for profit; has a place of business in the U.S.; operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; is independently owned and operated; and is not dominant in its field on a national basis. The business may be a sole proprietorship, partnership, corporation, or any other legal form.
The Small Business Administration has established size standards to define small businesses based on the business’s industry classification.
Find out if your business qualifies
Small Disadvantaged Businesses
A small and disadvantaged business is a small business entity owned and controlled by a socially and economically disadvantaged individual and is at least 51 percent owned by one or more socially and economically disadvantaged individuals. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identification as members of certain groups. Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the economy has been impaired due to diminished capital and credit opportunities. Black Americans, Native Americans, Hispanic Americans, Asian-Pacific Americans, and Asian Indian Americans have been officially designated socially and economically disadvantaged. Members of other groups must provide evidence that they are economically and socially disadvantaged.
8(a) Business Program
The 8(a) program is a small, disadvantaged business development program administered by the Small Business Administration. The Program offers a broad scope of assistance to firms and is an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting. Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage. Participants of the program can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.
Woman Owned Small Business
On October 7, 2010, the U.S. Small Business Administration published a final rule effective February 4, 2011, aimed at expanding federal contracting opportunities for women-owned small businesses (WOSBs). The Women-Owned Small Business (WOSB) Federal Contract program authorizes contracting officers to set aside certain federal contracts for eligible businesses. To be eligible, a firm must be at least 51% owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens and the firm must be “small” in its primary industry in accordance with SBA’s size standards for that industry.
Historically Underutilized Business Zone (HUBZone)
The HUBZone program was enacted into law as part of the Small Business Reauthorization Act of 1997. It encourages economic development in historically underutilized business zones - "HUBZones" - through the establishment of preferences. It provides federal contracting opportunities to qualified small businesses located in these distressed areas to help empower communities, create jobs, and attract private investment.
To qualify for the program, a business (except tribally-owned concerns) must meet the following criteria:
- It must be a small business by SBA standards.
- It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, or an agricultural cooperative or an Indian tribe.
- Its principal office must be located within a "Historically Underutilized Business Zone," which includes lands considered "Indian Country" and military facilities closed by the Base Realignment and Closure Act. A principal office is the location where the greatest number of employees at any one location are performing work, with the exception of the construction and service industries.
- At least 35% of its employees must reside in a HUBZone. Reside means to live in a primary residence at a place for at least 180 days, or as a currently registered voter, and with intent to live there indefinitely
Find out if you qualify as a HUBZone
Service Disabled Veteran Owned Small Business
The Department of Agriculture (USDA) is aggressively working to increase its use of Service Disabled Veteran-Owned Small Businesses (SDVOSB) in fulfilling our contract needs and to support those men and women to whom we owe so much. The Assistant Secretary for Administration, the Director of the Office of Small and Disadvantaged Business Utilization (OSDBU), and the Chief Information Officer are actively working together to achieve USDA's SDVOSB goal. In order to increase the Department's ability to attain or exceed the mandated 3 percent goal, OSDBU continuously works with USDA agencies to locate contracting and subcontracting opportunities that can be performed by SDVOSBs.
The USDA SDVOSB Program enables USDA to fulfill all implementation strategies contained in Executive Order 13360, signed on October 20, 2004, that directed all federal agencies to more effectively implement section 15(g) of the Small business Act (P.L. 108-183). The Secretary strongly expressed his commitment to this initiative in Secretary's Memorandum 5090-001, dated July 12, 2005. The Secretary's Memorandum was codified as permanent departmental policy in Departmental Regulation (DR) 5090-005, dated September 26, 2006.
USDA is placing special emphasis on two goals:
- Attain or exceed the mandated 3 percent goal for contracts awarded to SDVOSBs for the total value of all USDA contracts, and
- Award 5 percent of the total value of all applicable information technology contracts to SDVOSBs as prescribed in the Secretary's Memorandum and permanent Departmental Regulation.
Learn more about the verification process
Small Business Subcontracting
Subcontracting can provide small businesses with opportunities to participate in USDA contracting opportunities by participating in contracts that they cannot win on their own. The Department awards billions of dollars annually to prime contractors. Requirements over the simplified acquisition threshold must agree in the contract that small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses) will have the maximum practicable opportunity to participate in the contract consistent with its efficient performance. Furthermore, large prime contractors receiving a Federal contract exceeding $650,000 ($1.5 million in the case of construction), and which offers subcontracting opportunities, must establish subcontracting plans with goals that provide maximum opportunities to these small businesses.
OSDBU staff and the Small Business Administration, Procurement Center Representative review contracts and subcontracting plans, and recommend qualified small business concerns to assist prime contractors in their subcontracting goal attainment.