The History of Small Business Certifications
When talking about certifications for small businesses, a question we often hear is where did these certifications come from?
How long have they been around?
Who created them?
So over the years, we’ve put together a timeline of important executive orders presidents have signed, along with the creation of various councils and organizations, that have impacted the existence of certifications.
Answering the Why
But before we dive into that, the more important question is ask is the why. Why is it so important that government entities purchase from small businesses?
The short answer is, when a small business gets a government contract, the small business can often create jobs and spur economic growth quickly. For local government entities, such as school districts and cities, that money is more likely to be spent in that same area.
The government agency usually has a direct line to the owner or high-level management that can quickly make decisions. They can also provide above-and-beyond customer service, making the why that much more important.
The Why in Action
During a site renewal, a single-person IT business told us about a recent situation with a government agency. The agency was moving into a new building. While they were her client, the move itself was not part of the scope of work in her contract. The day before the movers were scheduled, someone realized they did not have enough surge protectors for each computer. At the time, all computers were desktops, and power surges could cause considerable damage.
The IT and purchasing departments were arguing about who didn’t place the order. They couldn’t stop the movers from coming, and they didn’t want to turn on computers and servers in a new building without surge protectors because it would mean no computers for Monday morning. The large company they would have purchased surge protectors from could not get the surge protectors to them in time.
Finally, someone called the owner of the IT business. She listened to the issue and said she would see what she could do for them. She called every retail establishment that carried the brand of surge protector that was needed across the city—and even in nearby small towns. She asked that they put all they would sell her on hold and then got in her car and went and picked up and purchased everything on her credit card. She delivered them to the new building and helped get them all plugged in and ready.
She didn’t have to do this, but because she did she made an incredibly positive impression of her small business. Yours has the potential to do the same.
The History of Certifications for Small Businesses
Certifications aren’t anything new. In fact, they’ve been around for more than 70 years. Here is a quick timeline of actions that have impacted this:
1962 – President Kennedy signed Executive Order 11007 prescribing regulations to form and use advisory committees separate from the federal government. They started organizations looking into how the federal government was spending its money. Learn more.
1963 – Executive Order 11126 issued by President Kennedy established a committee and council relating to the status of women.
1965 – President Lyndon B. Johnson issued Executive Order 11246, requiring all government contractors and subcontractors to take affirmative action to expand job opportunities for minorities. This executive order established the Federal Contract Compliance (OFCC) in the Department of Labor.
1967 – EO 11246 was amended to include women.
1970 – President Nixon issued Order No. 4, authorizing flexible goals and timetables to correct the underutilization of minorities in federal contractors.
1971 – Order No. 4 was revised to include women.
1971 – President Nixon issued Executive Order 11625, directing federal agencies to develop comprehensive plans and specific program goals for a national Minority Business Enterprise (MBE) contracting program.
1974 – National Minority Purchasing Council (now the National Minority Supplier Development Council) was formed to pursue the single objective of encouraging major corporations to adopt and implement programs to increase their purchases of goods and services from minority businesses.
1977 – President Carter issued Executive Order 12007, terminating the Advisory Council for Minority Business Enterprise and the Citizen’s Advisory Council on the Status of Women
1979 – The Office of Minority Business Enterprise became the Minority Business Development Agency.
1979 – President Jimmy Carter issued Executive Order 12138, creating the National Women’s Business Enterprise Policy and requiring each agency to take affirmative action to support women’s business enterprises. The Office of Minority Business Enterprise became the Minority Business Development Agency.
1983 – President Ronald Reagan issued Executive Oder 12432, which directed each federal agency with substantial procurement or grant-making authority to develop a Minority Business Enterprise (MBE) development plan.
1997 – The Women’s Business Enterprise National Council was formed to ensure that women have a seat at the table.
Advantages of Becoming a Certified Small Business
So why do companies have to prove they are a small business or that they are minority-owned, woman-owned, or veteran-owned? A disclaimer: you do not have to be certified to do business with a government entity.
However, there are advantages to certification as many government entities have goals of using small, minority or woman-owned businesses. When working with the federal government, they have contracts that can only be awarded to certified companies.
Once the government realized that there was a need to include small businesses in their government contracting, large companies realized ways to use that to their advantage. Companies with figure heads were created that were not truly owned, managed, and controlled by the owner. By putting a system in place, the government could ensure they were working with businesses that reflected the needs of the contract.