By Susan Au Allen, USPAACC National President & CEO
Every year, large corporations and government agencies buy products and services worth billions of dollars from a wide range of industries in a special marketplace—from certified minority business enterprises or MBEs. Under the minority business development program, buyers from the private and public sectors aspire to reach and maintain a certain level of MBE spend.
This is part of a broader supplier diversity program intended to diversify the supplier base of a purchasing organization. The program gained traction in 1969 with President Richard Nixon’s Executive Order 11458, which created the Office of Minority Business Enterprise (known today as the Minority Business Development Agency or MBDA).
The federal agency, under the U.S. Department of Commerce, established a national program to grow and strengthen minority business enterprises. As this initiative evolved, it included an MBE certification primarily designed to help level the playing field and mitigate racial barriers faced by businesses truly owned, controlled and operated on a day-to-day basis by minorities—a direct result of the civil rights movement. In the beginning, MBE meant Black-owned businesses. As the country’s demographics shifted and Hispanics became the largest minority group and Pan Asian Americans became the fastest-growing group, minority business development expanded its focus to include them as well.
The certification program has helped certified MBEs to get “a foot in the door” of mainstream procurement and contracting, and establish early traction through supplier diversity initiatives launched by large corporations and government agencies to help minority-owned businesses grow and achieve scale. For corporations and government agencies, contracting with MBE certified suppliers marks a change in direction—a strategic business imperative that encourages inclusion, equality and fairness, as well as a reflection of the diversity in the communities they serve.
Today, MBE certification continues to provide minority-owned enterprises with earmarked opportunities, albeit not without challenges. At the top of these challenges is the lack of a standardized process and evaluation criteria among the certifying organizations. To date, MBE certification can be obtained through a number of minority and diverse organizations, as well as federal and state agencies. Lately, more corporations have also joined the fray and have started their own certification process.
Evidently, amid all the MBE-certifying organizations, there is no single authority that oversees the process to ensure that all of them strictly adhere to an approved and universally-accepted standard.
The lack of a standardized certification process is borne by the need for submitting varying documents—from business and personal tax returns and financial statements, to articles of incorporation, corporate bylaws, board meeting minutes, shareholders ledgers, lease agreements, etc. —and application fees. These varying processes and requirements can be complicated, cumbersome, time-consuming and cost-prohibitive for MBEs.
The US Pan Asian American Chamber of Commerce Education Foundation (USPAACC), founded in 1984, is the first organization to serve the disparate Pan Asian American groups of over 18 ethnicities with six major subgroups—Chinese, Asian Indian, Filipino, Vietnamese, Korean and Japanese. Since 1989, USPAACC has been certifying bonafide Pan Asian American businesses and other minority businesses to provide a gateway to procurement and contracting opportunities in the private and public sectors.
What sets USPAACC certification apart is:
1)The rigorous certification process is centralized with one standard; and
2) USPAACC certifies businesses that are owned by U.S. citizens as well as Legal Permanent Residents (LPRs or “green card” holders). As LPRs pay taxes and serve in the U.S. military, they should be able to apply and be eligible for certification as long as their business meets the 3-prong test of at least 51% owned, controlled and operated on a day-to-day basis by a U.S. citizen and/or LPRs.
Moreover, USPAACC speaks the various languages and has substantial knowledge and understanding of the cultural proclivities of many of the Pan Asian American business owners who need special guidance in navigating the certification process.
Currently, USPAACC is working on reciprocity agreements between various certifying organizations to help lessen the burden on MBE applicants and to ease restrictions on the choices available to them.
Business owners who wish to obtain MBE-certified status can apply through USPAACC’s regional chapters in California, Georgia, Illinois, New York/New Jersey, Texas and DC-Maryland- Virginia-Capital Region, or directly at USPAACC National (uspaacc.com).
After a multi-step and meticulous review process, a site visit, and once the application is accepted and the business is certified by USPAACC as a true minority-owned enterprise, it will be listed in USPAACC’s STAR Platform which stores all USPAACC certified MBEs. Corporate entities and government agencies searching for goods and services across industries, and those that want to connect with MBE suppliers, will be able to call on USPAACC to identify qualified MBE-certified suppliers for them.
USPAACC also provides year-round resources such as consulting services, early notifications on contract opportunities and invitations to bid, business workshops and seminars, technology and financial training programs, invaluable introductions to Fortune 1000 corporations, vital networking opportunities with corporate purchasing executives, directors and managers, one-on-one business matchmaking meetings and more.
Indeed, an MBE certification is only the first step to opening doors to lucrative business opportunities. It puts minority businesses on the radar of key decision-makers. It helps enterprises become part of the value chain to get a piece of the multi-billion-dollar procurement pie.
Most important, attaining an MBE certification not only signifies a steadfast commitment on the part of both buyers and suppliers to diversity, inclusion and equity in the marketplace—it is also a strong validation that MBEs are an indispensable part of our country’s engine for economic growth and resurgence.
Read more about Minority Business Certification and Supplier Diversity Opportunities here.
