Supplier Diversity Classifications

Small Business Concern

The Small Business Act states that a small business concern is "one that is independently owned and operated and which is not dominant in its field of operation." The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately. SBA's Small Business Size Regulations implement the Small Business Act's mandate to SBA. SBA has also established a table of size standards matched to North American Industry Classification System (NAICS) industries. Other methods are also used to classify small companies, such us annual sales (turnover), assets value or net profit (balance sheet), alone or in a mixed definition.

Minority Owned or Minority Business Enterprise (MBE)

A minority-owned business is a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated and controlled by minority group members. "Minority group members" are United States citizens who are Asian, Black, Hispanic and Native American. Ownership by minority individuals means the business is at least 51% owned by such individuals or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals. Further, the management and daily operations are controlled by those minority group members.

Women Owned or Women Business Enterprise

WBE (Women's Business Enterprise) is an independent business concern that is at least 51% owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; whose business formation and principal place of business are in the US or its territories; and whose management and daily operation is controlled by one or more of the women owners.

Veteran-Owned Small Business (VOSB)

A business hoping to be considered "Service-Disabled Veteran" must be at least 51% owned by an individual who can be considered by the government as a Service-Disabled Veteran. The terms "veteran" and "service-disabled veteran" are defined in 38 U.S.C 101(2) and (16). The following definitions are as stated in that code.

Veteran - The term "veteran" means a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable.

Service Disabled - with respect to disability, that such disability was incurred or aggravated in line of duty in the active military, naval, or air service. Such disability does not require a minimum rating to be considered. A veteran with a 0 to 100% disability rating is eligible to self-represent as a Service-Disabled Veteran for Federal contracting purposes.

HUBZone Small Business Concern (HUBZone)

This program is designed by the US Government to promote economic development and employment growth in geographical areas where small business is located. To be eligible for the program, a concern must meet all of the following criteria:

• it must be a small business by SBA standards
• it must be located in a "historically underutilized business zone(HUBZone),
• it must be wholly owned and controlled by person(s) who are U.S. Citizens,
• at least 35% of its employees must reside in a HUBZone.

A "HUBZone" is an area that is located in one or more of the following:

• a qualified census tract (as defined in section 42(d)(5)(C)(ii)(I) of the Internal Revenue Code);
• a qualified "non-metropolitan county" (as defined in section 143(k)(2)(B) of the Internal Revenue Code) with a median household income of less than 80 percent of the State median household income or with an unemployment rate of not less than 140 percent of the statewide average, based on US Department of Labor recent data; or
• lands within the boundaries of federally recognized Indian reservations

For more information please visit the US Small Business Administration (SBA), the National Minority Supplier Development Council (NMSDC), and the Women's Business Enterprise National Council (WBENC).