Making Certification Work

Does certification really give women- and minority-owned businesses an advantage? Yes, but not in the ways you might expect. Being certified as a Women Business Enterprise (WBE) or Minority Business Enterprise (MBE) means that the company has gone through a rigorous and stringent certification process to confirm that it is managed and controlled by a woman or minority owner or owners. However, the benefits of certification are not inherent; instead you have to actively maximize the advantages that it can provide.

Veronica Rose, president and CEO of Aurora Electric in Queens, is the first woman to hold a New York City master electrician’s license. Her company furnishes, installs and maintains electrical, data, telecommunications, wireless technology and security and other intelligent systems in both residential and commercial buildings. Aurora routinely contracts with federal, state and local government agencies as well as large corporations.

Getting certified does not necessarily open floodgates of new clients or guarantee you will win jobs. “In today’s political climate, there are few ‘set-aside’ projects,” says Rose. In the past, government agencies would set aside projects for only minority and women businesses to bid on. “But because of the number of [discrimination] court cases, agencies are afraid to use [supplier diversity] as a benchmark,” she says. According to Rose, the real value of certification is when you’re closing a deal and after the deal is done.

After nearly 10 years of experience running a certified business, Rose shares tips that have helped her maximize her certification.

Certification is a Job

As recently as six years ago, each federal, state and local government agency had its own certification requirements. Now, most federal agencies and private companies accept the Women’s Business Enterprise National Council (WBENC) certification, but the process is not completely streamlined. Each entity may have additional criteria, and preparing the necessary information to supplier diversity programs can be an arduous process. Public benefit corporations, such as the Port Authority of New York and New Jersey, the Metropolitan Transportation Authority and the Battery Park City Authority all have unique requirements for women business enterprises (WBE) or minority business enterprises (MBE). To meet these demands, Aurora Electric employs a dedicated employee who oversees the certification requirements, especially during the RFP preparation process.

Corporate Motivation

Clients are concerned about the bottom line first and foremost, followed by a hundred other items on their “to do” lists. Clients don’t necessarily pay attention to supplier diversity goals during the contracting process. “The only reason the private market has gotten into certification is because they are publicly traded companies,” says Rose. “The marketing departments have done their homework and realized that in order to sell to our demographic [women and minorities], it helps them to say, ‘We are using a woman-owned business to build that store in your neighborhood. Look, we are creating jobs in your community.’ It is self-motivated.”

Strategy

While certification may not help a business get its foot in the door, it can be invaluable at the negotiating table. “I do my very best to never bid against certified companies,” says Rose. “It is a strategic decision. When I finally get to the table, this is an asset I can bring that no one else can.”

Certification also can be a tool in contract negotiations. “The last federal job I won, I was the only certified company being considered, and I still had to be the lowest bidder,” says Rose. “But the certification helped me negotiate the terms and conditions. Instead of payment in 60 days, I negotiated for payment in 45 days. That is where the certification is worth its weight in gold. Why should they negotiate with you otherwise? There’s a guy behind you willing to put in the same bid, but he doesn’t have that certification asset.”

The Cupcake Analogy

Rose notes that many of her clients don’t realize that their leasing and financing agreements stipulate supplier diversity until mid-project. “The companies don’t know they need that certified business until they need one. That’s where I become their angel,” she says. “Not only do I bring them light, but I fulfill that WBE requirement.” As a subcontractor, this situation has helped her get repeat business. Once she helps a client meet a certification goal on one project, they are likely to subcontract to her again. “Everyone is selling cupcakes, but mine are cupcakes with icing. But the icing is inside,” says Rose.

Subcontracting With Certified Businesses

Because each certified company that is hired on a job (subcontractors included) counts toward the project supplier diversity goal, many W/MBEs are likely to partner with other certified companies. “I am a WBE, but not a MBE, but I work with four other companies that are,” says Rose. “Instead of hiring another employee for certain projects, I will subcontract to an MBE to bring a greater percentage of supplier diversity to the client.” If your company is not eligible for certification, subcontracting to a M/WBE can be an opportunity for fulfilling your clients’ supplier diversity goals.