Could Your Business be Taking Better Advantage of M/WBE Development Programs? Yes.
The coming year will bring significant opportunities to businesses across the construction industry regarding government projects, particularly to minority and woman-owned businesses ("M/WBEs"). Governments across the nation have approved budgets with significant increases in construction spending. When the government undertakes these large construction expenditures, the robust M/WBE participation programs requiring at least 10 percent M/WBE participation on government builds come into play. The federal government, and most states, also provide incentives to majority-owned contractors who hire M/WBEs. Familiarity with these programs will assist any contractor in taking full advantage of the opportunities available.
For example, to qualify as an MBE or WBE in North Carolina, a business must be certified by North Carolina's Historically Underutilized Businesses office ("HUB"). HUB certifies businesses with at least 51 percent ownership by either a woman, minority, disabled person, or other socially and economically disadvantaged individual. HUB-certified M/WBEs have access to trade and community organizations, special training programs offered by HUB, and mentor-protégé programs offered only to M/WBEs. Businesses seeking HUB certification in North Carolina can obtain the required documents and instructions on the North Carolina Department of Administration website
. Many other states employ similar certification processes. The instructions for South Carolina's program may be accessed here
. Becoming properly certified in the appropriate states opens doors to key resources and bidding opportunities.
M/WBE development programs are not only for the businesses that qualify for M/WBE status. Businesses that choose to work with M/WBEs also have important opportunities. An excellent example lies in the tax programs available to contractors who hire M/WBE subcontractors. Programs vary by state, but typically provide significant tax incentives to businesses that contract with M/WBEs. For instance, Georgia allows a tax deduction of 10 percent of the dollars paid to M/WBEs up to a $100,000 deduction each year. South Carolina allows a tax credit of 4 percent of the dollars paid to M/WBEs up to a total credit of $50,000 each year. Tax benefits also are available at the federal level and in most other states.
Federal and state M/WBE programs create ample opportunities for both W/MBE and majority-owned contractors, and every construction business should take full advantage of the programs. For more information and guidance on how your business could be taking advantage of these programs in your states, contact a Spilman attorney