Historically Underutilized Businesses (HUB) must be a corporation, sole proprietorship, partnership, or joint venture in which at least 51% of the business is owned, operated, and actively controlled/managed by a minority or woman. The business is an entity with its principal place of business in Texas, and has an owner residing in Texas with a proportionate interest that actively participates in the control, operations and management of the entity’s affairs.

Disadvantaged Business Enterprises (DBE) are defined as small for-profit businesses where socially and economically disadvantaged individuals own at least a 51% interest of the business and also control the management and daily business operations. To participate in the DBE program, a small business owned and controlled by socially and economically disadvantaged individuals must receive DBE certification from the relevant state.

To be regarded as economically disadvantaged, an individual must have a personal net worth that does not exceed $1.32 million. To be seen as a small business, a firm must meet SBA size criteria AND have average annual gross receipts not to exceed $22.41 million. Size limits for the airport concessions DBE program are higher.

Small Business Administration (SBA) has several programs designed to assist small and economically disadvantaged businesses compete in the marketplace. These programs include, but are not limited to the 8(a) Business Development Program and the Women-Owned Small Business Federal Contract Program. SBA defines a “small business” in terms of the number of employees over the past year, or average annual receipts over the past three years. Size standards vary by industry. The Federal government sets aside certain contract bid opportunities exclusively for small businesses. In order to compete for these contracts, small businesses owners must first register as a vendor with the government.

What individuals classify as socially and economically disadvantaged?

As defined by the State of Texas, “socially and economically disadvantaged” individuals or groups include African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.

What businesses classify as being socially and economically disadvantaged?

To be considered for this program, the owner or at least one of the owners must classify as socially and economically disadvantaged, own at least a 51% interest of the business and also control the management and daily business operations. The State of Texas classifies such businesses as:

• Woman-Owned, Female
• Hispanic-Owned, Male
• Hispanic-Owned, Female
• Black-Owned, Male
• Black-Owned, Female
• Asian-Owned, Male
• Asian-Owned, Female
• American Indian-Owned, Male
• American Indian-Owned, Female

 Why should I certify my business?

Although it is not mandatory for a small and/or minority business to be certified in order to be selected for work, it is to the benefit of a small and/or minority business owner to certify their business in these programs.

Many government agencies require that some percentage of the procurements be set aside for small and/or minority businesses. Certification in these programs helps to increase the opportunity for small and/or minority businesses to successfully compete for government contracts.

While certification alone does not guarantee the selection of a business, certification through these statewide programs will increase your businesses exposure to prime contractors, the general public, and other entities who have supplier diversity programs and are searching for small, minority, and woman-owned businesses for contracting purposes.