Establishing a successful small business in today’s economy can be a challenge. The District of Columbia offers a program that can be a boon to any small business wishing to secure work with District agencies: the Certified Business Enterprise (“CBE”) program. The CBE program’s history dates back to the mid-1970’s and is now monitored by the District of Columbia Department of Small and Local Business Development (“DSLBD”). Businesses which qualify as CBEs are awarded “preference points” that boost their chances of being awarded District-based contracts.

ELIGIBILITY AS A CBE. To be eligible for CBE certification, a business must demonstrate that it is a bona fide District-based business or a “local business enterprise.” This means the business must maintain its principal office in the District and its Chief Executive Officer and highest level managerial employees must work from that office and perform their managerial functions in that office. In addition, the applicant business must meet one of four other standards: more than 50% of its assets must be present in the District; more than 50% of its total sales or revenues must derive from transactions taking place in the District; more than 50% of its employees must be District residents or more than 50% of the owners must be District residents. There are eight categories of CBE-designated businesses, each of which provides the qualifying business with a certain number of preference points when bidding on District contracts (note that a CBE cannot be awarded more than 12 preference points when bidding on any contract). The eight different categories (with the number of preference points awarded for each) are:

WEISS LLP HAS CBE/DSLBD EXPERIENCE. While other firms may represent companies generally, at Weiss LLP, we have many years of experience representing government contractors in general and offer assistance to companies seeking to both secure and retain theirCBE classifications. In one recent case, DSLBD revoked the company’s certification as a CBE; we appealed the decision and convinced the Administrative Law Judge to grant a “stay” of the revocation, allowing the company to keep its contract and reapply for its certification. Keeping the contract was the lifeline of the company’s existence.

NEW LAW – NEW RESTRICTIONS – A NEW MINEFIELD. The Small and Certified Business Enterprise Development and Assistance Amendment Act of 2014, L20-0108, went into effect on October 1, 2014 (“2014 Act”). The 2014 Act significantly amended the previous requirements (“Old Law”) by making significant changes to certification criteria and compliance therewith. The following are a summary of the most important changes made by the 2014 Act, as amended, effective March 11, 2015:

• Authorizes the District of Columbia Office of Administrative Hearings to hear appeals by CBEs concerning the denial of an application for CBE certification, the revocation of or change to a previously-issued CBE certification or the commencement of an enforcement action against a CBE-certified business. This was the forum discussed above where the “stay” was awarded to our client.
• Requires a company’s chief executive officer and highest level managerial employees to perform their managerial functions in their principal office located in the District (the Old Law permitted these functions to be performed anywhere in the District).
• Requires more than 50% of the company’s gross receipts to be derived from transactions occurring in the District.
• Creates the new VBE and LMBE designations mentioned in above.
• Extends the CBE certification period from 2 to 3 years for new certifications.
• Allows DSLBD to impose penalties on businesses that violate the applicable laws.

PROBLEMS? CALL WEISS LLP! Careful adherence to the 2014 Act is essential to secure or keep a company’s CBE certification. Feel free to call Weiss LLP at 202-296-2121 for any questions, comments or problems you may have.