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SWaM Certification - December 2012

December 18, 2012

In 2006, Governor Kaine issued Executive Order 33 by which a 40% goal for the award of contracts for the procurement of goods and services by any agency of the Commonwealth was established. By Executive Order 33, the Virginia Department of Minority Business Enterprise (“DMBE”) was given the responsibility for the certification of business enterprises as Small, Women Owned and Minority Owned business.  Hence, the term “SWaM” was created.   Since most public contracts for construction services at both the state and local now have SWaM or DBE requirements, it is important that contractors, who are eligible for SWaM certification and who perform public construction work, consider applying for SWaM for certification in order to remain eligible and competitive for the award of contracts or subcontracts requiring SWaM participation. 

One misconception about the eligibility for requirements for SWaM certification is that only minority businesses are eligible for certification.  On the contrary, the acronym “SWaM” refers to three types of business enterprises which may be classified and certified as a SWaM., namely (1) Small businesses, (2) Women owned businesses, or (3) minority owned businesses. The eligibility requirements for each of the three types of SWaM enterprises may be summarized as follows:

1. Eligible Businesses

a. 51% owned by one or more individuals who are U.S. citiens or resident aliens.

b. one or more individual owners control management and daily business operations.

c. independent from control by any other business.oror having gross receipts of $10,000,000 or less averaged over the past three years can be certified as a small business under the SWaM program.

2. Eligible Women-Owned Businesses

a. 51% ownership by one or more women who are U.S. citizens or resident aliens.

b. one or more women owners control management and daily operations.

3. Eligible Minority-Owned Businesses

a. 51% owned by one or more minority individuals who are U.S. citizens or resident aliens.

b. one or more of minority owners control management and daily business operations.

c. minority owner(s) regarded as such by the community of which person(s) claim to be a part. (Generally the same as those groups definied as socially and economically for qualification as a Disadvantaged Business Enterprise or "DBE.")

Regardless of whether the business is applying for certification as a Small, Women Owned or Minority Owned business it is essential that the individual owners of the business have the power and authority to control the management of the business and conduct its day-by-day operations independently and free from any restrictions or control by any other individuals or businesses. T he DMBE’s regulations list various factors which DMBE will consider to determine if the SWaM has “control”. In general it must be shown that SWaM owner or owners have the power to direct management and policies of business and to make day-to-day decisions concerning the operation of business independently and free from control by any other non-owner individual or business and the individual  owner or owners must have the experience and expertise to run the particular type of business which it is engaged in.

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