OSMBA/DOT Memorandum of Understanding
If you're planning to apply for DBE Certification with the SCDOT, please apply with SCDOT first; OSMBA has an Memorandum of Understanding in which if you’re certified with SCDOT, you will be grandfathered in with OSMBA , as long as you’re an South Carolina based business and your Personal Net worth is under $750,000. Please click here for the DBE application:
If you are already familiar with the policies and procedures to become certified, please go directly to the applications.
Certification as a Minority Business Enterprise (MBE)
- A business seeking certification is required to be in business for a year. The business start date should be indicated on its Business License or its registration with the Secretary of State.
- A South Carolina business seeking certification as a Minority Business Enterprise must submit to OSMBA an application and any supporting documentation as may be required. It is the responsibility of an applicant business and its owner(s) to provide information to OSMBA about its economic situation when it seeks certification.
- OSMBA will conduct an interview of the owner(s) at their place of business and a site visit of the business as part of the certification approval process.
- The Certification Board within OSMBA will determine if the business is controlled and operated by socially and economically disadvantaged individuals. Upon recommendation of the Certification Board, OSMBA will certify the business as a socially and economically disadvantaged small business and issue a Certification as authorized by Section 11-35-5270 of the Procurement Code.
The certification board, as defined below, is responsible for reviewing files and applications in order to determine whether a business should be recommended for approval or disapproval by the Director of the OSMBA (hereinafter referred to as the Director) as a certified business in compliance with Article 21 of the South Carolina Consolidated Procurement Code.
Applications for certification must be addressed to the Director. Upon receipt, OSMBA shall conduct an investigation of the applicant and provide the results to the Certification Board. Failure to furnish requested information will be grounds for denial or revocation of certification.
Eligibility requirements for certification as a Minority Business Enterprise (MBE) are per 19-445-2160 of the South Carolina Procurement Code Regulations and Title 49, Part 26, of the Code of Federal Regulations (CFR). In order for a firm to be certified, it must be found to be a small independent business owned and controlled by a person or persons who are socially and economically disadvantaged. The following factors will be considered in determining whether the applicant is eligible for certification:
1. Small Business
The applicant firm must be an existing “for profit” business. It must also meet the federal definition of a small business based on its primary SIC/NAICS code, as described by the US Small Business Administration (SBA), and must not exceed the small business size standard established for it’s particular line of work.
2. Independent Business
3. Ownership and Control
- Recognition of the business as a separate entity for tax or corporate purposesis not necessarily sufficient for certification under Article 21. In determining whether an applicant for certification is an independent business, OSMBA shall consider all relevant factors, including the date the business was established, the adequacy of its resources, and relationships with other businesses.
- A joint venture is eligible if one of the certified business partners of the joint venture meets the standards of a socially and economically disadvantaged small business and this partner's share in the ownership, control and management responsibilities, risks and profits of the joint venture is at least 51 percent, and this partner is also responsible for a clearly defined portion ofthe work to be performed
- The business must be 51 percent owned by socially and economically disadvantaged persons. The OSMBA will examine closely any recent transfers of ownership interests to insure that such transfers are not to be made for the sole purpose of obtaining certification.
- Ownership shall be real, substantial and continuing and shall go beyond the pro forma structure of the firm as reflected in its ownership documents. The minority owners shall enjoy the customary incidents of ownership and shall share in the risks and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of ownership arrangements.
- The contribution of capital or expertise by the minority or women owners to acquire their interest in the business shall be real and substantial. Examples of insufficient contributions include gifts, inheritance, a promise to contribute capital, a note payable to the business or its owners who are not socially disadvantaged and economically disadvantaged, or the participation as an employee, rather than as a manager.
Disadvantaged owners must be US citizens and meet the federal definition of socially and economically disadvantaged as defined by 49 CFR 26.67. Presumptive groups include “women, Black Americans, Hispanic Americans, Native Americans (including American Indians, Eskimos, Aleuts and Native Hawaiians), and Asian Pacific Americans. Personal networth of a disadvantaged owner cannot exceed $750,000.
Definition of terms:
A “Minority Person” means a United States citizen who is economically and socially disadvantaged.
“Socially disadvantaged individuals” means those individuals who are members of the following groups: Black Americans; Hispanic Americans; Native Americans (including individuals recognized as American Indians, Eskimos, Aleuts and Native Hawaiians), Asian Pacific Americans and Women.
“A socially and economically disadvantaged small business” means any small business concern which:
(a) At a minimum is fifty-one (51) percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged and who also exercise control over the business.
(b) In the case of a corporation, at a minimum, fifty-one (51) percent of all classes of voting stock of such corporation must be owned by an individual or individuals determined to be socially and economically who also exercise control over the business.
(c) In the case of a partnership, at a minimum, fifty-one (51) percent of the partnership interest must be owned by an individual or individuals determined to be socially and economically disadvantaged who also exercise control over the business.
“Small Business” means a concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on government contracts, and qualified as a small business under the criteria and size standards in 13 C.F.R. Section 121 (1989).
Minority Business Enterprise is a business which has been certified as a socially and economically disadvantaged small business.
OSMBA reserves the right to cancel a certification at any time if a business becomes ineligible after certification. OSMBA will take action to ensure that only firms meeting the eligibility requirements stated herein qualify for certification. OSMBA will also review the eligibility of businesses with existing certifications to ensure that they remain eligible. A business organization's, ownership or control can change over time resulting in a once eligible business becoming ineligible. Certified businesses must notify OSMBA, in writing within 30 days, of changes in organization, ownership or control. When OSMBA determines that an existing business may no longer be eligible, it will file a Complaint with the Certification Board, and send a copy of the Complaint by certified mail to the business. Upon receipt of such a complaint, the Certification Board shall conduct a hearing in accordance with the procedures set forth in the Administrative Procedures Act (Section 1-23-310, et seq., Code of Laws of South Carolina, 1976, as amended).
OSMBA may revoke the certification of any firm which has been found to have engaged in any of the following:
- fraud or deceit in obtaining the certification;
- furnishing of substantially inaccurate or incomplete information concerning ownership or financial status;
- failure to report changes which affect the requirements for certification;
- gross negligence, incompetence, financial irresponsibility, or misconduct in the practice of his/her business; or
- willful violation of any provision of Article 21.
Certifications expire 5 years after issuance. MBE’s must re-submit evidence of qualification for certification.