Companies worldwide continue to keep diversity of suppliers at the forefront while crafting their internal spend initiatives. However, understanding how to pinpoint suppliers that meet these requirements can be extremely challenging, as many procurement teams may not know what certifications to look for.

Certifications are awarded by numerous third-party entities worldwide and help provide clarity into which minority is represented for a particular supplier. While the types of certifications offered continue to grow, we have compiled a list of 15 certifications to be aware of for companies hoping to increase their representation in procurement spend.

Use this as a glossary to reference when building out internal initiatives or for general information.

1. Minority Business Enterprise (MBE)

First up, a minority "managed" enterprise (MBE) is one in which the minority owners operate or manage at least 51% of the firm's operations. These individuals must be either U.S. citizens or permanent residents, and must be managing a “for-profit” organization that is physically located in the U.S. or its local territories.

If the criteria listed above are met, a company may also be recognized as a minority "controlled" firm through The NMSDC Growth Initiative. The firm must adhere to these conditions:

• Minority management/owners control the day-to-day operations of the firm.
• Minority management/owners retain a majority (no less than 51%) of the firm’s “voting equity”.

This certification is a company-level ownership/diversity certification awarded by The National Minority Supplier Development Council, Inc.

2. LGBT Business Enterprise (LGBTBE)

This type of certification is awarded by NGLCC (National LGBT Chamber of Commerce), a non-profit organization based in the United States that aims to increase economic opportunity and promote the LGBT business community.

To be LGBTBE certified, a company must have at least 51% ownership, or significant control by LGBT individuals; additionally, these individuals must either be U.S. citizens or law permanent citizens. 

Following a one-year certification period, certified LGBTBE businesses are eligible for scholarships, mentoring programmes, leadership training, and other opportunities. 

3. AbilityOne

Number three on our list is the federal program AbilityOne. This initiative assists individuals who are blind or disabled find employment within a countrywide network of nonprofits that sell goods and services to the government. 

The AbilityOne Program leverages the federal government's money supply to buy goods and services from collaborating with community-based charity agencies and organizations devoted to coaching and hiring people with significant disabilities. 

These individuals can participate fully in their societies and use their AbilityOne-taught skills in other governmental and non-governmental jobs through the AbilityOne Program.

4. Asian Indian 

Asian-Indian ownership is a diversity-driven certification that may be granted by municipal, national, or government agencies; as a result of this, qualifications will vary depending on the creditor. This certification is typically not siloed to a specific industry. 

This certification necessitates that the company is owned or managed (at least 51%)  by one or more members of the Asian-Indian community. Additional checks could arise based on the scale of the company.

5. Asian-Pacific American

Asian-Pacific American ownership is another company-level diversity certification that may be granted by the USPAACC. This certification recognizes an enterprise that is at least 51% operated, managed, and controlled by Asian-Pacific Americans. 

This certification is not industry specific, and additional requisites may apply depending on the size of the company. 

6. Black American 

Black American ownership is a certification of company diversity, and resembles other ethnic-based certifications. This certification can be granted by municipal, national, or government agencies, so specific qualifications will vary depending on the creditor.

It requires that the company is owned, controlled, operated, or managed (at least 51%) by one or more members of the black American community. Black American ownership certification is non-industry specific. 

7. Disadvantaged Business Enterprise (DBE)

The Disadvantaged Business Enterprise initiative is a program of the Department of Transportation intended to provide support to small businesses that are owned and operated by socially and economically disadvantaged individuals. Businesses that qualify include: 

• Business must be 51% owned by a socially and economically disadvantaged individual(s)

• “Disadvantaged”: a member of a minority group, or otherwise proves to be economically and socially disadvantaged.

• Business must be classified as a small business under SBA standards.
• Disadvantaged owners must have a controlling interest in the business, i.e. the owner must have power to direct the management and policies of the business.

Additional certification requirements are outlined on the US DOT website. The DBE program's principal purpose is to promote fairness and equality by granting small businesses possessed by socioeconomically deprived individuals a better chance to compete for government-funded mass transit deals.

8. Hispanic American

The Hispanic American certification is another diversity and non-industry specific certification. This certification can be granted by municipal, national, or government agencies, and additional specific requirements may vary based on the creditor. 

This certification necessitates that the company is owned, controlled, operated, or managed (at least 51%) by one or more members who claim ancestry from a Spanish or Portuguese speaking country.

9. Historically Underutilized Business (HUB)

The Office for Historically Underutilized Businesses (HUB) has been created to facilitate companies owned at least 51% by economically disadvantaged individuals, such as minorities, women, and differently-abled individuals, to be certified as HUB firms in each state’s supply chain system. HUB is also a diversity certification, often issued by State governments. Each state will have unique requirements pertaining to residency, location of operations, and profitability.

This program was enacted to provide opportunities to HUBs for public contracts, and gain increased exposure to entities with supplier diversity programs.

10. Native American

The Native American ownership certification is another certification of diversity. This certification is geared for businesses that operate in and around reservation spaces. Though it’s non-industry specific, this certification requires that the company is owned or managed (at least 51%) by one or more members of the Native American community. 

This certification can be granted by municipal, national, or government agencies, and additional specific requirements may vary based on the creditor. 

11. SBA 8(a)

The SBA 8(a) is an ownership and diversity license provided by the US administration's Small Business Association (SBA). The program is a business development program that offers small companies accredited with formal training, consultation, brand management, and technical support. Registered SBAs also have access to competitive, exclusive contracts, business development programs, recommendations from federal procurement experts, opportunities to create joint ventures with established companies, and more.

Organizations that qualify are owned and controlled at least 51% by socially and economically disadvantaged individuals. There are additional profitability limits and citizenship requirements necessary for companies that are best equipped to take advantage of the program. 

12. Veteran-Owned

The Veteran-Owned certification requires the company to be a small business according to size standards set by the SBA and to be at least 51% owned, operated, and controlled by a veteran. The industry or niche of business isn’t specified; however, the specifications also require that one or more veterans manage day-to-day operations and contribute to making long-term decisions.

The Federal Government has a long history of supporting veteran-owned businesses by providing sole-source contracts and tailored education programs. Since then, the number of these recognized entities have grown and have had greater exposure to supply chains across various industries.

13. Small & Disadvantaged Business

The Small and Disadvantaged certification is a company-level ownership certification that necessitates one or more underprivileged people must own and oversee 51% or more of the company. In order to qualify as “disadvantaged”, the individual(s) must be both socially and economically disadvantaged. Additionally, according to the SBA's size standards, the business must be classified as small. 

Local, state, and federal governmental bodies can issue this certification, and the certification is not industry specific. Businesses located within an underutilized business zone can also apply. 

14. Women's Business Enterprise (WBE)

WBE Certification verifies that a company is owned, managed, controlled, and operated by a woman or women of U.S. nationality at least 51% of the time. Additionally, the governing board must also be controlled by a woman or a group of women, if applicable. The requirements vary with the issuer, as WBE certification can be issued at the federal, state, or local levels; however, the certification is not industry specific. 

15. TERO

Finally, the Tribal Employment Rights Ordinance (TERO) enforces American Indian choice law, guaranteeing that American Indians get their fair share of jobs, mentoring, subcontracts, contract work, and business ventures on or adjacent to reservations. 

TERO-certified contractors must necessitate that the company is owned or managed (at least 51%) by one or more members of the American Indian community, following instructions set by the local Tribal Employment Rights Office.

If integrating diverse suppliers is a key initiative in your procurement goals, digital tools like Parq can assist with locating and securing trusted suppliers that support various projects. To learn more, reach out.