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the eligible principals below 51% or cause the entity to not be indepen- dent or not controlled by eligible principals.
Under the independence requirement, the applicant cannot be dependent or affiliated with, or influenced by, legally or in practice,
any other business enterprise or organization regarding its day-to-day or long-term affairs. The applicant cannot rely on or regularly utilize employees or workforce who, while performing work for the applicant, are in the course of employment with or under the direct control of another person or business entity other than the applicant. The SDO will deem an applicant not independent if the applicant presents insuf- ficient evidence of having the capability to perform, with its own work- force, equipment, and facilities, the work it contracts to perform.
As to the ongoing requirement, the applicant must show that it was not formed for the of taking advantage of the certification program. Reorganization and/or ownership changes that subsequently render
an applicant eligible for the SDO certification that occurred within the 12 months prior to application will create a rebuttable presumption that the changes were made to take advantage of the program. In order to rebut the presumption, the applicant must show that it has avail- able resources that are appropriate for a business of its type and that
it actively seeks out contracts for services. Essentially, demonstrating ongoing business and having financial resources will demonstrate the legitimacy of the business seeking certification.
Part of the application process includes attendance at a mandatory, two-hour workshop before applying for the SDO certification. It is only after attending the workshop that an applicant may gain access to the application portal. The certification process may take up to 60 days fol- lowing the submission of an application.
In order to determine if a business may qualify before undergoing the rigor of the workshop and application process, the SDO offers a self-assessment tool for anyone unsure if their business may qualify for a SDO certification. The assessment can be found at www.mass.gov/ forms/take-the-certification-self-assessment.
SDO certification typically lasts for three years, at which point the certification will automatically expire. Companies are removed from the SDO directory after expiration unless certification is renewed in a timely manner.
If there have been no material changes regarding the business, the applicant should submit a renewal affidavit attesting to the same and comply with any requests for information from the SDO certification specialist. Changes in ownership, control, or independence are some of the circumstances identified as a material change; naturally, if there have been material changes, the applicant must notify the SDO. The applicant has within 30 days of the change to notify the SDO or risk decertification.
Opportunity Knocks
As of June 5, 1,924 Massachusetts businesses are registered as WBE, 1,442 MBE, 576 DBE, 111 VBE, 74 SDVOBE, 60 PBE, 44 LGBTBE, and 20 DOBE.
Of these registered businesses, 154 of them are nonprofits, and the major business industries include service, construction, goods, technol- ogy, transportation, and manufacturing. Although 3,050 Massachusetts businesses are certified, only 223 of those businesses are registered from Hampden County, 69 from Hampshire County, 52 from Berkshire County, and 16 from Franklin County.
There is a lot of opportunity for a registered business, and the num- bers indicate there are numerous businesses in the local footprint that would likely qualify but have not registered yet. In addition to the pub- licity around the certification, the certification also provides the busi- ness access to exclusive contracts and subcontract opportunities to help its bottom line. Clearly, well-positioned businesses and entrepre- neurs understand getting an edge on the competition may help secure their foothold in the marketplace, and being a certified diverse business in the Commonwealth may be one such way to stand out.
Becoming a certified diverse business may also result in new net- working and marketing opportunities and expanded opportunities to contract with the Commonwealth of Massachusetts. As the require- ments for certification may differ based on the location of the business and business type, it is important that you obtain legal advice for your business on its potential eligibility and to assist through the certifica- tion and/or recertification process. BW
Julie Dialessi-Lafley is a shareholder and Britaney Guzman-Bailey is an associate at Bacon Wilson, P.C.
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