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Targeted Group/Economically Disadvantaged
(TG/ED) Small Business Program

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Targeted Group/Economically Disadvantaged (TG/ED) Small Business Program

The Materials Management Division (MMD) operates a program for Targeted Group and Economically Disadvantaged small businesses. The program has been in effect since July 1, 1990.

Businesses eligible to participate in this program must first of all be Minnesota-based small businesses. MMD sets variable size standards by industry in order to determine what is a small business. In setting the size standards, nationally published data on businesses in each industry is analyzed to determine the size of businesses that dominate that particular market. Using this approach, MMD has set a size limit that for some industries is $1 million in annual gross revenues or sales, for other industries the limit may be as high as $20 million or more in annual gross revenues or sales.

The commissioner of Administration periodically designates businesses that are majority-owned and operated by women, persons with a substantial physical disability, or specific minorities as targeted group businesses within purchasing categories as determined by the commissioner.

Targeted Group small businesses must be certified as such by MMD in order to participate in the program. By being certified with the MMD, the business may also be eligible to participate in similar state-funded programs operated by the Minnesota Department of Transportation (Mn/DOT) and several Metropolitan Agencies.

To be certified as a Targeted Group small business, the business must be at least 51% owned by a woman, racial minority, or person with a substantial physical disability. In addition, the business must be operated and controlled on a day-to-day as well as long-term basis by the qualifying owner. In other words, ownership is not enough; operational control is also required.

Once certified, Targeted Group small businesses may be eligible for up to 6% preference in selling their products or services or bidding on construction projects to the state in accordance with the Commissioner's designation of eligible businesses. In addition, we have the authority to set goals which require prime contractors to subcontract a portion of the work to certified Targeted Group businesses on contracts for construction or consulting services.

To be certified as an Economically Disadvantaged small business, the business must be located (or the owner must reside) in an Economically Disadvantaged Area in Minnesota. These areas include labor surplus areas, as designated by the federal government, and low income counties in Minnesota. Economically Disadvantaged small businesses must be certified as such by MMD in order to participate in the program.

Certified Economically Disadvantaged small businesses may be eligible for up to 6% preference in selling their products or services to the state, and may be eligible for up to 4% preference on construction projects.

Once certified, TG and ED vendors are added to the state's vendor list, and are listed in the Directory of Certified TG/ED Vendors.

Additional eligibility criteria for the above programs are contained in Minnesota Rules, Chapter 1230. You may obtain a copy by calling the MMD HelpLine at 651.296.2600.

An application form is available for download here. Additional information about the program and state purchasing can be obtained by contacting our HelpLine at or 651.296.2600.

December 2007


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Information found on this website can be made available in alternative formats, such as large print, Braille, or on tape, by calling 651.296.2600. Persons with a hearing or speech disability can contact us through the Minnesota Relay Service by dialing 711 or 1.800.627.3529.
The State of Minnesota is an Equal Opportunity Employer.

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