Cracking the Code: Understanding the Denial and Appeal Process for WMBE Certification in NY

Denial of WMBE certification in New York (more commonly known as MWBE certification) is not the end of the story. If you have received a denial, you can appeal the denial and potentially win approval. However, you must have a decent grasp of the ins and outs of the appeal process to be successful. This blog will cover common reasons for denials, information about the steps in the appeal process, and insight to help you navigate the often complex appeals process.

Deciding Whether to Make a Written Appeal or Request a Virtual Hearing - Attorney Assistance Is Key

You have two options for appealing a MWBE certification denial: a virtual hearing or a written appeal.

The main benefit of choosing a written appeal is that decisions are usually rendered much more quickly than those that result from virtual hearings. After all, virtual hearings require more time and resources than written appeals, typically resulting in constant backlogs.

The caveat is that it can be difficult to present your argument convincingly using just the written word. And if additional context is needed from you, a written appeal removes the possibility for the presiding judge to quickly and easily obtain additional information they can use to make their decision.

On the other hand, a virtual hearing allows you to present powerful oral arguments and witness testimony to support your appeal. It also allows you to put a face on your company, connecting with the judge as a person and not just a sheet of paper. Again, however, you risk significant delays while waiting for approval due to the additional resources needed and the backlog of applicants who have also taken advantage of virtual hearings.

In light of likely delays, you might be tempted to make written appeals until you’ve been approved. However, it’s important to know that companies must wait two years to reapply for MWBE certification after receiving a denial. So while deciding which route to take, you should weigh this restriction against the benefits of a virtual hearing, all while considering the backlog you’d likely face. A seasoned business attorney is your greatest asset in helping you choose which path will be most strategic, and ultimately, most beneficial in presenting your case.  

Usual MWBE Appeal Process

For businesses that have sought and been denied WMBE certification, an appeals process is in place that may lead to the denial being overturned. During the process, businesses that had their certification denied can address the issues preventing them from being certified. This ability to rectify deficiencies keeps women and minority-owned businesses in play for valuable contract and business opportunities.

Step 1: Gather Necessary Documentation

Generally, the appeals process only deals with documents submitted during the initial certification application, such as:

• Personal net worth affidavits, signed and notarized
• Initial capital contribution documentation
• Resumes
• Bank letters
• Recent business tax returns
• Business licenses and permits
• Proof of citizenship and alien status
• Business lease agreements
• Business contracts
• Proof of minority status

Other documents that may be required include a business certificate for sole proprietors and a certificate of authority from the NYS secretary of state.

Step 2: Submit an Appeal Letter

The first step in the appeals process is requesting an appeal of a denial from the Division of Minority and Women's Business Development. This request itself is not an appeal but a request for reconsideration. The request must be sent within 30 days of receipt of the denial and may be sent by post or online.

This form can be used to start the process. Remember to keep a professional tone and avoid emotional pleadings and arguments.

Step 3: Review by Certification Agency

An administrative law judge (ALJ) appointed by the director of the Division of Minority and Women's Business Development will oversee the review.

After reviewing all documents and evidence, the ALJ will send the division’s director a recommended order. The director may follow or reject this order in making their final decision, which should be rendered within 120 days but may take longer. Appellants would do well to remain patient and politely follow up with the agency after 120 have passed.

Step 4: Attend the Appeal Hearing (If Necessary)

At the appeal hearing, an appellant will have the opportunity to present their evidence and documents to help the ALJ come to a proper decision. Appellants should contract an experienced business lawyer for representation before the hearing. The lawyer will help them arrive with a strong and well-organized case.

Appellants are also advised to appear well-dressed and on time to make an appropriate impression. Additionally, practicing the presentation beforehand will also prove helpful for confidence.

Step 5: Receive Final Decision

Appellants will receive a decision sometime after the hearing, which comes as a written final order that rejects, accepts, or modifies the order issued by the ALJ. In some cases, the director will request more information before making a decision.

Upon receipt of a final order, appellants are advised to pursue compliance with any requirements necessary for approved businesses. In the event of a denial, appellants may want to explore alternative routes to accomplishing their objectives.

Step-by-Step Guide to Appealing via Video Conference

Step 1: Request a Video Appeal

Applicants are allowed a video appeal but must request this option. When they do, applicants must have updated contact information for when the Appeals Unit contacts them to schedule a hearing. Since the hearing is virtual and conducted by way of videoconferencing, the applicant must have fast, reliable internet and a computer with audio and video functionality capable of running Zoom or Webex video conferencing software.

Step 2: Prepare for the Video Appeal

Success at the video appeal requires having all necessary documents ready, including:

• Personal net worth affidavits
• Initial capital contribution documentation
• Resumes
• Bank letters
• Recent business tax returns
• Business licenses and permits
• Proof of citizenship and alien status
• Business lease agreements
• Business contracts
• Proof of minority status

Witness testimony may also be helpful. But keep in mind you are limited to documents presented during the initial certification process. Applicants must be prepared beforehand and should ensure their audio/video equipment is up to par.

Step 3: Conduct the Video Appeal

At the video conference, an appointed ALJ will preside, and the appellant and counsel for the division will present evidence supporting their positions. Counsel for the division will defend its denial while the appellant seeks to overturn it. Once the hearing has terminated, the ALJ will give its recommendation to the director. Applicants must adhere to their appointment times or request an adjournment for good cause at least seven days before the scheduled hearing.

Step 4: Await the Video Appeal Decision

After a complete review of the evidence, the ALJ will communicate its recommendation to the director of the division, who will either affirm or reverse the ALJ's decision. While awaiting this decision, which should come within 120 days of the hearing, applicants are advised to remain in open contact with the ALJ and other relevant parties in order to submit further information if required and to receive their decision in a timely manner.

Appealing After the Deadline with Attorney's Assistance

Sometimes, minority and women-owned businesses cannot make the appeals deadline. Fortunately, appeals after the 60-day deadline are permissible but only under certain specific circumstances. An experienced minority and women-owned business enterprise attorney should be contacted as soon as possible for this process.

Step 1: Consult with an Attorney

Perhaps the most important step in seeking an appeal after the deadline in New York State is consulting with an experienced business enterprise attorney. An attorney will work diligently to provide the division with the proof it needs to extend the deadline for the appeal. Applicants should know that the earlier they hire an MWBE certification attorney, the better. Early on, the attorney can make plans that help the applicant avoid common pitfalls.

Step 2: Assess the Validity of the Late Appeal

In order to consider a late appeal, there must be good cause. To determine whether good cause exists, attorneys perform a thorough investigation and analysis of the circumstances surrounding the late appeal, primarily seeking good cause for the late application. The strength of the evidence supporting a claim of good cause is a factor, as are the repercussions to the applicant's business due to the denial. An attorney can help make a case for extension.

Step 3: Prepare a Late Appeal Request

Applicants have 60 days after the date of their denial to file a request for an extension with the commissioner. The petition must include the reason for the delay, which must demonstrate good cause. Petitions should contain clear, concise explanations and all requested information. Incomplete or unclear petitions lead to delays and denials. Business attorneys ensure their clients avoid these and other pitfalls by crafting persuasive arguments for approvals and ensuring legal compliance.

Step 4: Submit the Late Appeal Request

The petition should also list the documents to be used during the applicant's appeal and should be ready for your attorney on the exact date requested to avoid further delays. Remember, when relying on an attorney for guidance, small business owners get assurance and results.

The contact information of the authority receiving the appeal petition is:

Step 5: Follow Up on the Status of the Appeal

Requests for late appeals must be submitted at least seven days before the 60-day deadline to the MWBE Appeals Unit. Requests may also be delivered in person. Completeness and accuracy are essential when submitting an appeal. All documents and information must be present when submission occurs to avoid rejection or delays. Here, an attorney's services make a difference in your results.

Denial of MWBE Certification

Denial of MWBE certification means no access to many valuable business opportunities throughout the state. Businesses that have been denied may experience significant financial repercussions after a denial, especially when counting on achieving the certification. Fortunately, denial is not always the end of the story.

Common Reasons for Denial

Understanding the common reasons for MBWE denials will help applicants to the certification program address any issues they may have, which will help them avoid denial in the first place. The following table will help as a quick reference for groups needing to adjust aspects of their businesses to qualify for MWBE certification.

Promptly addressing these common issues is the way to ensure that they do not result in a delay or denial. There is no substitute for proper and thorough preparation.

Notification of Denial

Notification of denial will come in written form through certified mail from the division within 120 days of the application. Denied applicants should carefully review the reasons for the denial in order to be successful in an appeal or a reapplication. Things to look for include inadequate documentation of minority status and personal net worth issues.

It may look like this:

Dear Applicant:

Your MWBE Certification application has been denied because:

• An owner has too high a personal net worth;
• An owner has not provided documentation of minority status.

Upon a denial, it advised that you contact an attorney.

Reconsideration Process

The reconsideration process offers businesses a second chance to become certified businesses by allowing them to remedy any deficiencies cited in their denials. The following information will help you understand the process step-by-step, including the preparation, submission, and agency review of your reconsideration request.

1. Preparing a Reconsideration Request

Applicants are encouraged to spend significant time preparing their reconsideration requests. Applicants should gather all relevant documents and paperwork that evidences their eligibility for MWBE certification, including pertinent financial, legal, and identification documents. While preparing the reconsideration request, applicants should carefully analyze and seek to address the reasons for not receiving MWBE certification or face denial. Finally, a clear and compelling narrative goes a long way in the reconsideration process. Take the time to make your words clear and persuasive.

2. Submission of Reconsideration Request

Businesses with a MWBE denial must wait at least 120 days before submitting a reconsideration request, which should include the forms gathered during the preparation process. As with the other submissions in this process, completeness and accuracy are crucial to success. Applicants should double and triple-check every aspect of their application and keep a copy of any confirmation or receipts of submission. Applicants must also be prepared for requests for additional information.

3. Review by Certification Agency

Agency review of petitions includes a thorough review of your documents in light of the MWBE eligibility requirements, such as the personal net worth restriction and ownership percentage requirements. You should receive a decision within 120 days, which may be a denial, approval, or request for further information. Remember that the process takes time, and a denial can be appealed if necessary.

Minority and Women-Owned Business Enterprise Certification Is Possible

Women and minority groups make up the heart of New York State businesses. With detailed preparation, MBWE certification can be had, although denials are not uncommon. However, businesses that have received denials should remain hopeful. Appeals commonly result in reversals of denials. When they do not, applicants may reapply for reconsideration.

For more information, visit the Empire State Development website. You can also schedule a consultation with an experienced business attorney, such as Lawyer For Business, for comprehensive guidance and representation. Contact us today.