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SBA’s 8(a) Certification Program Explained

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SBA’s 8(a) Certification Program Explained

By kmurray, Contributor and Moderator
Published: March 26, 2014

Did you know that the SBA has a program designed to help small, disadvantaged businesses compete in the federal marketplace? If you’re interested in government contracting, the 8(a) Business Development (BD) Program offers a broad scope of assistance to small businesses for which you might be eligible.  

The 8(a) BD Program has been essential for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Ultimately, the program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.

Am I eligible?

Generally, to be approved into the 8(a) BD program and become certified, your small business must be owned and controlled at least 51% by socially and economically disadvantaged individuals who are American citizens.

You should also be able to demonstrate potential for business success and possess good character. You can read more details about eligibility requirements by visiting this page on our site.

What are the benefits?

So, how can the program help you? Once certified, you can take advantage of specialized business training, counseling, marketing assistance and high-level executive development provided by the SBA and our resource partners. You may also be eligible for assistance in obtaining access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance for being involved in the program. You can receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

8(a) businesses can also receive sole-source contracts (up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing). While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages you to participate in competitive acquisitions.

In addition, 8(a) businesses can form joint ventures and teams to bid on contracts. This enhances your ability to successfully compete for and perform larger prime contracts. You can also participate in the 8(a) BD Mentor-Protégé Program which allows companies to learn the ropes from other more experienced businesses.

What else should I know?

Participation in the 8(a) BD Program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage; the overall goal of which is to graduate 8(a) businesses that will go on to thrive in a competitive business environment.

While participating in the program, you’ll have to maintain a balance between your commercial and government business. There’s also a $100 million (or five times the value of your primary NAICS code) limit on the total dollar value of sole-source contracts that you can receive while in the program.

To make sure you stay on track to accomplish goals and follow requirements, the SBA district offices monitor and measure the progress of participants through annual reviews, business planning and systematic evaluations.

 

Related Resources

About the Author:

Katie Murray

Contributor and Moderator

I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Our ongoing goal is to improve this site to meet your needs, so we're happy to receive your feedback and participation. Thanks for joining our online Community here at SBA.gov!

Comments:

I see a tremendous disparity between the ANC and tribally owned 8As and the normal 8A that graduates in 9 years. For example last year there were 4000 or so contracts awarded to 8As. Of the 4000, 400 (10%)went to two companies, both ANC's. The top eight companies had 50 contracts or more. Most of these winners were in that Super 8A class. This is very disturbing and speaks volumes about human nature. Contract Officers like to do business with people they know and they trust. Since the super 8A does not graduate and has no limit on the size of the award, it make sense that they would have ample time to develop long term meaningful relationships. It is extremely damaging to the psyche of the normal 8As, because the opportunities which can be set-aside for the 8A are being absorbed by the super 8A class that is no longer a small disadvantaged business. It is almost impossible to compete with them with this degree of power differential and it is at a minimum disingenuous to declare them on equal footing. I am not an 8A, but many of my clients are and they are trying to sustain their businesses. I have many more thoughts on this disparity and have run this idea up the flag pole to the highest level, to no avail. What can the regular 8A do when the SDB is faced with such a competitive disadvantage? There are many 8As who have no government contracts at all. Unless this problem is addressed with well considered public policy changes I can see no resolution here. There are work-arounds to this policy, but perilous mistakes and errors in judgment can lose business for no better reason than the avarice of the few over the miniscule business of the many.
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If used correctly, the 8(a) certification program can boost revenues for small businesses. However, applicants must be aware of the costly mistakes made during the application process. These include: making sure that you have total control of the business in all aspects; watching out for customers that provide more than 60% of your revenues; having a deep understanding of what to write in social or economic narratives. As 8a certification lawyers and consultants, we commonly see fatal errors when applicants fail to understand how the SBA actually evaluates their certification applications. You should take the time to research each and every aspect of the 8a certification requirements AND what the SBA actually looks for when you submit your package.
SBA’s 8(a) Certification Program truly an exceptional way to channelize disadvantaged section of business, who couldn't do well even with given available resources. As this specialized training will work as an eye opening experiences through various ways, which will act positively in the long run of business.

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