SBA’s 8(a) Business Development Program is a business assistance program for small disadvantaged businesses, designed to help socially and economically disadvantaged small business owners win government contracts and gain access to the $600 billion federal marketplace. Though participation in the 8(a) program does not guarantee a business will be awarded contracts, it does help businesses in the program pursue and capture new opportunities from the government.
Applying for the 8(a) program, however, can be intimidating and time-consuming. Here are some insights to help you decide if the 8(a) program is right for you.
What are the benefits of the 8(a) program?
The primary benefit of the 8(a) program is access to sole-source and set-aside contracts. Contracts under $150,000, some of which are specifically reserved for 8(a) participants, are automatically set aside for small businesses, which significantly minimizes bid competition. As an 8(a) certified small business, you will also be eligible for certain sole-source contracts, which can be worth up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.
Participating businesses will also be assigned a Business Opportunity Specialist to help navigate the federal contracting process, gain access to procurement and compliance experts, and have the opportunity to receive free training from SBA’s 7(j) Management and Technical Assistance program.
Last, but certainly not least, 8(a) firms are eligible to participate in SBA’s Mentor-Protégé program, which offers both opportunities for mentorship from experienced and technically capable firms, and the potential to form joint ventures with established mentor businesses.
What are the eligibility requirements for 8(a)?
In order to qualify for the 8(a) program, you must be a small business according to SBA size standards, at least 51% owned and controlled by U.S. citizen(s) who are socially and economically disadvantaged, and must have never participated in the 8(a) program before. The business owner(s) must have a personal net worth of $750,000 or less, an adjusted gross income of $350,000 or less, and total assets of $6 million or less. In addition, the owner(s) must demonstrate good character and have been in business for at least 2 years in their primary NAICS.
What if my company has not been in business for 2 years?
If your company has not been in business for at least 2 years, SBA may waive the requirement if you can demonstrate that the owner has substantial business management experience, and that the company has the necessary technical experience, adequate capital to sustain its operations, a record of successful performance on government or nongovernmental contracts, and the ability to obtain personnel, facilities, equipment, etc. needed to perform contracts.
What is the 8(a) application process like and how long does it take?
Typically, the 8(a) application process from start to finish takes between 6-12 months. Upon initial submission of the application, SBA has 15 days to complete its initial screening where they will most likely find a reason to return your application and require you to resubmit the application after you’ve addressed all of SBA’s questions and concerns. SBA will likely return your application at least a few times in the initial screening stage before accepting it for processing. Once your application is accepted for processing, generally about 2-4 months following initial submission, the agency has 90 days under statute to issue a final determination.
These timelines can vary greatly depending on the complexity of your application and your responsiveness to SBA’s requests. The best way to get SBA to process your application quickly is to provide complete answers expeditiously to all of SBA’s questions.
What are the costs associated with 8(a) certification?
There is no fee to apply to the 8(a) Business Development Program. Given the arduous nature of the 8(a) application, many business owners choose to engage experienced advisors to assist with the process.
Our team offers expert advisory services on an hourly basis to assist with organizational structure, 8(a) eligibility determination, preparation of social and economic disadvantage narratives, and 8(a) application services from initial application preparation through final determination and beyond. We will provide an hourly estimate for our anticipated level of effort based on your company’s individual needs, and work with you to identify a reasonable budget to complete the application process.
Email us at firstname.lastname@example.org so we can get to know you and identify how we can best help with your 8(a) application.