The Small Business Administration (SBA) created the 8(a) Business Development Program to help small, disadvantaged businesses compete in the marketplace.
What is the 8(a) Business Development Program?
- A business assistance program for small disadvantaged businesses. The 8(a) Program offers assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals.
- The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.
- Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.
- This is a “one time only” certification, meaning that once your business is certified in the 8(a) program, neither you (the owner) and nor any other company owned by you can be certified into the program later on.
Benefits of the Program
- Can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing. Firms are encouraged to participate in competitive acquisitions. During the first four years of the program, it is easier to receive sole source awards. However, during the last five-year-transition stage, you must compete on a specified percentage of competitive acquisitions to be able to receive sole source awards.
- 8(a) firms are also able to form joint ventures and teams to bid on contracts. The Mentor-Protégé Program allows new 8(a) companies to learn the ropes from other more experienced businesses.
Requirements and Goals of the 8(a) Business Development Program
Generally, to be approved into the 8(a) Business Development program, you must meet these eligibility requirements:
- The business must be majority-owned (51 percent or more) by an individual(s).
- The individual(s) must be an American citizen, by birth or naturalization.
- The business must be majority-owned (51 percent or more) and controlled/managed by socially and economically disadvantaged individual(s).
- The individual(s) controlling and managing the firm on a full-time basis must meet the SBA requirement for disadvantage, by proving both social disadvantage and economic disadvantage.
- The business must be a small business.
- The business must demonstrate potential for success.
- The principals must show good character.
- Separate eligibility requirements exist for a business that is owned by American Indians, Native Alaskans, Native Hawaiians or Certified Development Companies.
- The firm must have been in business (i.e., earning revenue) for at least two years. (There is a waiver process for this requirement if applicable.)
The overall program goal is to graduate 8(a) firms that will thrive in a competitive business environment. Program goals require 8(a) firms to:
- Maintain a balance between their commercial and government business.
- Limit the total dollar value of sole-source contracts that they receive while in the program to $100 million or five times the value of its primary NAICS code.
To make sure 8(a) firms are on track to accomplish their goals and are following requirements, the SBA district offices monitor and measure the progress of participants through:
- Annual reviews
- Business planning
- Systematic evaluations
Contact Information
There is plenty of free help and information offered by the Small Business Administration (SBA) for small businesses who are interested in getting into this powerful small business program:
- For general questions about the 8(a) Business Development program, please contact [email protected] (link sends e-mail)
- For help with the 8(a) electronic application, please contact [email protected] (link sends e-mail)
- For help with 8(a) regulations and requirements, please contact [email protected] (link sends e-mail)