What is the SBA 8(a) Certification?

The 8(a) Certification program, an initiative by the SBA, aims to support small and disadvantaged businesses in competing for federal contracting opportunities. Its goal is to allocate at least 5 percent of federal contracting dollars to these businesses, specifically those owned and controlled by socially and economically disadvantaged individuals. 

The program targets those who have encountered racial, ethnic prejudice, or cultural bias. Economic disadvantage is assessed based on capital and credit opportunities in comparison to others within the same industry.

The 8(a) program is structured to foster and sustain business growth over a nine-year period. It comprises two phases: a four-year developmental stage followed by a five-year transitional stage.

Key benefits of the 8(a) program

Set Asides (Competitive)

Competitive set-asides are federal contracting opportunities designed to support small, disadvantaged businesses participating in the 8(a) program. By reserving these contracts exclusively for 8(a) businesses, the government aims to create a more level playing field. 

To ensure a competitive bidding process, contracting officers must anticipate at least two qualified 8(a) businesses submitting offers. Contracts are awarded at fair market value and adhere to government-specified dollar thresholds. 

This program significantly boosts 8(a) businesses’ ability to compete for and secure federal contracts, promoting growth and development within this sector.

Sole-Source Set Asides

The 8(a) program permits sole source contracts, which are awarded directly to a single 8(a) certified business without competition, in addition to competitive set-asides.  

A sole source contract may be awarded if a qualified 8(a) small business is determined to be responsible, and the contract can be awarded at a fair market price. The government’s estimate for these contracts, as with other set-asides, should not exceed $7 million for manufacturing requirements or $4.5 million for all other requirements. 

Sole source set-asides provide simplified access to federal contracts, which can be particularly beneficial when time or unique capabilities are critical factors.

Development Assistance

The Mentor-Protégé program provides 8(a) certified businesses with compliance and regulatory experts as well as one-to-one assistance.

Training Programs

Management and Technical Assistance programs are available for enhancing competitiveness.

Mentorship Opportunities

The SBA Mentor-Protégé program allows 8(a) businesses to leverage the past performance of their larger business mentors to qualify for contracts they would not otherwise be eligible for. This gives the 8(a) businesses the opportunity to build a performance resume and gain valuable experience.

Understanding the Limitations

The program’s benefits are significant, but it’s crucial to understand its limitations. Businesses can only participate once and are subject to annual reviews to maintain eligibility. If a business is found to be ineligible during these reviews, it may lose its certification.

Eligibility for 8(a) Certification  

According to the SBA website, to qualify for an 8(a) Certification, the organization must:

• Be classified as a small business.
• Be at least 51% owned and controlled by U.S. citizens who are economically and socially disadvantaged. The controlling owner must meet the following limits:
  • Personal income less than $400,000 per year
  • Net worth less than $850,000
  • Total assets less than $6.5 million
• Have the potential to perform on the federal contracts they apply for.
• Have good character.
• Demonstrate the potential for success such as having been in business for two years.

SCM Consulting has helped several businesses understand and meet these qualifications.

The Certification Application Process

To obtain 8a Certification, you must register in SAM, complete the GLS process, and apply through certify.sba.gov. You will need to submit documents such as financial statements, business plans, and personal financial information. Using an 8(a)-certification consultant can help simplify the application process.

Does obtaining an 8(a) certification guarantee work?

While the 8(a) certification and other small/disadvantaged business certifications do not guarantee work, they do allow you to bid on projects where factors besides price are considered. When combined with fair market pricing and the ability to do the required work, 8(a) certification can increase your chances of winning more bids.

After your business is certified, it is essential to make the most of it. Networking, making use of SBA resources, and finding government contracting opportunities that match your business’s skills and objectives are all ways to leverage this certification to your business’s advantage. An experienced business coach, such as SCM Consulting, can be especially helpful in this situation. We can advise you and assist you in creating a strategy to position and successfully market your company.