Created in 1974, the SBA 8(a) allows eligible firms the opportunity to obtain federal government contracts on a non-competitive basis, giving them a huge leg up on the competition.  Limits on the contracts go as high as $5 million for manufacturing and as high as $3 million for most other types of contracts.  Additional opportunities ae given where eligible firms can enter into limited competitions where the only other bidders will be similar companies, rather than the “big guns” of the corporate world.

Annually, the federal government squirrels away more than $6 billion in contracts for 8(a) certified firms.  Unfortunately, the vast majority of qualifying minority-owned businesses never participate in this valuable program because the complexities of the application process often scare them away.  You don’t have to be fearful, however, because there are plenty of qualified attorneys out there who can help guide you through the process–and their services don’t have to cost you an arm and a leg.

Today, the SBA 8(a) Program has been improved to be a more effective vehicle for developing small businesses.  New rules and regulations allow for 8(a) companies to enter into mutually-beneficial partnership agreements and also allow federal agencies to streamline the entire contracting process to make it less of a headache.  Also, non-minority firms also have the chance to participate in the program if they can prove they have a true social disadvantage.

Here are some important factors to keep in mind regarding the 8(a) certification program:

• Businesses must:  1) be small businesses (according to the SBA provisions); 2) be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals (who must also be U.S. citizens and of good character); and 3) show a potential for success.
• The participation phases of the program are divided into two stages:  1) the development stage (4 years); and 2) the transitional stage (5 years);
• Companies who complete both stages of the program are said to “graduate” and should then be ready and able to function without the incentives and preferences granted under 8(a) certification.
• The SBA has instituted a new Mentor-Protege Program which allows newly-certified 8(a) companies to learn from more experienced businesses.