Facts about the SBA 8a Certification Program

Most people don’t understand how becoming certified as an 8(a) firm can help propel their business to the next stage of success. Becoming approved as an 8(a) firm is like being in a fraternity or sorority. Those who have had those great experiences in college know that it is a brotherhood or sisterhood. They help each other, can understand each others needs and struggles etc. To date, there are only 10,000 approved 8(a) firms in the Unites States. You can just imagine from all the millions of Small Business in the United States what a small fraction that is. That being said, let’s get down and dirty with some hard core facts about why Minority owned businesses need to get certified.

The 8(a) program was created in order to give minority owned business a fair opportunity to bid against larger firms. The United States Government feels that Minorities in this country have not had the same opportunities that non-minorities have had. In order for Minorities to compete in a specific Industry, the Government has created programs, and if utilized correctly, can help advance a Minority Owned Business.

One of those programs, and the largest one at that, is the 8(a) Business Development Program.

FACTS ABOUT THE 8(A) PROGRAM:

1. The 8(a) program has been dedicated 5% of all Federal procurement budgets. This means that $18.5 Billion dollars a year is reserved for 8(a) certified firms.
2. Sole-Sourcing Contracts: This is the most attractive to me. $8.5 Billion Dollars is given to sole source awards. That is, a firm does not compete with any other firms. Even 8(a) firms. It is awarded solely to them. (More on how to get sole-source awards toward the bottom).
3. Competitive 8(a): The remaining 10 Billion  Dollars are up for bidding between 8(certified) firms only.

More on Sole Source Awards:

In order for an 8(a) firm to be eligible for sole source awards, they need to have experience in the 8(a) program and plenty of it.  The Government wants to make sure that the sole source awards are given to firms who have been successful in the program and can handle the work load given to them.

How do you get sole source awards?

First, new firms need to gain experience by entering joint venture agreements with other firms or by entering mentor-protege agreements provided the 8(a) firm does 40% of the work and makes 40% of the profits. By working this way for some time, it helps the firm in to becoming a Federal Prime Contractor. Once you have worked as a prime contractor and proven yourself, you will then be able to get sole source contracts.

Limits for Sole Source Contracts:

1. $4 million fir products/services

2. $6 Million for manufacturing

I hope the above explained the REAL benefits in getting an 8(a) Certifications. It is not easy by all means but if there is a will, there is a way.