In case you missed it, this week I’ll be covering the basics of the Small Business Administration’s (“SBA”) small business development programs. These program primers will hopefully provide some useful pointers for small business contractors (and those who subcontract to small businesses), as well as set the stage for future discussions regarding the rules and regulations that govern the programs.
Today, we kick things off with the SBA’s 8(a) Business Development Program.
The 8(a) program “is a business assistance program for small disadvantaged businesses.” The benefits of program membership include: access to 8(a) set-aside contracts (that is, contracts set aside exclusively for performance by 8(a) firms); the potential award of sole source contracts (contracts awarded without any competitive process); and access to joint venture and mentoring opportunities not otherwise available to small businesses. These JV and mentor-protégé features of the 8(a) program are so detailed (and important) that we’ll cover them separately in a future Blog post.
The 8(a) program is noticeably different from other SBA small business opportunities because participation is not premised on your company’s size alone – instead, you must apply for admission into the program and be accepted based on factors including:
• Company size for your “primary” industry classification;
• Unconditional ownership and control by a U.S. citizen deemed to be “socially and economically disadvantaged” (a classification that considers racial, ethnic, and social biases in American society); and
• Your potential for future success (as determined by the SBA).
Membership in the 8(a) program undoubtedly comes with many benefits and advantages – but they do not come free or last forever. First, once you are admitted to the program, your company must be sure to continue to comply with all SBA requirements (including the ownership and control factors discussed above). Second, assuming that your company is not too successful too soon (program members that exceed certain net worth and income levels can achieve “early graduation”), your participation in the Program can last for only a single, nine-year term.
Obviously, these are only the basics – the 8(a) program includes a host of requirements, rules, and regulations that must be observed, understood, and followed. So if you have any specific questions, please feel free to reach out to me directly. Also, please remember to stay tuned, as I’ll continue this series on SBA small business development programs tomorrow with a primer on the SBA’s Service-Disabled Veteran Owned Small Business programs.