What is 8(a) Business Development Program?
The 8(a) Business Development Program provides a wide range of assistance to small businesses, and are owned by at least 51 percent socially and economically disadvantaged persons.
The program is a key tool to help socially and economically disadvantaged entrepreneurs gain access to America’s economic mainstream. The services are enabling thousands of young people in business to gain a foothold in government contracting.
8(a) Business Development Program’s emphasis is on providing support for business development including:
- Business Counseling
- Financial Assistance
- Mentoring
- Procurement Assistance
- Surety Bonding
- Training
- Other Management and Technical Assistance
Over the course of nine years, participation in the program is divided into two phases:
- A developmental stage of four years.
- A transitional stage of five years.
Benefits of the 8(a) Business Development Program
The following is a list of advantages of engaging in the 8(a) Business Development Program.
Participants can receive contracts from the sole source, up to a $4 million ceiling for goods and services, and up to $6.5 million for production.
8(a) firms are also able to form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling.
Also, see the Mentor-Protégé Program for more information to learn the ropes from other experienced 8(a) businesses.
Requirements and Goals of the 8(a) Business Development Program
The overall objective of the program is to graduate 8(a) firms that will thrive in a competitive business environment. To help achieve this goal, there are some criteria in place.
The objectives of the program require 8(a) firms to:
- Maintain stability between their investment and government business.
- Limit the total dollar value of the sole-source contracts that each participant may receive while in the program.
- To ensure that 8(a) firms meet their objectives and requirements. SBA District Offices monitor and measure the progress of the participants through:
- Annual Reviews
- Business Planning
- Systematic Evaluations
8(a) participants may benefit from advanced business training, guidance, marketing assistance and high-level executive development offered by the SBA.gov .
Moreover, you can register for access to unused government property and equipment, SBA-Guaranteed Loans and bonding aid by being active in the project.
Eligibility Requirements
Before you can participate in the 8(a) business development program, you must be certified as an 8(a) business.
On the other hand, a business must also be owned and managed by a person who is socially and economically disadvantaged to apply for the program.
Certain people are considered to be socially disadvantaged under the Small Business Act:
- African-Americans
- Hispanic Americans
- Asian Pacific Americans
- Native Americans
- American Indians
- Eskimos
- Aleuts
- Native Hawaiians
- Subcontinent Asian Americans.
Furthermore, a person who is not a member of one of the mentioned groups may be admitted to the program if he/she demonstrates that they are socially disadvantaged by a “preponderance of evidence.”
For example, a person may experience social disadvantage due to race, ethnicity, sex, physical disability, long-term residence in an area segregated from American society’s mainstream or other similar reasons.
Therefore, socially disadvantaged individuals must demonstrate an economic disadvantage by providing financial narrative and personal information on their employment, wealth and net worth.
Generally, successful business applicants must:
- Be small according to the Size standards for small business concerns.
- Demonstrate a potential for success, generally by being in business for at least two years.
- Be unconditionally owned and controlled by one or more disadvantaged individuals who are US citizens and of good character.
If an Indian tribe operates the business, an Alaska Native Corporation (ANC), a Native Hawaiian Organization (NHO) or a Community Development Corporation (CDC), they may also apply for the 8(a) BD system.
