If you’re a small business owner interested in government contracts, you’ve probably heard about the SBA’s 8(a) Business Development Program. The 8(a) Program itself is complex, but its possible benefits are astounding. If you want to learn more about it, keep reading this article.
What is the 8(a) Program?
SBA’s consists of several contracting programs, and the 8(a) Program is designed for business development encouragement. Its main purpose is to stimulate disadvantaged small businesses that meet certain eligibility criteria compete in the American economy through Federal contract opportunities and enhance businesses development.
What are the benefits for businesses that belong to this category?
Having the 8(a) status can open many doors towards success. Annually, the federal government’s goal is to award at least 5% of all prime contracts to small disadvantaged businesses, including 8(a) Program competitors. To achieve this goal, the government acquires billions of dollars services and supplies from 8(a) Program participants by means of sole-source awards and set-asides. With the last updates that have been done in the program, participants are now allowed to create joint venture relationships, like mentor-protege, to improve their ability to participate and contribute in the economy of our state. Furthermore, the SBA provides business development training for businesses that fall into 8(a) category.
Does your business meet program’s eligibility criteria?
Given these incentives, the desire to participate in the 8(a) Program is obvious. But can your business participate?
Considering these inducements, willingness to participate in the program and get the 8 a status is understandable. SBA has clear and strict eligibility requirements outlined as below:
- Be owned by an American citizen
- Be socially and economically disadvantaged
- Be 51% owned and operated by a disadvantaged person(s)
- Meet the size standards according to NAICS code
Be in business for at least 2 years
- Have a net worth under $250,000
There are some separate requirements for businesses owned by Indian Tribes, Alaska Native Corporations, Native Hawaiian Organizations, and Community Development Corporations. Moreover, you must maintain eligibility throughout the course you’re part of the program.
What is the term duration?
The term of this status is 9 years. However, depending on various factors, it can be shortened by the participant or the SBA. For instance, it can happen if your business is successful enough to graduate from the program and you’re ready to prosper on your own. In other instances, this can happen if your business fails to maintain the eligibility criteria.