If you’re interested in learning more about the 8(a) Business Development program, you’ve come to the right place. We’ll go over all the details, like the eligibility criteria for an 8(a) certification, how the program can benefit your business, and the application process.
What is an 8(a) certification?
The term 8(a) refers to a section of the United States Small Business Act that authorizes the Small Business Association (SBA) to establish the 8(a) Business Development program. The program was created by the SBA with the intention of helping to meet the federal government objective of awarding at least five per cent of contract dollars to small disadvantaged businesses.
In general, the 8(a) certification is a nine-year program designed to aid firms owned and controlled by socially and economically disadvantaged individuals. However, in January 2021, the SBA issued an interim final rule allowing a program extension period for all firms actively enrolled in the program as of March 13 2020 due to the COVID-19 situation. In normal circumstances, the program consists of a four-year developmental stage, followed by a five-year transition stage.
A firm with 8(a) certification is a current participant in the 8(a) Business Development program, which validates their status as a diverse business and provides a number of professional benefits to help them join the economic mainstream and compete effectively in a competitive marketplace.
Benefits of the 8(a) program
Here are some of the main benefits that 8(a) certified businesses have access to.
- Tools to expedite business growth
Since the purpose of the 8(a) program is to increase the skills necessary to participate in the American economy, program participants will receive various forms of assistance to address any business concerns in areas including management and leadership development, business counselling, marketing and procurement assistance, and financial training. They will also receive free training from the SBA’s 7(j) Management and Technical Assistance program.
- Eligibility to compete for government business including federal contracts, set-asides, and surplus supplies and property
Once you are a certified firm in the 8(a) program, your business will be eligible to receive federal contracting preferences, opening up the option to bid on contracts from federal agencies. This means that you can compete for and receive set-aside and sole-source contracts, contract awards, and any other set-asides your firm qualifies for. You will also be eligible to receive federal surplus supplies and property on a priority basis.
- One-on-one business development assistance
In addition to general training and tools, an 8(a) certified firm will receive specific one-on-one business development assistance from their dedicated Business Opportunity Specialists. They can help you navigate the federal contracting system in order to improve your firm’s chances of earning government contracts and accomplishing your business objectives.
- The opportunity for a mentorship with a more established business
Through the SBA Mentor-Protégé program, you will not only receive guidance for your business, but you will also have the ability to bid on contracts as a joint venture with an established business in order to gain access to bigger contracts and grow your business.
In addition to these benefits, through 8(a) Business Development program participation, your firm will be eligible for SBA guaranteed business loans.
8(a) certification requirements
Here are the main requirements for a business owner to apply for the 8(a) program.
- Eligibility
In order to qualify for the 8(a) program, you must meet the eligibility requirements, which require you to be a small business that is at least 51 per cent owned and controlled by experienced socially and economically disadvantaged business owners. The SBA considers a person to be socially and economically disadvantaged based on a number of factors including race, ethnic origin, gender, and physical handicap. The firm also must have been in business for a minimum of two years, be interested in expanding into the federal marketplace, and demonstrate a balance between government and commercial projects.
- Online application submission
You must submit an online application complete with all necessary corporate documents.
- Ongoing compliance with eligibility requirements
8(a) certified firms must agree to have their progress and compliance monitored by the SBA throughout the nine-year program. This includes certifying on an annual basis that the firm meets all statutory and regulatory requirements, and ensuring that your firm does not receive more than your primary NAICS code’s value (or $100 million) in sole-source contracts.
- Submission to an annual review
Every year, your firm has to submit specific information to your SBA District Office in order to continue with the 8(a) program. Prepare yourself by using this 8(a) annual review document checklist.
Who qualifies for 8(a) status?
Your business organization may qualify for 8(a) status if you:
- Qualify as a small business according to the North American Industry Classification System (NAICS).
- Are certified by the SBA.
- Have not previously participated in the 8(a) program (NOTE: there is an exception for Alaska Native corporations, Community Development Corporations, Indian tribes, and tribal-owned Native Hawaiian organizations, which may have have multiple entity-owned firms participate in the program).re at least 51 per cent owned and controlled by U.S. citizen(s) defined by the federal government as socially and economically disadvantaged.
- Have a personal net worth of maximum $750 thousand, an adjusted gross income of maximum $350 thousand, and assets totalling a maximum of $6 million.
- Demonstrate you are a good candidate for certification through showing good character and an ability to meet contract deadlines.
- Demonstrate your potential for success, usually by having been in business for at least two years. In other words, the 8(a) certification is designed for already established businesses, so if you’re just starting your business, you won’t be eligible. Other factors for determining your firm’s potential for success include past revenue, contracts within your industry, business expertise, access to credit and capital, and compliance with all necessary business licensing.
How to apply to the 8(a) program
Now that you understand what kind of businesses the 8(a) program is intended for, we’ll take you through the steps you’ll need to follow in order to be considered for certification.
- Identify your primary NAICS code.
- Create a profile and register your business in the System for Award Management (SAM).
- Submit your application for 8(a) certification, complete with all necessary corporate organization documents, online or locally.
Once your application is complete, the SBA has 90 days to process your submission and decide whether to accept you into the 8(a) certification program.
Frequently asked questions
What does 8(a) mean in business?
8(a) itself refers to a specific section of the Small Business Act. An 8(a) firm is a small business that is enrolled in the 8(a) Business Development program.
How do you get an 8(a) contract?
Once you’re in the 8(a) program, there’s no guarantee that you’ll be awarded the contracts you apply for. Your best bet is to develop a strategic plan for marketing your business, including getting specific about what makes your business unique and why the government should choose you.
Is the 8(a) Business Development program right for my business?
If your firm fits the eligibility criteria, the 8(a) Business Development program could be the perfect next step for your business to gain valuable industry knowledge, make powerful connections, and grow your company at a faster rate.
If your business doesn’t qualify for the 8(a) program, the SBA offers other contracting assistance programs you may be eligible for.
Locations other than the U.S. also offer business development programs, like Canada Starts, the Atlantic Canada Business Development Program, and these resources for Indigenous entrepreneurs.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.