8(a) Certification Basics
What is the 8(a) Program? The 8(a) Certification Program, named 8(a) after its location in FAR (Federal Acquisition Regulations) is the SBA (Small Business Administration) Program designed to provide preferential treatment to small businesses and their owners who have suffered from past discrimination and/or cultural bias, these firms are typically minority owned businesses.
How does it help a Business Succeed? The mechanism for the operation of the 8(a) program is the SBA obtains sole source federal contracts on behalf of the 8(a) firm which then serves as the subcontractor to the SBA. By having the SBA serve as the contractor to the federal agency the SBA is able to cut the majority of the red-tape associated with federal contracting. This enables the 8(a) small business to more easily obtain large federal contracts, relative to the firm’s size and capabilities. The certification also allows for set-aside contracts whereby only 8(a) program participants are invited to compete, as well as the ability for 8a firms to joint venture with larger business enterprises.
What is a likely benefit in revenue to my firm? In recent years 8a firms have obtained over 8% of Federal Spending. As you can see from the table below the growth in 8a spending has been significant over the past decade.
|
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
|
|
8a Spending in billions $ |
$32.3B |
$30.6B |
$34.7B |
$35.4B |
$39.1B |
$40.2B |
$46.5B |
$51.6B |
|
Average per firm in millions of $ |
$3.6MM |
$3.2MM |
$3.9MM |
$4.2MM |
$6.0MM |
$6.3MM |
$6.3MM
|
$8.2MM |
What are the most common industries of 8(a) program participants? Most Common 8a firm types are listed below (based upon dynamic small business data search)
|
Business Industry |
Percentage |
|
IT (Information Technology) and Consulting |
40% |
|
Construction |
30% |
|
Staffing |
10% |
|
Other |
20% |
If I am in the 8(a) Other Industry Category will I get sales? IT, Consulting and Construction make up approximately 70% of 8(a) firms. With this said some of our most successful clients have been 8a firms that have found a specific niche working with a federal agency. So do not let these numbers discourage you if you are in another industry. There is not a set rule that applies to 8(a) contracting other than making sure you firm has a successful marketing program. In our opinion these two factors generally yield a high growth rate for the firm.
What are the qualifications for applying for 8(a)? Here is a link to our 8(a) Qualification Tool on our website: https://www.ez8a.com/pre-qualification-tool.aspx