SBA 8a Net Income Calculation-II
8a applicants we have been talking with recently have expressed concern that the 8a certification will lose its effectiveness if there are future cuts in federal spending due to the economy. A blanket cut in federal spending would reduce the dollar targets 8a firms receive as the federal target for 8a procurement is 5% of total spending. Below we consolidated state by state federal contract spending (leaving out entitlement and other non-relevant spending) to determine what contract dollars 8a firms would look like on a per firm bases if spending levels went back to 2006 levels. You can see that the average reduction in contracting would be around 18.5% if we went back to the 2006 levels or $2.5 million per 8a firm instead of the $3.0 million dollar average that currently exists. The conclusion that can be drawn from this data is that an 8a certification will be an effective protection against another economic downturn as the contracting levels would still be high
|
State |
2011 Active 8a Firms
|
2011 U.S. gov Contract Spending (In billions) |
2006 U.S. gov Contract Spending (In billions) |
2006-2011 Contract Spending Increase
|
2011 Targeted 8a Sales per firm at 5% goal |
2006 Targeted 8a Sales per firm at 5% goal |
|
Alabama |
155 |
11.4 |
8.3 |
37% |
3,677,419 |
2,677,419 |
|
Alaska |
224 |
2.3 |
2.1 |
10% |
513,393 |
468,750 |
|
Arizona |
162 |
14.4 |
10.6 |
36% |
4,444,444 |
3,271,605 |
|
Arkansas |
32 |
1.3 |
1.2 |
8% |
2,031,250 |
1,875,000 |
|
California |
863 |
52.9 |
43.8 |
21% |
3,064,890 |
2,537,659 |
|
Colorado |
199 |
9.9 |
7.4 |
34% |
2,487,437 |
1,859,296 |
|
Connecticut |
19 |
12.9 |
8.1 |
59% |
33,947,368 |
21,315,789 |
|
Delaware |
11 |
0.7 |
21.0 |
-97% |
3,045,455 |
95,454,545 |
|
D.C. |
194 |
19.5 |
15.8 |
23% |
5,025,773 |
4,072,165 |
|
Florida |
482 |
16.4 |
13.5 |
21% |
1,701,245 |
1,400,415 |
|
Georgia |
345 |
10.3 |
10.0 |
3% |
1,492,754 |
1,449,275 |
|
Hawaii |
149 |
3.1 |
2.3 |
35% |
1,040,268 |
771,812 |
|
Idaho |
39 |
3.0 |
1.5 |
100% |
3,846,154 |
1,923,077 |
|
Illinois |
212 |
9.4 |
6.1 |
54% |
2,216,981 |
1,438,679 |
|
Indiana |
57 |
4.9 |
5.2 |
-6% |
4,298,246 |
4,561,404 |
|
Iowa |
12 |
1.7 |
1.8 |
-6% |
7,083,333 |
7,500,000 |
|
Kansas |
41 |
2.6 |
2.5 |
4% |
3,170,732 |
3,048,780 |
|
Kentucky |
41 |
6.9 |
6.0 |
15% |
8,414,634 |
7,317,073 |
|
Louisiana |
145 |
4.5 |
9.7 |
-54% |
1,551,724 |
3,344,828 |
|
Maine |
11 |
5.2 |
2.2 |
136% |
23,636,364 |
10,000,000 |
|
Maryland |
810 |
26.1 |
22.3 |
17% |
1,611,111 |
1,376,543 |
|
Massachusetts |
49 |
16.7 |
10.4 |
61% |
17,040,816 |
10,612,245 |
|
Michigan |
123 |
5.0 |
5.4 |
-7% |
2,032,520 |
2,195,122 |
|
Mississippi |
70 |
7.3 |
6.9 |
6% |
5,214,286 |
4,928,571 |
|
Minnesota |
40 |
2.6 |
2.4 |
8% |
3,250,000 |
3,000,000 |
|
Missouri |
80 |
11.0 |
10.8 |
2% |
6,875,000 |
6,750,000 |
|
Montana |
21 |
0.6 |
0.5 |
20% |
1,428,571 |
1,190,476 |
|
Nebraska |
27 |
1.1 |
0.9 |
25% |
2,037,037 |
1,629,630 |
|
Nevada |
75 |
2.5 |
2.2 |
14% |
1,666,667 |
1,466,667 |
|
New Hampshire |
10 |
1.6 |
1.3 |
23% |
8,000,000 |
6,500,000 |
|
New Jersey |
134 |
9.3 |
7.1 |
31% |
3,470,149 |
2,649,254 |
|
New Mexico |
163 |
7.2 |
7.6 |
-5% |
2,208,589 |
2,331,288 |
|
New York |
172 |
11.3 |
10.9 |
4% |
3,284,884 |
3,168,605 |
|
North Carolina |
146 |
5.9 |
4.4 |
34% |
2,020,548 |
1,506,849 |
|
North Dakota |
13 |
0.7 |
0.4 |
71% |
2,500,000 |
1,461,538 |
|
Ohio |
170 |
7.5 |
8.0 |
-6% |
2,205,882 |
2,352,941 |
|
Oklahoma |
127 |
3.2 |
2.6 |
23% |
1,259,843 |
1,023,622 |
|
Oregon |
44 |
1.5 |
1.1 |
36% |
1,704,545 |
1,250,000 |
|
Pennsylvania |
113 |
19.3 |
10.4 |
86% |
8,539,823 |
4,601,770 |
|
Puerto Rico |
0 |
0.6 |
0.7 |
-8% |
N/A |
N/A |
|
Rhode Island |
6 |
0.9 |
0.5 |
67% |
7,500,000 |
4,500,000 |
|
South Carolina |
66 |
6.6 |
5.1 |
29% |
5,000,000 |
3,863,636 |
|
South Dakota |
23 |
0.7 |
0.6 |
18% |
1,543,478 |
1,304,348 |
|
Tennessee |
83 |
9.5 |
6.9 |
38% |
5,722,892 |
4,156,627 |
|
Texas |
759 |
38.8 |
34.8 |
11% |
2,555,995 |
2,292,490 |
|
US Virgin Islands |
2 |
0.6 |
0.0 |
6233% |
14,250,000 |
225,000 |
|
Utah |
64 |
3.5 |
3.2 |
9% |
2,734,375 |
2,500,000 |
|
Vermont |
1 |
0.5 |
0.8 |
-42% |
24,500,000 |
42,000,000 |
|
Virginia |
950 |
59.8 |
42.0 |
42% |
3,147,368 |
2,210,526 |
|
Washington |
149 |
12.0 |
7.9 |
52% |
4,026,846 |
2,651,007 |
|
West Virginia |
18 |
1.7 |
1.0 |
70% |
4,722,222 |
2,777,778 |
|
Wisconsin |
65 |
6.7 |
3.0 |
123% |
5,153,846 |
2,307,692 |
|
Wyoming |
9 |
0.3 |
0.3 |
4% |
1,611,111 |
1,555,556 |
|
Averages |
7,975 |
476 |
401 |
18.5% |
2,982,947 |
2,517,110 |
*data taken from small business dynamic search and USA Spending websites.
If you have any questions about the 8a certification or would like for us to qualify you for the 8a certification please feel free to give us a call at 513-843-4288.