SBA Offers Online 8(a) Program Application

Program helps small, disadvantaged businesses

Small Business Owner
Manager of a Candy and Baking Supplies Small Business in California. Mardis Coers/Moment Mobile/Getty Images

The U.S. Small Business Administration (SBA) has unveiled a new electronic online application process that will make it easier, faster and less expensive for small businesses to apply for 8(a) Minority Small Business and Capital Ownership Development Program.

The Minority Small Business and Capital Ownership Development Program—commonly known as the “8(a) Program”—offers training, technical assistance, and contracting opportunities in the form of set-aside and sole-source awards to participating small businesses.

Set-Aside vs. Sole-Source Awards

Set-aside awards are federal government contracts for which only certain contractors may compete. Sole-source awards are contracts that are awarded without competition. Sole-source awards are based on the government’s determination that only one known source of the product or service exists or that only one single supplier can adequately fulfill the requirements of the contract.

In FY2018 alone, SBA 8(a)-certified firms were awarded $29.5 billion in federal contracts, including $9.2 billion in 8(a) set-aside awards and $8.6 billion in 8(a) sole-source awards. Other programs provide similar assistance to other types of small businesses, such as women-owned, HUBZone, and service-disabled veteran-owned businesses.

8(a) Eligibility at a Glance

Generally, 8(a) Program certifications are granted only to small businesses that are “unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of “good character” and citizens of and residing in the United States” that demonstrate “potential for success.”

While the SBA presumes that members of certain racial and ethnic groups are “socially disadvantaged,” other individuals who do not belong to any of these minority groups may prove they are also socially disadvantaged. To be considered economically disadvantaged, an individual must have a net worth of less than $250,000, excluding the value of their ownership in the 8(a) firm and equity in their primary residence at the time they apply for certification. This amount increases to $750,000 for continuing eligibility.

To determine whether 8(a) applicants are of “good character,” the SBA considers any criminal conduct, violations of SBA regulations, debarment or suspension from federal contracting or loss of a federal contract due to failure to perform. For a firm to show “potential for success,” it generally must have been in business in its primary industry classification for two years immediately prior to applying to the program. However, small businesses owned by Alaska Native Corporations, Community Development Corporations, Indian tribes, and Native Hawaiian Organizations are eligible to participate in the 8(a) Program under terms defined by the Small Business Act, Small Business Administration (SBA) regulations, and judicial decisions.

Benefits of 8(a) Certification

Small businesses that gain SBA 8(a) program certification can compete for and get sole-source government contracts worth up to $4 million for goods and services and $6.5 million for manufacturing.

8(a) certified firms may also from joint ventures and teams to bid on government contracts. “This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract,” notes the SBA.

In addition, the SBA’s Mentor-Protégé Program allows newly-certified 8(a) firms to “learn the ropes” from more experienced businesses.

Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.

Basic 8(a) Certification Eligibility Requirements

While the SBA imposes many specific requirements for 8(a) certification, the basics are:

  • The business must be at least 51% owned and controlled by an individual or individuals who are socially and economically disadvantaged. The owners must be able to prove they meet the SBA requirements for both social disadvantage and economic disadvantage.
  • The owner(s) must be an American citizen, by birth-right or naturalization.
  • The business must meet the SBA size limits for a small business.
  • The business must demonstrate to the SBA that it has a “potential for success.”

More About the 8(a) Online Application

Announced during a luncheon at Minority Enterprise Development (MED) Week by SBA Administrator Hector V. Barreto, the new automated online 8(a) application will substantially reduce the time and cost of applying for certification.

"The newly launched 8(a) online application will allow small businesses to apply for 8(a) and SDB certification directly from the SBA's Web site, and ensure more small businesses are able to successfully compete for federal contracting opportunities," Barreto said. "This user-friendly application represents another accomplishment of this Administration in developing e-Gov tools that make access to information less cumbersome for small business."

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The SBA's 8(a) Business Development Program helps small businesses owned, controlled, and operated by socially and economically disadvantaged individuals by providing management, technical, financial and federal contracting assistance with the aim of helping these entrepreneurs create viable businesses. About 8,300 companies are presently certified in the 8(a) program. During FY 2003, $9.56 billion in federal contracts were awarded to companies participating in the program.

The new automated application was developed by an 8(a) firm, Simplicity, Inc. in conjunction with the SBA's Office of Government Contracting and Business Development. It employs decision logic to screen applications allowing the SBA to review and process applications more efficiently and provide improved customer service.

The application is 100 percent Web-based, allowing applicants to apply without downloading any software or plug-ins, replacing a four-page written application that required substantial supporting documentation.