8a Certification Consultants | FAQS
What is the SBA 8a program?
The Minority Small Business and Capital Ownership Development Program — commonly referred to as the “8a Program” — offers training, technical assistance and procurement incentives to participating small businesses in the form of set-aside and sole-source awards to those who obtain 8a certification. 8a certification consultants can help you navigate this program from start to finish.
The existing 8a program is the result of the merging of two distinct types of federal programs: those aimed at assisting small businesses in general and those targeted at assisting racial and ethnic minorities. As a matter of executive branch procedure, the merger first happened in 1967 and was granted a legal basis in 1978.
(A) Promote the development of small businesses owned and controlled by socially and economically disadvantaged individuals to compete on an equal footing in the American economy;
(B) Promote the sustainability of market-based issues by providing the necessary legal, financial, technological and management assistance; and
(C) Clarify and broaden the U.S. procurement system of goods, equipment, products, materials and building projects from SMEs run by socially and economically marginalized individuals.
8a Program eligibility is limited to small enterprises unconditionally owned and controlled by, one or more socially and economically disadvantaged individuals who are of good nature, citizens of and residents in the United States, that demonstrating the potential for success.
Each is defined in the Small Business Act, SBA regulations and judicial and administrative decisions. At the time of entry into the program and throughout the program, the eligibility criteria are identical, except where otherwise noted.
Representatives of some ethnic and racial groups are deemed socially disadvantaged, however, people who are not representatives of these groups may prove they are also socially disadvantaged.
To be disadvantaged from an economic point of view, a person must have a net worth under $250,000 at the time of entering the program (other than ownership of 8(a) company and shares in his or her main residence). The amount for continuous eligibility is increased to $750.000.
The 8a Mentor-Protected Program was created by SBA on 30 July 1998. The program is aimed at “increasing the capacity of 8a companies and enhancing their ability to compete for contracts successfully” by providing various forms of support, including technical or management training, financial assistance through equity or loans, subcontracts, business education and assistance in the execution, through joint venture agreements, of federal primary contracts.
Section 8(a) of the Small Business Act authorizes agencies to award contracts for goods or services, or to perform construction work, to the SBA for subcontracting to 8(a) firms. The act also authorizes the SBA to delegate the function of executing contracts to the procuring agencies and often does so.83
A set-aside award is a contract awarded in which only certain contractors may compete, whereas a sole-source award is a contract awarded, or proposed for award, without competition.84 The Competition in Contracting Act (CICA) generally requires federal agencies to allow full and open competition through the use of competitive procedures when procuring goods or services.
How do I apply for 8a certification?
SBA offers an online course called “Pre 8a Business Development Program Course 1 — Setting Expectations” to help you understand whether the 8a program is right for you and your business. The module is available by clicking here.
The module will also discuss the requirements for eligibility. Pay attention to see if you qualify for the 8a Business Development Program, which is limited to those who have experienced social and economic disadvantage.
Before you sit down to complete the 8a Business Development Program application you will need numerous documents. By working with an 8a certification consultant, you can save time as we will help you gather all the necessary paperwork needed, like tax documents. The following tax forms are required, for example:
- Signed and dated federal tax returns for your business for the last three years
- Signed and dated personal federal tax returns for the last three years
- For those who hold a key position in a business or who own at least 10 percent, the signed and dated personal federal tax returns for the last three years
Detailed financial data on your company is also needed. Before you sit down to complete the 8a Business Development Program application, compile the following business documents:
- three years of financial statements
- three years of profit and loss statements including the current year
- three years of balance sheet statements, including the current year
- documented proof of any asset transfer to or from the firm
- documented proof of any asset transfer to or from any of the firm’s owners (past two years)
- signature cards for the firm’s bank accounts
If you feel you need guidance on compiling these documents or a review to ensure these documents are in order, consider hiring an 8a certification consultant to help you.
With the help of our 8a certification consultants, you will receive very specific guidance about how to meet each of the five (5) conditions of the two year waiver rule for the 8a certification application.
If your business is under 2 years old (as long as it generates income), you may apply for a waiver. To receive a waiver, however, you must submit certain information, such as:
- documented significant business management experience
- demonstrated technical expertise
- sufficient capital to fund the business
- documented successful performance on contracts, such as letters of reference from clients as well as copies of contracts
- proven ability to obtain sufficient equipment, personnel, facilities, and other resources to complete contracts
Ensure copies of all signed and dated state filings are available. The state should also stamp them. Look for the following in particular:
- certificates of good standing
- foreign corporation filings
- articles of incorporation and/or articles of organization
- doing business as (“DBA”) filings
Our 8a certification consultants can help you with compiling the documents and reviewing to ensure all state related documents are in order.
You also need the following papers, which the managers of the company should have signed. Ensure the official documents contain the state signature and seals:
- bylaws, partnership agreements or operating agreements
- stock certificates and ledgers
- meeting minutes
You also require copies of business agreements or contract information. Before you start your application, you should collect the following:
- a list of all contracts (federal, non-federal, and private sector) over the past two years
- lease agreements
Our 8a certification consultants can help you compile governing documents & business contracts and review them to ensure all paperwork is in order.
You will need some personal and background information from the leaders of your company. Officials,executives, owners, investors, key employees and any one with more than 10% ownership of the company. Information to be collected in advance:
- a statement of history form
- proof of U.S. citizenship or naturalization
- a description of duties performed in the business and the amount of time devoted to each
- a list of any other business interests and time devoted to each
- description of the nature of outside employment and the time devoted to each
Because the 8a plan is limited to those who have been historically disadvantaged, you may need to get proof that the majority owners and company managers are disadvantaged as well. The proof depends on the circumstances.
- Whether you belong to certain ethnic groups, for example, Hispanic Americans or Black Americans, it is appropriate to stand as a group member and others recognize you as a group member.
- Moreover, depending on your physical handicap, ethnicity, ethnic origin, sex, or long-term residency in a remote location, you can also be deemed “disadvantaged.” The specifics of these conditions should be documented.
In addition to documenting the socioeconomic drawbacks of majority owners/company executives, you also will have to prove they are economically disadvantaged. You will need to submit the following documents as part of the application process:
- proof of all income for the past three years, which cannot exceed $250,000 on average
- proof of assets, which cannot exceed $4 million
- proof of liabilities, which will bring your adjusted net worth below $250,000
As 8a certification consultants, we can help you create your socially disadvantaged narrative document.
You can dial 1-866-705-5711 to receive this number free of charge. The identification number is a special 9-digit code. Registration with the federal government is mandatory.
Before you started your business, you probably already obtained a tax identification number. However, if you do not have one you should get it from the IRS.
You must create a profile in the System Award Management System (SAM) to finish the form online. Please visit SAM.gov’s website. Click “Create Account User” and enter the required fields.
- You may experience problems in the SAM system with your EIN / TIN combination. If so, call the IRS 1-866-255-0654 and choose Option 4.
- Your social security number may also have mishaps. If so, you can call The Social Security Administration at 1-800-772-1213 to fix this problem.
Our 8a certification consultants can create a profile in the system for you and 0nce completed with your SAM profile complete your 8a certification application online by submitting all required documentation at certify.sba.gov.
What are the benefits of 8a certification?
It means that the Government will award contracts to 8 accredited firms without even making a bid. It allows 8a companies to win fair prices without the involvement of rivals. 8a businesses are eligible when certified for 3 to 4 years or more to earn sole source awards.
The field of competition for federal contracts is limited by SBA certification. Of the 24 million companies in the United States, only 8500 are 8a certified.
The Federal Government has spent over $50 billion in the 8a program, which is about 3 million dollars in total per 8a company, and thus provides 8a qualified businesses with a lot of economic activity.
Single procurement from 8a accredited organizations eliminate or excludes the bureaucracy involved with government contracting bureaucracy. It helps business owners to concentrate instead of sending challenging RFQ forms on running their business.
Up to 10 percent of the contract value can be modified in full and open access. For instance — an 8a company that bids $100,000 is treated as $90,000 compared to its non-8a competitors.
8a firms were mandated to help victims in 560 presidential disasters where $11.5 billion in federal contracts were issued.
8A construction firms are very active in winning federal and military contracts, which can be measured by the fact that 41% of the 8a qualified firms are in the construction sector.
8a certified companies grow much faster than their counterparts. In a recent Washington Post survey, 31 out of 50 companies are 8a accredited on the top 50 IT firms in the United States of America.
The 8a Mentor/Protege program is different than connecting with an 8a certification consultant. 8A Companies are allowed to partner with other companies in so-called Joint Venture or Mentor Protege Agreements. It benefits the 8a companies, increasing their knowledge of government works, winning contracts they would otherwise not have been able to win, and helping them build their federal success history so that they can eventually win contracts on their own, in the future without a partner’s assistance.
A full and open source adjustment can be given up to 10% of the contract amount. For example — an 8a firm bidding $100,000 is treated as $90,000 when compared to their non-8a competitors.