What Is SBA 8(a) Certification?
In the alphabet soup of small business categories and certifications, you may not have heard of the Small Business Administration 8(a) Business Development Program aimed to bolster minority and other disadvantaged businesses through federal contract and other preferences.
Here are some quick facts about the 8(a) certification program:
- Eligible firms can be awarded federal government contracts on a sole-source basis (up to $3 million for goods and services and $5 million for manufacturing)
- There are 3 main requirements: 1) be a small business (according to the SBA); 2) be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals (who are of good character and U.S. citizens); and 3) demonstrate a potential for success
- Program participation is divided in 2 stages: 1) developmental stage (4 years); and 2) transitional stage (5 years)
- A company that completes the stages of the program is said to "graduate" and should be prepared to function without the incentives and preferences of 8(a) certification
- SBA has implemented the new Mentor-Protege Program to allowing newly-certified 8(a) companies to learn from experienced businesses.
- Recent changes permit 8(a) firms to form joint ventures and team up to bid contracts
If you are contemplating a small business venture or think SBA 8(a) could apply, take a look at the resources below. Think of 8(a) certification as a launch pad, a place to start from. And once an SBA 8(a) certified business is established and able to make the critical connections it needs to survive and thrive, then it can schedule a graduation to pilot the entrepreneurial terrain solo and full-throttle.