Definition

The 8(a) program is designed to remedy disadvantages in small business related to social and economic conditions. The government presumes certain ethnic groups to be socially and economically disadvantaged. Other groups may be admitted to the program if they can prove by a preponderance of the evidence that they are socially and economically disadvantaged.

Benefits

Participants designated as 8(a) are allowed to enter into sole-source contracting, receive sole-source contract awards, and enjoy slightly higher pricing than the non-8(a) average pricing, among other benefits.

Qualifications

The SBA requires that the applying company be at least 51% owned and controlled by a person who is of the presumed groups of socially disadvantaged Americans. The qualifying owner must not have been a participant in the program before, must demonstrate proof of financial responsibility and capability, and must not have a net worth in excess of $250,000.

Usefulness

Being certified by the SBA as an 8(a) company provides no advantages or benefits when competing for commercial, state, and local contracting opportunities.

Benefits to Large non-8(a) companies.

Many federal contracts incorporate clauses that require the contractor to submit a small business sub-contracting plan that includes the use of 8(a) companies to perform percentages of the work. This allows non-8(a) companies to compete for contracts they would otherwise be prevented from winning.

Source:

About 8(a) at SBA

What you should know about 8(a)

SBA 8(a) Guide

More Information:

Applying for 8(a)