8(a) is a Cornerstone Federal Program Spanning Multiple Administrations
The 8(a) program’s origins span several presidencies:
- Dwight D. Eisenhower was president when the Small Business Development Act was signed, which laid the initial groundwork for the SBA’s authority, though not explicitly the 8(a) program as we know it today.
- Lyndon B. Johnson and Richard Nixon laid more specific foundations for the program, with Johnson establishing programs that used the SBA’s Section 8(a) authority in a small-scale way, and Nixon focusing more on minority-owned small businesses.
- Jimmy Carter was president in 1978 when the explicit statutory authority for the 8(a) Business Development program, in its more recognized form, was established through amendments to Section 8(a) of the Small Business Act.
Congress Created 8(a) as Part of a Strategic Vision
Congress created the 8(a) program to combat historical and systemic barriers that prevented socially and economically disadvantaged small businesses from securing federal contracts. Stemming from the Civil Rights Movement, the program aimed to level the playing field by addressing discrimination and inequality in access to capital and market opportunities. Beyond simply awarding contracts, the 8(a) program provides crucial business development support, including contracting preferences, mentorship, and training, with the goal of helping these firms build capacity and ultimately thrive independently in the competitive marketplace. Implicit in this design was the expectation that the success of these businesses would also generate jobs, wealth, and serve as role models, thereby benefiting the communities in which they were located. The 1978 amendments to the Small Business Act solidified this commitment, giving the program its formal statutory authority.
The 8(a) Program Benefits: Cut Red-Tape, Give Preference, Enhance Capabilities
Sole Source Contracts
Set-aside Contracts
Joint Ventures
8(a) Certification Key Features
- This small business development program enables minority-owned businesses to obtain business support from the SBA. Under the 8(a) program, small businesses can be introduced by the SBA to contract directly with federal agencies that need qualified 8(a) contractors to meet their congressional budgetary guidelines for spending.
- The program gives 8(a) firms 9 years of preference in federal contracting to overcome prior years in which they suffered from racial, ethnic, gender, geographical or disability bias.
- The 8(a) certification and business development program consists of two phases over the 9-year eligibility period. Phase 1: 4-year “Development Stage” followed by a Phase 2: 5 -year “Transitional Stage”. During the Transitional Stage, the firm is required to take steps to ensure its survivability once it graduates from the 8(a) program.
8(a) Certification By Design Will Grow Your Business
The AVERAGE 8(a) firm has over $5MM per year in Federal Contracts.
What affects your sales numbers are these seven factors:
- Industry
- Your Firm’s Capabilities
- Geographical Location
- Partnerships (JV/Mentor)
- Marketing Execution: Skill, Plan and Effort
- Federal Contracting Vehicles
- Federal Past Performance
7 Success Factors
1. Industry – What are the Average Sales in Your Industry
Use the drop-down arrows to find the number of 8(a) firms in your industry and the average per firm sales. This data also goes over the advantage for having both an 8(a) Certification and a GSA Schedule Contract.
Computer Hardware
| 8(a) Average Sales this Industry | GSA Schedule Sales for a firm with an 8(a) in this Industry | Synergy (Generally adding an 8(a) to a GSA Creates More Sales than from the GSA Schedule Alone) | Synergy Ratio | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 8(a) Industry Grouping | Total 8(a) Federal Sales | Number of 8(a) Firms | Average 8(a) Sales | GSA Schedule Only Sales 8(a) Firms | Number of 8(a) Firms w/ GSA Schedule | Average 8(a) Sales Directly from the GSA Schedule System | Total Federal Sales 8(a) GSA Contract Holders | Number of 8(a) Firms w/ GSA Schedule | Average Total 8(a) Federal Sales for firms with a GSA Schedule | GSA Schedule Sales Advantage | |||
| Computer Hardware | 240,128,678 | 110 | 2,181,402 | 66,115,504 | 22 | 2,986,247 | 323,070,680 | 22 | 14,592,172 | 6.7 | |||
| EDWOSB Totals / Average | 237,175,294 | 206 | 1,151,336 | 72,299,922 | 22 | 3,286,630 | 176,093,178 | 22 | 8,004,235 | 7.0 | |||
| WOSB Totals / Average | 624,755,078 | 593 | 1,053,549 | 154,947,340 | 116 | 1,335,753 | 357,603,194 | 116 | 3,082,786 | 2.9 | |||
2. Your Firm’s Capabilities
Your firm does not have to possess all of these to be successful in the 8(a) program but you should be at least thinking about how to obtain these capabilities to have success in the 8(a) Program.
Core Capabilities:
- Proven Past Performance
- Strong Technical Expertise
- Quality Management Processes
- Scalability for Growth
Financial & Administrative:
- Financial Stability
- Federal Contract Management Experience
- Surety Bonding Capacity (if construction)
Government Contracting Acumen:
- Understanding of Federal Market & Acquisition
- Effective Proposal Writing
- Government Networking & Relationships
- Necessary Security Clearances (if applicable)
Strategic & Business Development:
- Clear Strategic Business Plan
- Professional Marketing & Branding
- Mentorship/Teaming Strategy
3. Geographical Location
A third of all 8(a) firms are located in the DC Corridor (DC, Maryland, and Virginia), where approximately 40% of all 8(a) sales take place. For some industries, being located near DC is a competitive advantage; for others, it has limited or no impact.
Here’s a state-by-state list with 8(a) sales data to see how 8(a) firms are performing in your state:
1/3
| STATE | ABB | # 8(a) FIRMS | SALES | AVG. SALES |
|---|---|---|---|---|
| Alabama | AL | 134 | 1,000,000,000 | 7,462,687 |
| Alaska | AK | 314 | 5,300,000,000 | 16,878,981 |
| Arizona | AZ | 102 | 337,500,000 | 3,302,984 |
| Arkansas | AR | 19 | 46,500,000 | 2,447,368 |
| California | CA | 410 | 1,700,000,000 | 4,146,341 |
| Colorado | CO | 105 | 776,000,000 | 7,390,476 |
| Connecticut | CT | 17 | 50,500,000 | 2,970,588 |
| Delaware | DE | 8 | 254,955 | 31,869 |
| District of Columbia | DC | 166 | 681,600,000 | 4,106,024 |
| Florida | FL | 356 | 1,500,000,000 | 4,213,483 |
| Georgia | GA | 207 | 570,300,000 | 2,755,072 |
| Guam | GU | 11 | 69,500,000 | 6,318,182 |
| Hawaii | HI | 84 | 814,700,000 | 9,698,810 |
| Idaho | ID | 28 | 208,100,000 | 7,432,143 |
| Illinois | IL | 68 | 177,800,000 | 2,614,706 |
| Indiana | IN | 37 | 51,800,000 | 1,400,000 |
| Iowa | IA | 10 | 18,400,000 | 1,840,000 |
| Kansas | KS | 36 | 128,000,000 | 3,555,556 |
| Kentucky | KY | 18 | 65,900,000 | 3,661,111 |
| Louisiana | LA | 94 | 229,900,000 | 2,445,745 |
| Maine | ME | 12 | 48,100,000 | 4,008,333 |
| Maryland | MD | 657 | 3,900,000,000 | 5,936,073 |
| Mississippi | MS | 39 | 93,600,000 | 2,400,000 |
| Massachusetts | MA | 43 | 105,200,000 | 2,446,512 |
| ichigan | MI | 69 | 294,200,000 | 4,263,768 |
| Minnesota | MN | 22 | 77,800,000 | 3,536,364 |
| Missouri | MO | 50 | 175,700,000 | 3,514,000 |
| Montana | MT | 13 | 102,200,000 | 7,861,538 |
| Nebraska | NE | 27 | 285,800,000 | 10,585,185 |
| Nevada | NV | 37 | 210,300,000 | 5,683,784 |
| New Hampshire | NH | 6 | 30,800,000 | 5,133,333 |
| New Jersey | NJ | 102 | 596,400,000 | 5,847,059 |
| New Mexico | NM | 55 | 224,800,000 | 4,087,273 |
| New York | NY | 85 | 448,700,000 | 5,278,824 |
| North Carolina | NC | 81 | 179,600,000 | 2,217,284 |
| North Dakota | ND | 12 | 157,400,000 | 13,116,667 |
| Ohio | OH | 81 | 217,400,000 | 2,683,951 |
| Oklahoma | OK | 97 | 1,800,000,000 | 18,556,701 |
| Oregon | OR | 35 | 171,800,000 | 4,908,571 |
| Pennsylvania | PA | 101 | 254,000,000 | 2,514,851 |
| Puerto Rico | PR | 69 | 100,300,000 | 1,453,623 |
| Rhode Island | RI | 7 | 16,000,000 | 2,285,714 |
| South Carolina | SC | 58 | 162,300,000 | 2,798,276 |
| South Dakota | SD | 7 | 31,000,000 | 4,428,571 |
| Tennessee | TN | 64 | 201,600,000 | 3,150,000 |
| Texas | TX | 367 | 2,100,000,000 | 5,722,071 |
| Utah | UT | 37 | 107,200,000 | 2,897,297 |
| Vermont | VT | 1 | 1,100,000 | 1,100,000 |
| Virginia | VA | 1,067 | 10,600,000,000 | 9,934,396 |
| Virgin Islands | VI | 4 | 122,210 | 30,553 |
| Washington | WA | 66 | 292,200,000 | 4,427,273 |
| West Virginia | WV | 15 | 178,400,000 | 11,893,333 |
| Wisconsin | WI | 31 | 302,500,000 | 9,758,065 |
| Wyoming | WY | 4 | 14,800,000 | 3,700,000 |
4. Geographical Location
What makes for a good 8(a) JV Partner:
- Medium Sized Federal Contractors, looking to enter a new agency or expand existing business.
- 8(a) Firms that are in their 8th Year that are planning for 8(a) Program Graduation.
- Firms that were prior 8(a) firms looking to get back into the government space.
Great JV Partners
5. Marketing Execution: Skill, Plan and Effort
Three Agency Strategy
Our most successful clients start with only three agencies and then quickly move down to a single agency. They stay focused on this single agency until they are ready to expand into a new agency that they think is a strong fit.
6. Federal Contracting Vehicles
Under the current administration having a GSA Schedule is going to be a “must have” or critical success factor. Additionally other GWACs (Government-wide Acquisition Contracts) such as 8(a) Stars, Oasis, SEWP, Polaris, HCaTS and many other can add millions in sales to an 8(a) Firms bottom line.
8(a) Boosters! = GWACS
7. Federal Past Performance
It is critical that your firm obtained Exceptional and Very Good ratings on all the work you perform for the federal government.
Exceptional (4.0-5.0): Performance meets contractual requirements and exceeds many to the Government’s benefit.
Very Good (3.0-4.0): Performance meets contractual requirements and exceeds some to the Government’s benefit.
Satisfactory (2.0-3.0): Performance meets contractual requirements.
Marginal (1.0-2.0): Performance does not meet some contractual requirements.
Unsatisfactory (0.0-1.0): Performance does not meet most contractual requirements, and recovery is not likely in a timely manner.
From our experience in talking with contracting officers the government on a major contract is typically willing to pay 5-8% more for a client with an Exceptional ranking over one with a Very Good ranking. Therefore protect your margins and always do a great job!
Excellence Matters
Ready or Not Ready Yet for 8(a)? We Can Help!
As there are many intricacies to the 8(a) Certification, calling us is always the best way to make sure you qualify or to learn what you need to do in order to meet the 8(a) qualifications. Call us at 859-442-3300 for a 10-minute qualifying call or use our prequalification tool (below) for a preliminary check.
Interested? Qualify Yourself
in 3 Minutes Using Our Tool
8(a) Package
Find out about our 8(a) Certification Package
Social Disadvantaged
Is the 51% owner(s) of the firm U.S. Citizens....
Do you have one of the following:
- 25% or more of your blood heritage from a minority group?
- Have a tribal card from a state or federally recognized Native American Indian Tribe?
- Are you a woman who has suffered substantial and chronic gender bias?
- Are you a Service-Disabled veteran who has suffered substantial and chronic handicap bias?
- Are you a Middle Eastern American who has suffered substantial and chronic racial bias?.........
Ok then, are you a woman who has suffered substantial and chronic gender bias, or a Service-Disabled veteran who has suffered substantial and chronic handicap bias, or a Middle Eastern American who has suffered substantial and chronic racial bias?.....
Economically Disadvantage
Has the owner of the firm made more than $400,000 per year, on average, for the past 3 years.
Is the owner’s net worth less than $850,000 excluding (a.) the owner’s primary residence, (b.) the business applying for 8(a) (c.) the owners retirement accounts.
Is the owners’ total assets less than $6,500,000 excluding retirement accounts.
Potential to Succeed at Federal Contracting
Does the owner of the firm work full-time for the business; meaning Monday-Friday from 9am-5pm.
Did the firm make a profit on its most recent tax return.
Does the firm have a positive net worth.
Has the firm been in business for at least two-years?, meaning the business has filed two tax returns with revenue on both. -or- Two-year waiver: Has the firm had at least $150,000 in revenue since the inception of the firm as well as a profit on the fi
Has the firm obtained more than 70% of the firm’s revenue from a single source? This calculation is for the most recent calendar year to the date of the 8(a) application.
Control Issues
Is the owner of the firm the one managing the day-to-day operations, long-term strategic planning, and the highest compensated person at the firm.
8A PROGRAM NARRATIVE CHANGE
Recent changes to the 8(a) Social Disadvantage Narrative creates a more complex application but also provides a more level playing field
8(a) Major Changes - Social Disadvantage Narrative (What You Need to Know!)
Existing 8(a) Firms Actions
All current 8(a) participants received a direct communication from SBA on or about Monday, August 21, 2023, detailing the process for establishing social disadvantage through a social disadvantage narrative.
8(a) participants must submit an individual social disadvantage narrative through the Certify.sba.gov system.
Multiple Disadvantaged Owners – for 8(a) participants who have multiple disadvantaged individuals, each disadvantaged individual is required to submit an individual social disadvantage narrative.
Note: If as part of your original application for admittance into the 8(a) program the qualifying owner submitted a narrative as part of the original application, then this firm will not need to submit a new narrative.
