The SBA’s 8(a) Business Development program is designed as a temporary incubator, limiting a firm’s participation to a strict nine-year period. After this term, firms graduate from the program and lose eligibility for most 8(a) set-aside contracting benefits.
Currently, there are 879 IT companies in the 8(a) program, collectively generating about $9.1 billion annually in federal sales. As the data below illustrates, there is a distinct progression in revenue generation as firms mature. Companies typically hit their stride and figure out the federal landscape around Year 5. While 8(a) IT firms that secure GSA Schedules tend to accelerate this success much earlier, fewer than half actually take advantage of that contract vehicle, and even fewer do it early.
The Approaching Drop-Off The critical issue facing the federal IT market is a looming graduation cliff. Over the past two years, only 43 new 8(a) IT firms have successfully entered the federal roster (Years 1 and 2). In stark contrast, 219 firms will graduate and drop off the roster over the next two years (Years 8 and 9).
Crucially, these graduating firms currently account for over 60% of all federal 8(a) IT sales. With few new entrants replacing the heavy hitters aging out of the program, a massive shift in market share is on the horizon.
Federal 8(a) IT Firms: Revenue by Program Year
| Current 8(a) program year | 8(a) IT Firms | Observed Federal Sales | % of total |
| Year 1 | 24 | Data not mature | N/A |
| Year 2 | 19 | Data not mature | N/A |
| Year 3 | 181 | 259,500,000 | 2.80% |
| Year 4 | 78 | 214,300,000 | 2.30% |
| Year 5 | 108 | 853,400,000 | 9.30% |
| Year 6 | 133 | 1,050,000,000 | 11.50% |
| Year 7 | 117 | 1,220,000,000 | 13.30% |
| Year 8 | 91 | 1,924,000,000 | 21.00% |
| Year 9 | 128 | 3,628,000,000 | 39.70% |
| Total | 879 | 9,149,200,000 | 100% |
Source: Dynamic Small Business Search (DSBS), USAspending (2025)
If you would like to find out how an 8(a) certification can help your firm grow give us a call at 859-442-3300, and in about a 10 minute call we can go over the qualifications and help you determine if this opportunity is right for you!
