01.

Before 8(a) Certification

The 8(a) Business Development Program 8(a) Business Development Program is a business assistance program for small disadvantaged businesses. The 8(a) Program offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals. The program is an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.

Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.

The overall program goal is to graduate 8(a) firms that will go on to thrive in a competitive business environment. There are some requirements in place to help achieve this goal. Program goals require 8(a) firms to:

  • Maintain a balance between their commercial and government business.
  • Limit on the total dollar value of sole-source contracts that an individual participant can receive while in the program: $100 million or five times the value of its primary NAICS code.

To make sure 8(a) firms are on track to accomplish their goals and are following requirements, the SBA district offices monitor and measure the progress of participants through:

In addition, 8(a) participants may take advantage of specialized business training, counseling, marketing assistance, and high-level executive development provided by the SBA and our resource partners. You can also be eligible for assistance in obtaining access to surplus government property and supplies, SBA-guaranteed loans, and bonding assistance for being involved in the program.

1. You will have access to sole source/non-competitive federal contracts with a value of:

  • $4M and under for all services related contracts.
  • $6.5M and under for manufacturing related contracts.

2. You will have access to competitive set-aside federal contracts with a value of:

  • $4M and over for all services related contracts.
  • $6.5M and over for manufacturing related contracts.

A search of FPDS (Federal Procurement Data System) found that between 10/2/2016 to 9/30/2018 there were 138,191 contract actions totaling $28,073,890,492.96 awarded in the 8(a) program. 

3. You will severely limit your potential competition.

  • There are less than 6,100 active 8(a) participants (As of February 2019) in the entire 8(a) Program.
  • The big-guys (Lockheed Martin, CSC, EDS, Halliburton, etc.) cannot compete for these contracts.

4. It is easier for your federal prospects to buy from you.

  • 8(a) contracts require much less paperwork, time and bureaucracy than most other federal procurement methods.
  • 8(a) contracts cannot be protested.

5. It is a much faster contract award process.

  • 8(a) contracts take about 1/10 the amount of time to be awarded compared to most other federal procurement methods.

6. 8(a) firms can form Joint Ventures and teams to bid on contracts.

  • You will have the ability to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract. Also through the SBA All Small Mentor Protege Program it will allow your firm to learn the ropes from other more experienced businesses.

For a 8(a) Program eligibility analysis, please take our online 8(a) eligibility questionnaire.

You are also welcome to review the basic eligibility requirements below.

Generally, to be approved into the 8(a) Program  you must meet these basic eligibility requirements:

  • All applicant(s) must be a US Citizen. (Applicant = 51% or more owner or anyone else who is considered the applicant for 8(a) Certification purposes). Additionally, all applicant(s) must reside in the United States.
  • The applicant(s) must devote full-time to the business that is applying for 8(a) Certification at the time of application submission. This means they must work at least 40 hours per week, during the normal business hours, in the business concern without any other outside employment.
  • The primary applicant must hold the highest management position within the business that is applying for 8(a) Certification. Generally, this is the CEO, President or Managing Member.
  • The primary applicant must be able to demonstrate that they are the highest compensated in the business that is applying for 8(a) Certification. Generally, the SBA will deny your 8(a) application if you cannot demonstrate the primary 8(a) Applicant is currently the highest compensated or there is a very good reason why they have elected not to be.
  • The applicant(s) must have an adjusted net worth of less than $250,000 at the time they apply for 8(a) Certification. Adjusted net worth = Assets – liabilities – (Equity in primary residence + value of ownership interest in business concern + IRA/401(k) or Other Retirement Accounts subject to a penalty for early withdrawal). Complete our adjusted net worth calculator to help determine yours.
  • The applicant(s) AGI (Adjusted Gross Income) cannot be more than $250,000 averaged over the last three tax years.
  • The applicant(s) cannot have transferred any personal assets during the last two years to an immediate family member for less than fair market value. If they have, the result of the transfer will be counted back towards their adjusted net worth.
  • If the applicant(s) are not a member of one of the SBA’s designated groups they must also be able to submit a narrative statement of social disadvantage that meets the preponderance of evidence standard.
  • The applicant(s) must generally hold all licenses or professional certifications required to operate the business concern. The only exception is if the individual who holds the required license or professional certification is not an equity owner and the applicant(s) can prove that they have ultimate supervisory control over this individual.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot have any delinquent SBA loans, federal (taxes), state (taxes), liens, or local obligations unless they can provide proof of a payment arrangement agreement with the associated party along with copies of timely payments being made. All liens must be satisfied.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot have used their eligibility to qualify another 8(a) concern or be an officer of another current or past 8(a) participant.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot have an immediate family member who is or has been a participant in the 8(a) Program unless this other business was is in a totally separate line of business and no business has been conducted together.
  • The business concern, applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot have filed for bankruptcy in the last 7 years unless the bankruptcy has been discharged by the court.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director should generally not be involved in any pending civil lawsuits.
  • The applicant(s) cannot have any ownership in another business concern other than the business concern that is applying for 8(a) Certification unless it is an LLC solely for the purpose for holding real estate.
  • Any other owner in the business or anyone else who is considered a key officer, employee or director who has ownership interest in any other business, other than the business concern that is applying for 8(a) Certification may possibly cause the SBA to affiliate the associated business.
  • Any other owner in the business or anyone else who is considered a key officer, employee or director who has ownership interest in any other business cannot be the former employer of the applicant(s) for 8(a) Certification.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot be debarred from doing business with the federal government.
  • The applicant(s), any other owner in the business or anyone else who is considered a key officer, employee or director cannot be on probation or parole. If the anyone has been arrested in the past it does not automatically deny them unless they were convicted of a specific crime. Having an arrest, regardless of how long ago, will delay the review of your 8(a) Application by a minimum of 90+ days.
  • The business concern must be considered a small business by the SBA. Your primary NAICS code, gross sales and sometimes the number of employees define your size standard that the SBA will base its size determination on.
  • The business concern must have been in business for two full years. In addition, the last two years of its filed business tax returns must show a reasonable amount of revenues. If it has not, you must seek a waiver and meet the 5 conditions set by the SBA to overcome this condition.
  • The business concern and the applicant cannot have any delinquent tax filings or have any any delinquent SBA loans, federal (taxes), state (taxes), liens, or local obligations unless they can provide proof of a payment arrangement agreement with the associated party along with copies of timely payments being made. All liens must be satisfied.
  • The business concern must be at least 51% directly owned by the applicant(s). The business concern must be a for-profit business and cannot be classified as a broker or be a subsidiary of another business concern.
  • The business concern’s current year-to-date financial statements must exhibit positive net income, positive net equity and positive working capital at the time of application submission.
  • The business concern cannot be earning more than 70% of your total revenue from one (1) commercial billable client in the last 12 calendar months. Your past 3 years of revenue mix must also show that you have not have earned more than 70% of your total revenue from one of your commercial billable clients. Note. The 70% rule does not apply if your direct billable client is a federal, state or local government agency.
  • If the business concern has existing management, joint venture, indemnity, consulting, distributorship, license, trust or franchise agreements, the SBA will want to review these in great detail.
  • If changes of ownership have occurred to the business concern in the past two years, and the current applicant(s) have become the new majority owners, the SBA will want to examine these ownership changes in great detail. This can possibly be an eligibility issue based upon your unique circumstances.
  • If the business has ownership in or an affiliation with another business the SBA will want to examine this in great detail.
  • If another business has ownership in the business concern applying for 8(a) Certification, the SBA will want to examine this in great detail.
  • If the business concern buys from, sells to, or uses the services or facilities of any other business concern, or conduct business with any other business concern in which any other owner in the business or anyone else who is considered a key officer, employee, other than the applicant(s), the SBA will want to examine this in great detail.
  • The business concern applying for 8(a) Certification cannot have been previously approved for the 8(a) program.
  • If any other business concern or anyone who is considered a key officer, employee, other than the applicant(s) provides financial, bonding support, licenses, or required professional certification, office space or equipment to the business concern that is applying for 8(a) Certification, the SBA will want to examine this in great detail.
  • The business concern applying for 8(a) Certification cannot have been started with 50% or more of the assets of a previously certified 8(a) program participant.
  • The business concern must not be subcontracting out more than the allowable percentages. See CFR §125.6   What are the prime contractor’s limitations on subcontracting for the specific percentages.

Please Note. The above are the general 8(a) Program eligibility requirements, There may be more eligibility requirements based upon your unique business circumstances.

Keep in mind that each 8(a) Application is unique and document requirements vary for each 8(a) Application.

Below is a general list of items that will need to be included within your 8(a) application. Your unique application may require additional items not specified below.

  • Signed 1040 personal tax returns (last three filing years) including all schedules, attachments, W-2’s, 1099’s and proof of payment for any tax owed for each 8(a) Applicant and their spouse.
  • Signed business federal tax returns including all schedules and attachments for the last three filing years, or as many as you have been in business, if less than 3 years. Proof of payment for any tax owed may be required, if applicable.
  • Balance Sheet, Income Statement, A/P and A/R aging statements no older than 30 days old for the current year to date. Please note, your financial statements must be prepared either on an income tax basis or be GAAP compliant.
  • Balance Sheet, Income Statement, A/P and A/R aging statements for the last three completed fiscal years.
  • resume for each 8(a) Applicant and any other key officer, employee, director or 10% or more owner.
  • A detailed listing of all clients broken down by revenue earned for the last 12 months and the last three years.
  • A current certificate of good standing (required for Corporations and LLC’s only).
  • Stock certificates/Stock ledger (Corp), Membership Certificates/ledger(LLC).
  • Articles of Incorporation/Organization/Partnership filing/DBA Filing.
  • Foreign Organization Filings and associated Certificates of Good Standing (If applicable).
  • Articles of Conversion/Buy-Sell Agreements, Voting Agreements (if applicable).
  • Bylaws, Operating Agreement or Partnership Agreement.
  • Stockholder/Board or Member Meeting minutes (Most Recent).
  • Proof of US Citizenship (if required).
  • Business bank signature cards.
  • Copies of all business and special licenses.
  • Copies of any business loan agreements.
  • A copy of the current lease agreement for business.
  • A current personal financial statement and supporting statements for  the following: (Checking/Savings, IRAs with terms and conditions, Life Insurance (Cash Surrender only), Stocks/Bonds, Mortgage, Deeds, Fair Market Value for Real Estate, Home Owners Insurance Policy, Any Other Assets (Boats, RV’s, Motorcycle, Other Business Ownership, etc.), Automobile Title/Registration and associated loans, Credit Cards, Home equity or any other Loan Agreements (Student, etc.).

Once your 8(a) Application is submitted to the SBA for review, you will typically receive an email or notification through certify.sba.gov within 1 day to 2 business weeks that identifies your SBA reviewer.

Your SBA reviewer, may at this time, request additional information to answer any questions they have. We will prepare all formal responses to the SBA as part of our Turnkey 8(a) Application Completion Service.

Once the SBA has determined that your 8(a) Application is deemed complete, it will take approximately 90-120 days to be notified of a decision by the SBA.

A business that receives 8(a) Certification has a program term of nine (9) years from the date of approval.

The business must maintain its 8(a) Program eligibility during its time in the program and must inform the SBA of any changes that would adversely affect is eligibility.

A business that completes it 9 year term is deemed to graduate.

The 9 year term may be shortened only by termination, early graduation or voluntary graduation.

If your business has not been in business for at least two (2) full years, with sufficient revenue shown on its filed tax returns for the last 2 years, you can possibly seek a length-of-time in business waiver if you meet the following minimum conditions:

  • A resume that shows that the 8(a) applicant has significant managerial and technical skills needed to operate the firm.

Note. If licenses or certifications are required by the business the Applicant for 8(a) Certification must be the qualifier and provide proof of such license or certification.

  • At least one (1) year of filed company tax returns with generally revenue or $100,000 or more earned in the primary NAICS code in which you are seeking 8(a) Certification for.
  • Proof of multiple completed and ongoing contracts that clearly show operating revenues being earned in the primary NAICS code in which you are seeking 8(a) Certification for.

Note. If your contract revenue earned from inception shows that you have earned more than 70% of your total revenue from one (1) billable client you will not be able to apply for the 8(a) Program due to economic dependence.

Your past and current contract mix must show that you have earned and are earning less than 70% of your total revenue from one of your billable clients.

Note. The 70% rule does not apply if your direct billable client is a Federal Government agency.

  • Copies of all paid invoices to support the operating revenue earned from all billable clients.
  • Copies of all business bank account statements that prove the operating revenue earned has been deposited in the business bank accounts from all billable clients.
  • The business must have, in the bank, working capital to support its ongoing operations for at least three (3) full months for its current monthly burn-rate. A business line of credit in lieu if not enough liquid working capital may suffice.
  • At least two to three reference letters from past and current clients directly addressed to the applicant.

We offer a two year guide and sample waiver if you need assistance in preparing the required waiver.

Economic Dependence is a significant obstacle to the eligibility of many applicants desiring to gain 8(a) Certification for their business. In fact, it is currently the #1 issue for which we have to turn the greatest number of potential 8(a) applicants away, until the issue is resolved.

First, a little history on the Economic Dependence issue, or the 70% rule as we often refer to it. Per the Faison Office Products Office of Hearings and Appeals case in 2007, an applicant can be found to be dependent upon a single non-government entity if that entity constitutes 70% or more of the total revenues.

Businesses frequently start with a single client. The application of this rule, and the time frame for calculating this percentage, makes this an issue that must be examined closely.

If you would like to know if you have economic dependency, please take our online Economic Dependency Questionnaire.

You are also welcome to review the requirements below.

Here are facts on how to determine if you have economic dependency:

  • If you have earned more than 70% of your revenue from one (1) commercial client over the last three (3) years and still have them as a client, economic dependency will be found by the SBA. However, if this is the case for your business, and you have fractured or terminated your relationship with this client, and can show you are no longer dependent on that client anymore you may be able to get 8(a) Certified. How? You must be able to show the SBA that the relationship has ended and that your current mix of clients does not result in 70% economic dependency with any one of your current active clients.
  • If you have earned more than 70% of your revenue from a direct Federal Government Agency, as the prime contractor, over the last three (3) years economic dependency will not be found by the SBA.
  • If your business has not been in operation for three (3) full years, the SBA will look at the totality of the revenues earned from inception to see if 70% economic dependency exists. The same rule applies here too as indicated above.
  • If no past 70% economic dependency existed, the SBA may also look at your current mix of clients to see if one (1) of your current clients is causing economic dependency. This is typically done by looking at your last twelve (12) months of contract mix.
  • Finally, if no past 70%  economic dependency existed but your business only has one (1) commercial client at the time of 8(a) Application submission economic dependency will be found by the SBA.

In the 8(a) Application portal (certify.sba.gov), the SBA only requests for you to provide the last twelve (12) months of revenue breakdown by client. This may make you think they only look at the last twelve (12) months however the SBA can ask for any information they deem necessary to determine your overall 8(a) eligibility.

Don’t be surprised if the SBA analyst comes back and requests a breakdown over the last three (3) years and through the current year to date. To be 100% sure you won’t be found to be economically dependent, you should ensure that none of the above exists before you apply for the 8(a) Program.

Additionally, the risks are greater than merely a denial of your 8(a) Application. If a business is found to be economically dependent upon another entity, and a resulting size determination concludes that they are other than small, that would exclude the business from being recognized as a small business for the purposes of contract awards.

The applicant for 8(a) Certification must have a personal adjusted net worth of less than $250,000 at the time of 8(a) Application submission to be considered economically disadvantaged.

The algorithm used to determine Adjusted Net Worth for 8(a) Certification purposes is:

Adjusted Net Worth = Personal Assets – Personal Liabilities – [Equity in primary residence + value of ownership interest in applicant business + value of any IRA/401(k) or other retirement account that are subject to a penalty for early withdrawal]

If the applicant is married and the asset or liability is jointly held, you split the value 50/50. If the applicant is married and lives in a community property state, you only split assets and liabilities 50/50 if you have a transmutation or pre/post nuptial agreement that states otherwise. The SBA does not take into consideration community property laws when determining economic disadvantage.

How can I determine my Adjusted Worth?

You can easily determine your Adjusted Net Worth by using our Adjusted Net worth calculator.

What is required to be submitted within the 8(a) Application to prove the applicant’s Adjusted Net Worth?

Each Applicant, and their spouse, must submit a separate Personal Financial Statement. Along with the personal financial statement you may also have to  submit statements for each asset or liability supporting the amounts reported on the Personal Financial Statement, if requested by the SBA. The amounts reported on the Personal Financial Statement cannot be any older than 30 days at the time of 8(a) Application submission.

Are there any ways to reduce an applicant’s Adjusted Net Worth below the $250,000 threshold?

Possibly. For more information, contact us.

*Important*

If you have transferred and any assets within two years of the time you apply for 8(a) Certification for less than fair market value the full amount of the asset, at the time of the transfer will re attributed back to the individual towards their Adjusted Net Worth.  However, the SBA will not attribute to an individual claiming disadvantaged status any assets transferred by that individual to an immediate family member that are consistent with the customary recognition of special occasions, such as birthdays, graduations, anniversaries, and retirements.

The SBA will also consider a spouse’s financial situation in determining an individual’s access to credit and capital where the spouse has a role in the business (e.g., an officer, employee or director) or has lent money to, provided credit support to, or guaranteed a loan of the business. This means that both would need to have an Adjusted Net Worth of less than $250,000 to qualify for the 8(a) Program.

The $250,000 Threshold for Adjusted Gross Income (AGI)

Among the many 8(a) business development program eligibility requirements the applicant for 8(a) Certification must have is an average AGI over the past three taxes years of less than $250,000.

What is the definition of Adjusted Gross Income?

Adjusted gross income (AGI) is a tax term for an amount used in the calculation of an individual’s income tax liability. AGI is calculated by taking the applicants gross income and subtracting their maximum allowable adjustments. AGI is located on line 37 on your Form 1040 for 2017 personal taxes and before and on Line 7 for 2018 personal taxes.

How do I determine my Adjusted Gross Income for 8(a) Certification Purposes?

Step 1: The easiest way to initially determine if you exceed the $250,000 threshold, averaged over the last three years is to add up the AGI number reported on the first page of your last three years of federal tax returns.

Please note: If your portion of the applicant firm’s business income is negative or shown as a loss, you cannot deduct this loss from your AGI since losses from an S corporation, LLC or partnership are losses to the company only and are not losses to the individual and cannot be used to reduce your AGI.

If you add these three numbers, divide them by three and result is a number larger than $250,000 you must do further analysis. Go to Step 2.

If the number is less than $250,000 and your distributions taken out the company do not exceed the profits reported for your business on its tax return, your AGI is less than $250,000 without doing any further analysis.

If your distributions exceed the profits reported for your business, you must do further analysis. Go to Step 2.

Step 2: If your resulting calculation shows more than $250,000 or your distributions exceed the profits reported for your business on its tax return, and you are filing the taxes jointly with your spouse, you will then need to separate out the portion of any income reported on the tax return between the applicant and their spouse. See (Line 7 through 21 for 2017 tax returns and before and for 2018 tax returns (Line 1 through 5B + Schedule 1, line 22)

For example: (Line 7 (1040). Wages, salaries, tips, etc. = $100,000 (Applicant’s portion, $40,000 – Spouse’s portion, $60,000). Do the same for each income line as specified above.

Once you have separated out all income reported on the tax return between the applicant and their spouse take the total for the last three years and divide them by three. If the resulting calculation is still larger than $250,000 you must do further analysis. Go to Step 3.

If the number is less than $250,000 and your distributions taken out the company do not exceed the profits reported for your business on its tax return, your AGI is less than $250,000 without doing any further analysis.

Step 3:  There is one final analysis that can be performed to see if you still exceed the $250,000 AGI threshold. If the applicant business concern is an S corporation, LLC or partnership you may:

(Please note: Single Member LLC’s that file a Schedule C cannot use the below in their calculations, per the SBA):

  1. Deduct any income associated with the business that was reinvested into the business concern, less any distributions taken.

Example 1: Your applicant business income shown on the tax return is $100,000. You took $0 in distributions. The result is that $100,000 was reinvested or not distributed therefore the entire $100,000 can be deducted from your AGI calculation.

Example 2: Your applicant business income shown on the tax return is $100,000. You took $50,000 in distributions. The result is that $50,000 was reinvested or not distributed therefore the $50,000 can be deducted from your AGI calculation.

  1. Deduct any income used to pay the LLC or S-Corporation Federal taxes owed on behalf of the income from your LLC or S-Corporation income reported. Please note the SBA does not count or allow any State taxes you may have paid to reduce your AGI. Only Federal taxes paid are allowable to reduce your AGI.

In order to determine what the Federal taxable income tax that you paid on behalf of the business income reported on your tax return you must determine your IRS Income Tax rate.

To determine your IRS Income Tax rate, look at page 2 of your 1040 form (Line 43 – Taxable Income) for 2017 and before. For 2018, look at page 1 of your 1040 form (Line 10 – Taxable income).

Then, click here to visit a site that will show you your tax bracket percentage. Be sure the indicate the tax year, filing status and then lookup your tax bracket percentage based upon your taxable income.

Example: Your applicant business income shown on the tax return is $100,000. Your determined IRS Income Tax rate is 24% therefore you are responsible for $24,000 that would be paid to the IRS on the income from your business reported and the result would be an additional $24,000 that can be deducted from your AGI calculation.

As you can see from above, determining your AGI can be somewhat complex for 8(a) Certification purposes. Cloveer can help you to determine your AGI should you need further assistance. We offer an AGI Analysis Service for $250.00 where we will perform an analysis for the last three years and provide you a detailed report showing you exactly what your AGI is for each year and averaged over the last three years. If you are interested in this service, please request a service agreement or give us a call at 813-333-5800 for more information.

Immediate family member means father, mother, husband, brother, sister, grandfather, grandmother, grandson, grand-daughter, father-in-law, and mother-in-law.

To register for a Dun and Bradstreet profile please visit http://fedgov.dnb.com/webform. There is no fee to register with Dun and Bradstreet.

You should be able to register for this account and receive a DUNS number very quickly through this link. If you register through http://www.dnb.com it will take longer and they will try to sell you other services you may not need.

Your primary NAICS (North American Industry Classification System) code is the six digit code that your business earned its largest segment of revenue in, in the most recently completed fiscal year. The primary NAICS code help the SBA determine what industry you are operating in and if you are classified as a small business.

Visit the US Census Bureau to help determine your primary NAICS code.

The applicant(s) for 8(a) Certification must devote full-time to the business that is applying for the 8(a) Program with no outside employment. This means they must generally work at least 40 hours a week during the normal hours of operation of the business that is applying for the 8(a) Program without any other outside employment.

If the Applicant(s) have an ownership or are an officer, director or partner in any other business, other than the business that is applying for the 8(a) Program, the SBA may very well deny your 8(a) Application.

Why?

As stated above, you must devote full-time during the normal hours of operation of the business. If you have ownership or are an officer, director or partner in another business the SBA will likely conclude that you are not devoting full-time to the applicant business even if you do not devote any hours to the operation of this other business.

How to overcome this potential show-stopper?

  • You can dissolve this other business and provide evidence of dissolution to the SBA during the application review process.
  • You can formally resign your officer, director or partner position in this other business and provide evidence of resignation.
  • You can sell your ownership in this other business. The sale must take place at fair market value and you must be able to provide proof of the sale and a copy of any proceeds you might receive. Be sure to factor in any funds you receive as a result of this sale. You must also resign all positions you held in this other business and provide proof of this resignation.

What if the other business is just a business for holding real estate?

If the other business is just for holding and managing real estate you can most likely keep your ownership in this other business since this other business is solely for the purpose of holding and/or protecting you ownership interest in the properties that it holds.

  • You can also view the latest SBA 8(a) Regulations (CFR: Title 13:Part 124) and read up on the extensive rules and regulations that govern the 8(a) Program.
  • You are welcome to view our blog for more frequently asked questions on the SBA 8(a) Program.

02.

After 8(a) Certification

First, congratulations on getting 8(a) Certified.

Here is what you must do next:

  • You must sign and mail the Participation Agreement and provide it to the office address indicated in your SBA approval letter/email. The SBA will then assign you to an SBA analyst in your local SBA office.
  • Attend the mandatory 8(a) Orientation Meeting, which they will schedule as mentioned within the letter/email received.
  • You must also prepare and submit your 8(a) Business Plan to your local district office, generally within the next 30 days. We suggest you get started on this as soon as possible so you can deliver the business plan to your SBA analyst during your orientation or even sooner if you have a pending 8(a) opportunity.

The federal government is the largest buyer in the world, but how do you know what agency will buy what you sell?

What do government agencies buy and where to locate opportunities?

The federal government buys everything from office supplies to missiles. No matter what your product or services are, chances are there is a federal agency that buys it. But you can’t sell your products or services to the federal government if you don’t know which federal agencies are buying and what their needs are.

Here are some tips for finding 8(a) contract opportunities:

  • The federal government operates an online service called Federal Business Opportunities, known as FBO or FedBizOpps. This single entry, government wide Web site, https://www.fbo.gov, announces available business opportunities and is a powerful tool to help you become successful in government contracting. The site identifies contract opportunities over $25,000.

You can narrow down your search for 8(a) set-aside contract opportunities or set-up an account to automatically receive targeted opportunities via email. We suggest that you specifically look for 8(a) opportunities that are in the pre-solicitation or sources sought phase as most of the other phases are too far along in the procurement process already.

  • Contact each federal agency’s OSDBU (Office of Small Disadvantaged Business Utilization) office. The OSDBU’s ensure that small and disadvantaged businesses are provided maximum practicable opportunity to participate in the agency’s contracting process. The primary responsibility of the OSDBU is to ensure that small businesses are treated fairly and have an opportunity to compete and be selected for a fair amount of the agency’s contracting and subcontracting dollars.Most OSDBU offices also offer the availability of looking at their procurement forecasts, as well as doing business with guides, organization charts with names and phone numbers for points of contact. Each web site should list the Small Business Specialist’s name and telephone number. Contact the Small Business Specialists at targeted installations to request pamphlets, guides, web sites, bidder’s list applications, etc.

Agencies use a variety of means for purchasing items. 8(a) firms should become familiar with how those buying offices advertise these requirements and then monitor them closely. Most government agencies have common purchasing needs. The government can realize economies of scale by centralizing the purchasing of certain types of products or services.

  • Visit the Federal Procurement Data System web site. It contains every federal procurement that has ever taken place. The web site can be found by visiting https://www.fpds.gov.You can search and find out which federal agency is buying your products or services, the names of your competitors who were awarded past contracts, their dollar value, location, NAICS code and more.

Once you have an idea of who you can sell your products and services to, your local Procurement Technical Assistance Centers (PTACs) (http://www.aptac-us.org/) may offer workshops for small businesses to acquire a basic understanding of the federal government procurement process. Some locations also offer services such as matching a firm’s capabilities with federal solicitations advertised in FedBizOpps, information on subcontracting opportunities, one-to-one technical assistance in completing bid packages and other paperwork, etc.

When Will the Agency Buy It Again?

As stated above, most agencies publish procurement forecasts on their web sites. Procurement forecasts are wish lists of proposed contract opportunities that may or may not come to fruition. Procurement history may be more reliable. If they’ve been buying it for years, they may continue to buy it. You may want to try to identify knowledgeable officials at the buying agency and then ask for their opinions. But again, their information may be subject to change. Much of what an agency buys depends on their budget. You should also develop a good rapport with buying agency officials.

One of the most important things that you have to do next is to convince the buying agency that they should buy from you. If the buying agency is using a competitive procurement process, why should it consider using 8(a) procedures? You must show that your business is competent, capable and reasonably priced. Make it in the buying agency’s best interests to contract with you.

If the buying agency is currently using 8(a) procedures, why should it contract with you and not some other 8(a) firm? How will you provide better service, better quality or better prices? What is it that you can do to either solve the buying agency’s problems, or prevent problems from occurring, or provide insight into problem solving more than any other firm? Show them what you bring to the table.

Selling to the federal government is not that much different from selling to the private sector. It all comes down to marketing. Your 8(a) status is a marketing tool that allows you to get your foot in the door at buying agencies, but you must use the tool wisely. Unless you have an unlimited marketing budget and personnel, you will have to decide which and how many agencies to target. Realistically, an 8(a) company can effectively market only three, four, or at most, five agencies. Which agencies you decide to market will depend on the factors discussed above.

While you are in the 8(a) Program, each year, typically within 30 days of your annual 8(a) Certification anniversary date (the month and day you were officially 8(a) Certified), you must submit your 8(a) Annual Review to your assigned SBA analyst.

All 8(a) certified businesses must submit an 8(a) Business Plan within 30 days of being accepted as an 8(a) participant by the SBA. Additionally, your 8(a) Business Plan must be accepted by the SBA prior to receiving or being awarded an 8(a) contract.

The 8(a) Business Plan is a living document that you must adhere to while you are in the 8(a) Program. It may need to be updated on an annual basis.

Your 8(a) Business Plan will outline specific goals of your business that must be attainable while you are in the 8(a) Program since some of your firms 9 year continued eligibility is based upon the plan.

Failure to submit a business plan and have it approved by your SBA analyst within the allotted time-frame can be grounds for early termination.

Additionally, even though you are now officially 8(a) Certified, you cannot be awarded an 8(a) Contract until your 8(a) business plan has been approved by your SBA district office.

The 8(a) Business plan will address all 52 specific elements in the following areas:

  • Executive Summary
  • Business History and Background
  • Business Environment
  • Products and/or Services
  • Present Market
  • Competition
  • Marketing Plan
  • Management and Organization
  • Business Resources
  • Financial Plan/Data
  • Contract Support Targets

For newly certified 8(a) companies, we offer professional assistance in preparing the SBA 8(a) Business Plan or sample 8(a) Business Plans in the area’s of Information Technology, Engineering, Management Consulting, Construction and related trades and Janitorial Services.

We currently offer 5 samples 8(a) Business Plans for sale through our Shop.

Information Technology 8(a) Business plan
Our sample IT 8(a) Business Plan is designed for firms that operate in the in the 5145 (541511, 541512, 541513 or 541519) NAICS code. It contains an actual 8(a) Business Plan for an IT Company. This 8(a) Business Plan has been submitted and accepted by the SBA. Our sample will allow you to see responses to each of the SBA 1010c 52 questions. You can use it to build your own unique business plan.

Purchase Business Plan

Management Consulting 8(a) Business plan
Our sample Management Consulting Business Plan is designed for firms that operate in the 5416 (541611, 541612, 541613, 541614, 541618, 541620, 541690) NAICS code. It contains an actual 8(a) Business Plan for an Management Consulting Company. Our sample will allow you to see responses to each of the SBA 1010c 52 questions. You can use it to build your own unique business plan.

Purchase Business Plan

Construction & Related Trades 8(a) Business Plan
Our sample Construction 8(a) Business Plan is designed for firms that operate in the 236 or 237 (236115, 236116, 236117, 236118, 236210, 236220, 237110, 237120, 237130, 237310 or 237990) NAICS code. It contains an actual 8(a) Business Plan for a Construction Company. Our sample will allow you to see responses to each of the SBA 1010c 52 questions. You can use it to build your own unique business plan.

Purchase Business Plan

Engineering 8(a) Business Plan
Our sample Engineering 8(a) Business Plan is designed for firms that operate in the 5413 (541330) NAICS code. It contains an actual 8(a) Business Plan for a Professional Engineering Company. Our sample will allow you to see responses to each of the SBA 1010c 52 questions. You can use it to build your own unique business plan.

Purchase Business Plan

Janitorial 8(a) Business Plan
Our sample Janitorial 8(a) Business Plan is designed for firms that operate in the 561 (561710, 561720, 561730, 561740 and 561790) NAICS code. It contains an actual 8(a) Business Plan for a Janitorial Company. Our sample will allow you to see responses to each of the SBA 1010c 52 questions. You can use it to build your own unique business plan.

Purchase Business Plan

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