If you are a small business owner, you may be interested in applying for the 8(a) Business Development (BD) program, a nine-year federal program that helps eligible businesses owned and controlled by socially and economically disadvantaged individuals (as well as small businesses owned by Alaska Native corporations, Community Development Corporations, Indian tribes, and Native Hawaiian organizations) access government contracts, training, and mentoring. The 8(a) BD program is administered by the Small Business Administration (SBA), and it has a competitive application process that requires you to submit various information and documents to prove your eligibility and business potential. In this blog post, we will summarize the main steps and requirements to apply for the 8(a) BD program.
To qualify for the 8(a) program, you must:
- Be considered a small business under the SBA regulations. Use the SBA Size Standards Tool to see if your business qualifies;
- Not previously participated in the 8(a) program.
- Be at least 51% owner and controlled by U.S. Citizens who are socially and economically disadvantaged;
- Have a personal net worth of $850,000 or less (excluding ownership in primary home and value of business);
- Have an adjusted gross income of $400,000 or less;
- Have assets totaling $6.5 million or less;
- Demonstrate the potential for success (such as having been in business for two years); and
- Complete a questionnaire to identify social disadvantage – applicants also have the option to prepare a social disadvantage narrative and upload it.
The first step to apply for the 8(a) BD program is to register your business on the SBA website and complete an electronic application form. The application form will ask you to provide information about your business, such as its products or services, primary industry classification, market potential, competitive environment, strengths and weaknesses, specific business targets, objectives, and goals. You will also need to provide supporting documents, such as financial data, tax returns, bank statements, personal history statements, and any additional information or documents deemed necessary by the SBA. You and each individual claiming disadvantaged status must also authorize the SBA to directly request and receive your tax return information from the Internal Revenue Service.
The second step is to wait for the SBA to process and evaluate your application. The SBA is to inform you within 15 days of receiving your application whether it is complete and suitable for evaluation. The SBA then should process your application within 90 days of receiving a complete application package unless additional information or clarification is requested by the SBA. Please note that numerous applicants have reported delays with SBA certifications.
The SBA will notify you of its decision to approve or decline your application in writing. If your application is declined, you may file an appeal with SBA's Office of Hearings and Appeals (OHA) or reapply for the program after 90 days from the date of the Agency's final decision to decline. If your application is approved, the approval date in the SBA's letter is considered the date of program certification for determining the program term.
The third step is to maintain your eligibility and compliance with the 8(a) BD program requirements throughout your participation. The SBA will determine your eligibility at the time of acceptance of a sole source 8(a) contract and after the apparent successful offeror is identified for a competitive 8(a) contract. You must meet all eligibility criteria, including size standards, compliance with competitive business mix targets, and other 8(a) BD program criteria. You must not have received 8(a) contracts in excess of $168,500,000 during your participation in the 8(a) BD program to be eligible for sole source 8(a) contracts. You must also develop a comprehensive business plan with specific business targets, objectives, and goals and submit it to the SBA servicing office as soon as possible after program admission. You must annually review your business plan with your assigned Business Opportunity Specialist (BOS) and modify the plan as appropriate, submitting a modified plan and updated information to the BOS within 30 days after the close of each program year. You must also annually forecast your needs for contract awards for the next program year, including the aggregate dollar value of 8(a) and non-8(a) contracts, types of contract opportunities, and other information requested by the SBA to provide effective business development assistance.
If you have any questions about the SBA’s 8(a) Business Development Program or the application process, or the appeal process, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.
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