8a Certification From the Perspective of an 8a Business Consultant

8a Certification

The Small Business Administration (SBA) 8a Program is designed to help small economically and socially disadvantaged firms by giving them lucrative government contracts. I would highly recommend looking into getting 8a Certified if your firm qualifies. The process of getting 8a certified is not for every company, it is estimated that of the 9,000 8a Certified firms only 6,000 used their 8a Certification to obtain federal contracts in 2008. An important consideration before you begin the process is what will this certification do for your business. Becoming an 8a Certified company is not just filling out a one time application getting approved and holding a license to get set-a-side contracts from the government for the next 9 years. After certification a business plan must be submitted via form 1010c which is not a typical business plan and a firm must re-register with the SBA on an annual basis. The SBA form 1010c is designed to determine your business goals as well as potential early graduation criteria (graduation ends your 8a designation). During these yearly registrations financial limits on working capital and other financial ratios are also reviewed.

In terms of completing the 8a application even with the use of a consultant a business owner will have a few hours of information gathering time into the application. Our estimate on non-consultant application time is in excess of 150 hours. Once the 8a application is completed 70% of all 8a applications are returned from the SBA for lack of completeness and never reviewed.

8a Opportunities

In 2008 the Federal Government set-a-side $13 Billion Dollars in Federal Procurement for the SBA 8a Program. There are 9,000 companies with 8a Certification in the United States with roughly 1,000 new certified companies receiving their 8a Certification every year. That means on average there is $1.4 – $1.5 Million for each 8a Certified Company and many of these contracts come with 10 year gsa schedules. Another advantage is that 8a Certified companies have a 10% cost advantage over other competing firms, making the contracts potentially more lucrative for 8a firms. These dollars are relatively easy to find for certain types of firms such as construction companies, computer programming companies, food service, janitorial companies, etc. Contracts are more difficult the more specific the NAICS code is in which the firm operates. However the US Federal Government is the largest purchaser of goods and services in the world and have special SDBU Outreach Events designed to help 8a Businesses meet up with potential government clients.

The Application

So you have decided you would like to go ahead with the application process. We get calls all the time from firms that were just told they could have a government contract at an army base if they had their 8a Certification. These firms would like their 8a Application processed immediately so they don’t lose this once in a lifetime opportunity. The 8a process can be quick if you get all of your ducks in a row and don’t have any major issues such as delinquencies on Federal Loans or Federal back taxes and have all of your financial information easily accessible. But the average time for the SBA to process an 8a application without a two year waiver is approximately 3 months. Once the application is completed a form 1010c must be submitted to your local SBA representative and that will take at least two additional weeks (if you have the form 1010c completed in advance of the initial meeting with the SBA rep, usually this takes 2 months).

The Basic Checklist

Socially Disadvantaged

Economically Disadvantaged

Good Moral Standing

Business Leader

Control

Ability to Succeed

Mentoring Program

The SBA allows an 8a certified firm to have a mentor firm help fulfill a large portion of the Federal Contracts that an 8a Certified firm obtains using it’s 8a certification. The SBA will make sure that this arrangement is balanced between the two firms and the arrangement is designed to help the 8a firm grow towards business sustainability. That is a minority owned business that can compete in the general business marketplace without government set-a-side contracts. This can be a great way for smaller 8a Certified approved companies to perform larger Federal Contracts that they would otherwise be unable to perform or feel intimidated due to risk factors involved with obtaining large Federal Contracts. This gains the 8a certified firm valuable experience and knowledge for future growth.

Closing

The SBA 8a Certification Program is a very challenging process. I would recommend for all applicants to obtaining a checklist from a consulting firm because the SBA Business opportunity Specialist assigned to your application will have three inches of paperwork regarding your firm and with backlogs of applications will be unable to spend hours reorganizing your application into the required SBA format. If getting your 8a Certification is mission critical to the future success of your firm I suggest hiring a qualified 8a consultant so that you don’t fall into a pitfall that could hinder your current or future application.

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