The 8(a) Certification Program is administered by the Small Business Administration (SBA) and is designed to help businesses which are both socially and economically advantaged obtain federal contracts. There is also the additional requirement that the firm must have the potential to successfully complete federal contracts, and with all federal certifications/verifications the firm must be free of control issues, meaning another cannot elicit control over the owner.
There are currently approximately 6,500 firms with the 8(a) certification and the federal government spends on average $34 billion annually with 8(a) firms. The average 8(a) firm does over $4 million in federal sales per year. The target for 8(a) firms is 5% of federal spending.
A firm that obtains the 8(a) certification is only in the program for a period of 9 years. After that the firm is said to have graduated from the program and is no longer eligible to be awarded 8(a) contracts.
The SBA has two offices that review and approve 8(a) applications. The Eastern half of the United States is serviced by King of Prussia which is a suburb of Philadelphia, and the Western half of the United States is serviced by an office which is located in San Francisco.
The process for submitting an 8(a) application consists of both an online portion as well as a written portion. The normal breadth of the written portion of an 8(a) application is between 300-500 pages. This contains documents pertaining to the individual’s applicant’s background, financial status, as well as formation documents and financial information for the business.
Firms that are participating in the 8(a) program can receive sole-source contracts up to $4 million for goods and services and $6.5 million for manufacturing.
The normal timeframe for obtaining an 8(a) certification is approximately 90-120 days from the date the application was submitted. Additional time is typically required when a firm is attempting to gain access to the 8(a) program before it has been in business for two years or if the owner of the firm has a felony in their background as the additional step of a FBI background check is then employed.
Our process for assisting a firm with the completion of its 8(a) application begins with a two (2) hour phone conference with the majority business owner(s) of the applying firm. This is done to first perform a detailed assessment of the business and its likelihood to achieving certification. During this call application strategies are developed, potential application issues are shared and the prospective client is provided an accurate assessment of their likelihood of obtaining the 8(a) certification. If moving forward with an application is not recommended by our firm we will work with the firm to develop a potential remedy plan and discuss it with the applicant firm’s principles.
The time to prepare and assemble the 8a application varies by client, but most applications take between one month to one month and a half to complete. The SBA is usually able to award on a well-structured application within 3-4 months.
Some areas that require the most attention to detail include: