August 30, 2021

SBA 8(a) Business Development Program

During the pandemic, many Atlanta businesses became familiar with the COVID-19 relief options offered through the Small Business Administration (SBA). This included the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and the Employee Retention Tax Credit (ERC). As the recovery continues and these programs end, many are looking for new ways to jump-start growth through new business opportunities. While the dynamics have changed, the SBA offers other programs such as the SBA 8(a) Business Development Program which can help qualifying businesses compete for federal contracts. In fact, in 2020 alone, program participants were awarded $34B in federal contracts, including $9.3B in set aside awards and $11.1B in sole-source awards. These numbers reflect the positive financial impact participation can have on a small business. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

What is the Section 8(a) Program?

It is a federally backed assistance program designed to benefit disadvantaged small businesses. Specifically, it is designed to help socially and economically challenged entrepreneurs gain access to increased opportunities for growth and development. The program is designed to help qualifying businesses gain a foothold in government contracting. Participation is limited to nine years and is divided into a four-year developmental stage and a five-year transition stage.

Program Benefits

Securing new government contracts can be a challenging task even for the most seasoned contractors. Therefore, the program offers a variety of benefits designed to build institutional knowledge while immediately opening the door to new business opportunities. In other words, the SBA acts as a liaison with the federal government to secure new contracts. Program benefits include:

• Limited Contract Competition – Participants can compete for both set-aside and sole-source contracts limited to $4M for goods and services, and $6.5M for manufacturing. It is important to note a sole-source contract can be issued without competitive bidding, while a set-aside contract is one that can be filled only by small businesses. To participate in the bidding process, all participants must register with the System for Award Management (SAM).
• Joint Ventures – Recognizing the government’s needs can be quite extensive participants are able to form joint ventures to bid on contracts. This allows firms to perform larger prime contracts and overcome the effects of bundling when two smaller contracts are combined into a single large contract.
• Training & Development – The SBA also provides comprehensive training on marketing, sales, general business strategy and even offers executive/manager coaching.

Program Eligibility

Unfortunately, not all Atlanta businesses are able to participate in the program. Program participation is limited to qualifying SBA small businesses that meet the following:

• Have not previously participated in the 8(a) program
• Be at least 51% owned and controlled by U.S. citizens that are socially or economically disadvantaged.
• Have a personal worth less than $750K, adjusted gross income (AGI) of less than $350K, and less than $6M in total assets.
• Ensure all business owners demonstrate good character.
• Have a track record of success including the ability to complete contracts on time and on budget.

In addition, applicants must also agree to work with the SBA to track progress towards accomplishing program goals. As a result, program participants must also agree to participate in the annual review, business planning, and systemic evaluations as well. 

Program Application

All applications must be submitted electronically using the SBA Certify website. Prior to starting the application, it is important to review the list of required documentation to prepare. This includes interim financial statements, business tax returns, individual tax returns, Certificate of Good Standing, stock certificates, current loan agreements, outstanding lines of credit, and copies of buy/sell agreements. Once submitted it typically takes the SBA up to 90 days to review the application and decide on approval.

Contact Us

The SBA 8(a) Business Development Program provides an important opportunity for qualifying Atlanta businesses looking to drive growth through government contracting. If you have questions about the information outlined above or need assistance with a tax or accounting concern, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.