Introduction

The United States Small Business Administration (SBA) administers the section 8(a) Business Development program which is commonly known as the 8(a) BD program.  Sections 7(j) and 8(a) of the Small Business Act (the Act) (15 U.S.C. § 636 (j)   and 15 U.S.C. § 637(a)) authorize SBA to establish a business development program and certify firms as eligible to participate in that program. SBA is responsible for certifying firms as eligible to participate in the program based on criteria established in the Small Business Act and regulations found in title 13, section 124 of the Code of Federal Regulations (13 CFR § 124).

The 8(a) BD program promotes the development of small business concerns owned and controlled by socially and economically disadvantaged individuals so that those concerns can compete in the mainstream of the American economy.

Small business development is accomplished by providing various forms of management, technical, financial and procurement assistance.

Generally, a concern meets the basic requirements for admission to the 8(a) BD program if it is –

• a small business
• unconditionally owned and controlled
• by one or more socially and economically disadvantaged individuals
• who are of good character
• citizens of the United States, and
• which demonstrates potential for success.

By statute, the length of the participation time is limited to nine years and once a concern or disadvantaged individual upon whom eligibility was based has participated in the 8(a) BD program, neither the concern nor that individual will be eligible to participate again.  In other words there is a one-time eligibility restriction.

Firms that participate in the 8(a) BD program benefit from the business development assistance provided by the district offices of SBA located around the country.  The program participants are responsible for maintaining their eligibility and self-marketing their products and services to the Federal government and the private sector.

Because the program is of a limited duration and has a one-time eligibility restriction it is important for firms applying to the program to understand the basic eligibility and reporting requirements for participation.  Once a firm has established its eligibility it is required to maintain that eligibility, which is monitored by SBA on an annual basis.  The following information is designed to assist the applicant in applying to and participating in the 8(a) BD program.

Please answer the following questions to the best of your ability.

Basic Requirements

1. Are you a citizen of the United States?

 Yes            No

2. Do you own a small business? 

 Yes            No

3. Do you know the North American Industrial Classification Code¹ NAICS) for your business?    

 Yes            No

4. Are you familiar with the rules and regulations that govern the SBA size rules, the 8(a) Business Development program and SBA’s Government Contracting programs (13 CFR   Parts 121, 124 and 125)?

 Yes            No

5. Is your business currently listed in the Central Contractor Registry (CCR)?

 Yes            No

6. If so, do you review and update your SBA Profile in the Dynamic Small Business Search (DSBS) and CCR profiles on a regular basis?

 Yes            No

8(a) BD Program Requirements

Ownership and Control

1. Do you own at least 51% of your business?

 Yes            No

2. Are you operating your business full time?

 Yes            No

3. Has your business been operating for more than two years?

 Yes            No

4. Do you hold the highest position in your businesses organization?

 Yes            No

5. Do you compensate yourself?

 Yes            No

6. Do you, your officers and your key employees have a current resumes?

 Yes            No

7. Did you have current financial statements for your business?

 Yes            No

8. Do you have profit and loss statements and a balance sheet?

 Yes            No

9. Have your financial statements been prepared in accordance with generally accepted accounting principles or an accepted cash basis?

 Yes            No

10. Is your firm currently operating with adequate working capital (monthly cash flow exceeds monthly expenses)?

 Yes            No

11. Do you have any lines of credit?

 Yes            No

12. Can you provide copies of all credit line agreements?

 Yes            No

13. Do you believe that you have sufficient lines of credit to finance your firm’s operations?

 Yes            No

14. If you have received a business loan (guaranteed by SBA or obtained elsewhere) is the loan in good standing?

 Yes            No

15. If your firm is in the construction industry, do you have bonding?  (required for you to demonstrate your capacity and capability to perform on contracts)

 Yes            No

16. Do you know if a security clearance or special type of certification is required for your business as it relates to obtaining federal contracts?

 Yes            No

Social Disadvantage

The Small Business Act defines socially disadvantaged individuals are those individuals who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities and the social disadvantage must stem from circumstances beyond their control. 
The following groups of individuals are deemed to be socially disadvantaged:

Black Americans
Hispanic Americans
Native Americans²
Asian Pacific Americans³
Subcontinent Asian Americans⁴ 

Being born in a country does not, by itself, make the birth country an individual's country of origin for purposes of being included within a designated group.

Individuals not members of one of the listed designated groups may establish social disadvantage based on personal experiences of substantial and chronic social disadvantage in American society, not in other countries, which is the result of a distinguishing feature (i.e., race, ethnic origin, gender, physical disability) that has contributed to the social disadvantage.

The social disadvantaged must have a negative impact on your entry into or advancement in the business world because of the disadvantage.  SBA considers education, employment and business history.

1. Are you a member of one of the designated groups described above and do you hold yourself out to be a member of that group?

 Yes            No

2. If you are not a member of a designated group, please identify the basis of discrimination

Race      Ethnic      Origin      Gender      Disability      Other

3. If you are not a member of a designated group but believe you have been subject to discrimination has your experience resulted in a negative impact on entry into or advancement in the business word?

4. Did your experience occur in the course of your education, employment or business history?  Check all those apply and be prepared to provide a detailed narrative statement supporting your claim(s).

Business History     Employment            Education

Economic Disadvantage

Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged. 

For initial 8(a) BD eligibility, the net worth ⁵ of an individual claiming disadvantage must be less than $250,000.

For continued 8(a) BD eligibility after admission to the program, net worth must be less than $750,000.

SBA also determines an individual’s economic disadvantage by comparing the personal income attributable to the individual to IRS statistical data of high income wage earners.

Finally, individuals with total assets (no adjustments) of less than $4 million may be considered economically disadvantaged.

Individuals applying for 8(a) BD certification are required to complete personal financial statements for themselves and their spouse and provided two years of Federal income tax returns.

1. Based on SBA’s definition of economic disadvantaged, do you believe you meet the economic disadvantage thresholds for participation in the 8(a) BD program?

 Yes            No

2. Can you provide personal Federal tax returns for the two most recent periods?

 Yes            No

3. Can you provide complete copies of your firm’s federal business tax returns for the last three years?

 Yes            No

4. Have there been any personal or business bankruptcies?

 Yes            No

5. If so, can you provide information on the current status of this bankruptcy (including any bankruptcy discharge documentation)?

 Yes            No

6. Does your firm or any of its principals have tax liens against them?

 Yes            No

7. If so, can you provide all necessary information regarding these liens?

 Yes            No

Business Development

1. Does your business have a current business plan?

 Yes            No

2. Does your business plan identify your business objectives and goals?

 Yes            No

3. Does your business plan provide a strategy for growth and expansion?

 Yes            No

4. Have you identified your core competencies (i.e., Strengths)?

 Yes            No

5. Have you identified a target market?

 Yes            No

6. Do you know your target market?

 Yes            No

7. Have you developed a marketing plan for your business?

 Yes            No

8. Do you understand the marketing trends unique to your business industry?

 Yes            No

9. Do you have a customer service plan for your business?

 Yes            No

10. Have you considered diversifying in another industry?

 Yes            No

11. Does your business currently operate under more than one NAICS code?

 Yes            No

12. Do you regularly review contract offerings on FedBizOps.gov?  https://www.fbo.gov/

 Yes            No

13. Have you taken any contracting or government procurement classes?

 Yes            No

14. Have you marketed your business products and/or services to a public agency for the purpose of obtaining a contract or subcontract?  

 Yes            No

15. Has your business ever received a contract from a federal or state agency or enterprise?    

 Yes            No

If you are ready to complete an application for 8(a) BD program certification, please click here for a link to the electronic application. Please note that a CCR profile and GLS login
are required to submit an electronic application.