In 2014, the the U.S. federal government spent over $14 billion on contracting. The Small Business Administration (SBA) is charged with the task of seeing that small businesses get their fare share of these contracting dollars. One of the tools at their disposal to accomplish this is the SBA’s 8(a) contractor program. Named for the section of the Small Business Act, this program is designed to help small, disadvantaged businesses complete for federal contracts. Many types of contracting are available in the program, supply, various service as well as construction. A portion of all federal contracting is set aside for contractors in the 8a program.
Participation in the program is split between two phases over nine years. These are a four year developmental range and a five year transition period. The purpose is that after 9 years a graduated 8(a) firm is capable to compete on its own. There is no longer a need for a protected market.
The specific requirements to become an 8a contractor are vetted by the SBA. The application process can take a long time. It is not uncommon for the application to be returned with questions several times throughout the process. The Small Business Administration’s requirements include:
There different eligibility requirements for business that are owned by American Indians, Native Alaskans, Native Hawaiians or Certified Development Companies.
If 8a contractor is going to pursue construction, the rules of the Miller Act will apply. As such, the contractor will need to secure bid, performance and payment bonds to compete on federal construction projects. A construction contractor, even if not in the 8a, can access the SBA bond guarantee program. The basic principals of bonding apply to 8a contractors. The three tenets of bonding, capital, capacity and character will apply. Capital; does the contractor have the financial strength to complete the contract? Capacity; does the contractor have the experience necessary to complete the project? Character; does the contractor have a track record of showing good character. This means paying bills on time, good personal references and shown to be an honest person.
To get started with the bonding process, visit Surety1’s performance and payment bond page.
The 8a is one of the SBA’s most successful programs. thousands of contractors have graduated form the program with a firm understanding of what is required to be a successful 8a contractor.