8(a) Firm: Meaning, Purpose, Qualifications

What is an 8(a) firm?

An 8(a) firm is a small business owned and controlled by socially and economically disadvantaged individuals and accepted into the Small Business Administration’s (SBA) 8(a) Business Development Program. The program helps eligible entrepreneurs gain access to government contracting and provides training, mentoring, and other assistance to promote business growth and competitiveness.

Purpose of the 8(a) Business Development Program

The program’s goals are to:
* Expand participation of disadvantaged entrepreneurs in federal contracting.
* Provide business development assistance (mentoring, training, management and technical help, and access to capital).
* Allow eligible firms to obtain set-aside and sole-source contracts and to form mentor-protégé joint ventures with established companies.

Key benefits

• Access to federal contracting opportunities, including sole-source awards.
• Business development assistance: mentoring, procurement help, training, and financial/technical support.
• Ability to form mentor-protégé relationships and joint ventures to pursue larger contracts.

Who qualifies

To be admitted to the 8(a) program (rules effective July 15, 2020), a business must meet these core requirements:
* Be a small business under SBA size standards.
* Not have previously participated in the 8(a) program.
* Be at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged.
* Owner’s personal net worth ≤ $750,000.
* Owner’s average adjusted gross income ≤ $350,000.
* Owner’s total assets ≤ $6 million.
* Owner must be of good character.
* The business must demonstrate potential for success and the ability to perform on contracts.

Social disadvantage may be presumed for certain groups (for example, Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans). Individuals outside those groups can qualify by documenting specific evidence of social disadvantage. Title 13 CFR Part 124 defines program eligibility and the criteria for social and economic disadvantage.

Contracting limits

8(a) firms can receive sole-source contracts up to specified ceilings:
* Up to $4 million for goods and services.
* Up to $6.5 million for manufacturing.

How to apply

1. Complete the SBA’s 8(a) suitability self-evaluation and online training to assess eligibility.
2. Register or maintain a profile at SAM.gov (required to do business with the federal government).
3. Apply for certification at certify.sba.gov.
4. If accepted, the SBA issues a notification letter and the firm enters the program.

Contact your local SBA office for application assistance or questions.

Program term and oversight

• Certification lasts up to nine years: the first four years are the developmental phase; the final five years are the transition phase.
• 8(a) participants undergo annual reviews, prepare business plans, and are subject to evaluations to maintain good standing.

Conclusion

The SBA 8(a) program provides a structured path for socially and economically disadvantaged small-business owners to compete for federal contracts and build business capacity through training, mentoring, and contracting advantages. For detailed rules and guidance, consult the SBA’s 8(a) Business Development Program materials and 13 CFR Part 124.