Did you know that the Small Business Administration's (SBA) 8(a) Business Development Program was created to help small, disadvantaged, minority-owned businesses compete and work with the federal government? The 8(a) program offers excellent contract opportunities to small, disadvantaged companies.
During the nine-year 8 (a) program, participants can be awarded sole-source contracts up to $4.5 million for goods and services and $7 million for manufacturing and compete in larger 8(a) set-aside contracts.
Companies certified as 8(a) can also participate in the SBA's Mentor-Protégé program. Additionally, they can form Joint Ventures with larger contractors to compete for 8(a) and other competitive contracts.
8(a) Program Qualifications and Certification Requirements
The 8(a) certification requires participation approval, annual compliance, and reporting. To qualify for the program, a company must be owned and controlled by at least 51% of socially and economically disadvantaged United States citizens. The personal net requirement is less than $850K, excluding certain assets. The average adjusted gross income must be $400K or less, and the total assets must be $6.5 million or less.
During the nine-year program, 8(a) contractors must demonstrate progress. The first four months are considered the development stage. Advancement must also be displayed during years 5-9, the transitional stage. The 8(a) contractor must show progression from sole-source awards and 8(a) competitive contracts transitioning to non-8a revenue. 8(a) contractors must also comply with small business size requirements to maintain eligibility for contract awards.
How to Apply for the 8(a) Program?
You must meticulously plan and prepare your SBA 8(a) application to gain approval. Follow 8(a) certification checklists to ensure your documents meet the program requirements in fact and appearance.
In addition to completing the online application, you must submit the following documents:
1. Prior income tax returns
2. Financial statements
3. Your company history
4. Personal financial statements
How to Apply for SBA Certification?
The company owner may complete the application on the SBA website. However, you may also benefit from financial advice. Your accountant or CPA can help you review your documents before submission.
The SBA Yearly Reporting and Compliance Requirements
The SBA monitors progress through annual reviews, business planning, and regular evaluations.
The 8(a) participants must submit the Form 1450-8(a) Annual Update Review. Based on the 8(a)'s annual program year, businesses must disclose specific company data to remain in the program, including:
1. Progress on meeting goals
2. Personal yearly financial statements, including your net worth
3. The fair market value of all assets
4. Personal income
5. Excessive withdrawal limitations
In addition, company financial statements are required. 8(a) participants who make over $10 million in revenue must submit an annual audited financial statement within 120 days of the company's fiscal year.
The 8(a) participants with revenue between $2M and $10M must submit annual reviewed financial statements within 90 days of the company's fiscal year. Finally, 8(a) participants with less than $2M in revenue must provide an annual in-house or compiled financial statement within 90 days after the close of the company's fiscal year.
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