The document provides information about the SBA's 8(a) Business Development Program. It outlines the program's goals of promoting business development and competitive viability for small businesses owned by socially and economically disadvantaged individuals. Eligibility requirements include demonstrating social and economic disadvantage, meeting size standards, and being at least 51% owned and controlled by disadvantaged individuals. The program offers contracting assistance, training, and other benefits to help participants compete more effectively. Applying firms must submit an application and meet all eligibility criteria.
2. U.S. Small Business Administration
• Financial Assistance
• Business Counseling and Training
• Disaster Assistance
• Government Contracting: Prime Contracting
and Subcontracting
• http://www.sba.gov (National Office)
• http://www.sba.gov/mn (MN District Office)
3. Non-Federal Categories
• CERT Program: St. Paul, Ramsey County, Hennepin County. (651) 266-8900.
Http://www.govcontracts.org
• DBE Program: Federally Funded Transportation – MN/DoT, MET Council, MAC, City
of Minneapolis. Http://www.dot.state.mn.us/eeocm.index.html. (651) 366-3329
MN/DoT, (612) 349-7463 (MET Council), (612) 726-8100 (MAC) or (612) 673-3076
(City of Minneapolis)
• Targeted Vendor: State of Minnesota. Helpline (651) 296-2600.
http://www.mmd.admin.state.mn.us
• North Central Minority Supplier Development Council (NCMSDC). Corporate
Certificate of MBE-Minority Business Enterprise. (612) 465-8883
• Women’s Business Enterprise National Council (WBENC). Certification as women
owned. (612) 259-6584. http://www.wbenc.org
4. Federal Small Business Categories
• Small Business (Self Certify)
• Small Disadvantaged Business (Self Certify – includes
8(a) BD (SBA Certified)
• HUBZone Small Business (SBA Certified)
• Woman-Owned Small Business (Self Certify)
– Registration at WOSB Repository.
• Veteran-Owned and Service Disabled Veteran-Owned
Small Business (VA Certified)
– Registration at Vetbiz.gov required for VA.
5. Primary Resource for All of These
Programs
• SADBOC website:
http://www.minnesota.
feb.gov/index.php/coun
cils/sadboc
• 2014 SADBOC
Government
Procurement Fair,
4/30/14: Earle Brown
Heritage Center,
Brooklyn Center, MN,
Exhibitors Hall, SBA
Exhibit Booth
6. What We’ll be Talking About
• Overview of 8(a) BD Program
• Eligibility Requirements
• Benefits of the Program
• What is Expected of Participants
• Applying to the Program
7. What is the 8(a) Business
Development Program?
• “to promote the business development of
small businesses owned by socially and
economically disadvantaged individuals…”
access to procurement marketplace.
• “to promote the competitive viability of such
concerns…”
• 8(a) Business Development Program
regulations are located on www.sba.gov.
8. Social Disadvantage – Designated
Groups
Individuals are presumed to be socially disadvantaged if they are
a U.S. Citizen and a member of one of the following groups:
1) Black Americans
2) Asian Pacific American
3) Hispanic American (includes individuals of Spanish and
Portuguese descent)
4) Native American
5) Subcontinent Asian American
9. Social Disadvantage – Non-
Designated Groups
Non-minority women, disabled, other individuals that
believe they have encountered discrimination may
claim to be socially disadvantaged.
1) Must demonstrate individual social
disadvantage.
2) Education, employment, business history
3) Preponderance of the evidence
10. Economic Disadvantage Eligibility –
Applicants Must Demonstrate:
• Adjusted Net Worth may not exceed $250,000 for initial eligibility;
$750,000 for continuing eligibility.
• Personal Income must not exceed $250,000 (3-yr. average); $350,000 for
continuing eligibility.
• Total Assets must not exceed $4M for initial eligibility; $6M for continuing
eligibility (allows for growth during the 9-year program participation).
Net Worth
Less Equity in Primary Residence
Less Equity in Business
Equals Adjusted Net Worth
Applicant must also describe economic disadvantage in a narrative statement.
11. What are the 8(a) Participant
Requirements?
• Must be a small business concern with a potential for
success demonstrated by two years in business.
– Independently owned and operated, organized for profit,
and not dominant in its field.
– Must be unconditionally owned and controlled by one or
more socially and economically disadvantaged individuals
who are of good character and an U.S. Citizen.
• Social Disadvantage – Refers to individuals who (beyond their
control) have been subjected to racial or ethnic prejudice or
cultural bias because of their group membership identity without
regard to individual qualities.
• Economic Disadvantage – Refers to socially disadvantaged
individuals with an impaired ability to compete in the free
enterprise system, because of diminished capital and credit
opportunities.
12. Eligibility Criteria – Size Standards
• Based on North American Industrial
Classification system codes – NAICs
• Codes and corresponding size standards at
www.sba.gov/size
• Manufacturing and wholesaling – One-year
average number of employees
• Service Industries – Three-year average
revenues
• Self-Certification
13. Eligibility Criteria - Ownership
• At least 51% unconditional ownership by the
disadvantaged person(s)
• Partnerships – Agreements must reflect
unconditional ownership
• Limited Liability Company – Disadvantaged
individuals must own at least 51% of each
class of member interest.
14. Eligibility Criteria - Ownership
• Corporations
– Disadvantaged persons must own at least 51% of
each class of voting stock and at least 51% of all
outstanding stock.
– Stock option plans for non-disadvantaged
individuals will be viewed as if they have been
exercised.
15. Eligibility Criteria – Good Character
What shows lack of good character?
1) Adverse information regarding possible criminal conduct by
the applicant or its principals.
2) Violations of any SBA regulations.
3) Debarred or suspended individuals or firms.
4) Applicant firms and principals that lack business integrity as
shown by an indictment, guilty plea or civil judgment.
5) Any principal who is incarcerated or on parole or probation.
6) Evidence that the firm knowingly submitted false
information during the application process.
7) Any firm or any of its principals that fail to pay financial
obligations to the Federal Government.
16. Eligibility Criteria – Control and
Management
• Partnerships: Agreements must reflect unconditional
management by disadvantaged partner(s).
• Limited Liability Company: One or more disadvantaged
individuals must serve as management members with
unconditional control.
• Corporations: One or more disadvantaged directors
must be able to control the board and establish a
quorum without the presence of non-disadvantaged
directors.
– No super majority
17. Eligibility Criteria – What Constitutes
Control?
• The Disadvantaged Individual must:
– Hold the position of President or Chief Executive
Officer, Managing Partner or LLC Managing Member
– Devote full-time to the business during normal
business hours
– Be the highest compensated individual
– Have the ability to hire and fire
– Set Policies
– Have the ability to commit firm to the contracts
– Have the ability to control the budget and financial
disbursement
18. Eligibility Criteria – Potential for
Success
• Factors Considered:
– Must be in business in its primary NAICs code for at least
two full years immediately prior to the date of its 8(a)
application
– Proof of two years operation in the firm’s primary industry
as verified by revenues reported in business tax returns
– Financial capability: sufficient capital, financial
performance, bonding capacity, and manageable debts
– Managerial and Technical capability: performance on
previous contracts, firm has the necessary personnel,
licenses, facilities, and prior experience
19. Eligibility Criteria – Waiver of the Two
Year Rule
• SBA may waive the two-year rule if:
– The individual or individuals upon whom eligibility is
to be based have substantial and demonstrated
business management experience
– The applicant has demonstrated technical expertise
and has adequate capital to carry out its business plan
with a substantial likelihood for success if admitted to
the 8(a) Business Development Program
– The applicant has successfully performed on
government or non-government contracts
20. Eligibility Criteria
• One Time Eligibility
– Each person can only participate once in the 8(a)
BD Program
– Each business can only participate once in the 8(a)
BD Program
21. Assistance Available to BD
Participants
• 8 (a) BD Contracting
• 8(a) BD Mentor Protégé Program
• Training – 7(j) and other community events
• Introductions to procuring agencies and prime
contractors
• Surplus Property Program
22. 8(a) BD Contracting
• 8(a) Sole Source
– Requirement offered to SBA
– Contract price, including options, is $6.5M or less
for manufacturing NAICs codes
– Contract price, including options, $4M or less for
all other contracts
– Contract is negotiated with one 8(a) Business
Development participant
– Contractor must comply with Limitations on
Subcontracting Clause
23. 8(a) BD Contracting
• 8(a) Competition
– Requirement offered to SBA
– Competition limited only to 8(a) participants
– In construction, competition may be limited
geographically
– SBA confirms eligibility determination of
successful 8(a) participant
– Contractor must comply with Limitations on
Subcontracting Clause
24. 8(a) Mentor Protégé Program
• Written Agreement: a) Sets forth participants
needs and is tied to a business plan. b) Mentor
promises specific assistance to meet needs
• Agreement approved in SBA HQ
• 8(a) participant (Protégé) and approved Mentor
can Joint Venture (JV) on federal contract and JV
entity can be considered small (even if mentor is
large)
• Agreement is reviewed annually by SBA as part of
8(a) Annual Review reporting requirement.
25. What’s Expected of 8(a) BD
Participants
• Participants Must:
– Upon acceptance into the 8(a) BD Program
complete an 8(a) business plan
– Prepare and submit an annual review package
every year
– Provide annual financial statements to SBA
– Report any change in ownership and control to
SBA prior to the change
26. What’s Expected of 8(a) BD
Participants
• Participants are strongly encouraged to:
– Market to Federal Agencies
– Attend all SBA-sponsored training and networking
events
– Become familiar with 8(a) Business Development
Program requirements found in 13 CFR 124
27. Applying to the 8(a) BD Program
• Online application available at www.sba.gov/8abd
• Application is accessed after going through the 8(a) BD suitability
tool
• Must be registered in Systems Award Management – S.A.M.-
sam.gov
– Central Contract Registry (CCR)/Dynamic Small Business Search (DSBS)
– Online Representations & Certifications Application (ORCA) and,
Excluded Parties List System (EPLS).
• Be sure to provide all of the requested information
• Applications are processed by SBA’s Division of Program
Certification & Eligibility (DPCE) in San Francisco for Region V
(Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin).
28. Application Processing
• DPCE reviews application for completeness and advises
firm of deficiencies within 15 days.
• If incomplete, applicant submits corrections within 15
days and a determination of completeness is made by
DPCE within 10 days of receipt of a firm’s response.
• Applicant advised of outcome by the Associate
Administrator within 90 days from the date completed
application was accepted.
• If declined, applicant advised of right to request
reconsideration within 45 days of decline date.
• If declined after reconsideration, there is a mandatory
12-month waiting period before firm may reapply.
29. Local SBA Contact Information
• SBA Minnesota District Office
Randall Czaia (612) 370-2314
randall.czaia@sba.gov
www.sba.gov/mn
Katherine Roth (612) 370-2320
Katherine.Roth@sba.gov
www.sba.gov/mn
