The 8(a) Business Development Program is a business assistance program for small disadvantaged businesses. The 8(a) Program offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals. Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.
8(a) firms also can form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract.
To enroll in this program, your business must meet these eligibility requirements:
- The business must be majority-owned (51 percent or more) by one or more individual(s).
- The individual(s) must be an American citizen, by birth or naturalization.
- The business must be majority-owned (51 percent or more) and controlled/managed by socially and economically disadvantaged individual(s).
- The individual(s) controlling and managing the firm on a full-time basis must meet the SBA requirement for disadvantage, by proving both social disadvantage and economic disadvantage.
- The business must be a small business.
- The business must demonstrate potential for success.
- The principals must show good character.
Separate eligibility requirements exist for a business that American Indians, Native Alaskans, Native Hawaiians, and/or Certified Development Companies own.
Before SBA can approve an 8(a) Business Develop program application, the disadvantaged individual(s) also must show (prove) how he or she is socially disadvantaged. To prove social disadvantage, the individual(s) owners must ultimately show that such personal experiences had a negative impact on entry into or advancement in the business world.
Under federal law, socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identification as members of groups without regard to their individual qualities.
According to the SBA, for purposes of the 8(a) Business Development program, the following individuals are presumed socially disadvantaged (called “presumed groups”):
- Black Americans
- Hispanic Americans
- Native Americans
- Asian Pacific Americans
- Subcontinent Asian American
In the absence of evidence to the contrary, an individual applicant is presumed socially disadvantaged if:
- He or she holds him or herself out to be a member of a presumed group
- He or she is currently identified by others as a member of a presumed group
An individual who is not a member of one of the “presumed groups” can be admitted into the 8(a) Business Development program. The business must prove to the SBA that the individual(s) meeting SBA’s ownership and control requirements is/are socially disadvantaged. The individual(s) must show personal experiences where applicable in education, employment, and business history. The individual must also provide evidence to SBA proving one’s individual social disadvantage.