Small Disadvantaged Business – Self-Certify or 8(a)?

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Should a Small Disadvantaged Business (SDB) self-certify its status in the System for Award Management? Or is it better to complete the more rigorous requirements for the 8(a) Business Development Program?  Which route should you take?

Given the extra work involved, what advantages does the 8(a) program offer you?  Think carefully before you launch into this decision.

  • Some contracts are specifically set-aside for 8(a) program participants, and exclude those who simply self-certify as a SDB.  Check FedBizOpps for recently posted or awarded contracts or RFPs– how many are 8(a) set-aside?  Would this exclude you from being able to submit a proposal?
  • Remember that a government buyer or contracting officer first wants to know how your company can provide them with a quality product or a first class service, delivered on time and on budget – regardless of your status as a Disadvantaged or 8(a) Program participant.

 

Self Certify in SAM

A SDB must be

  • Small – according to the SBA’s Size Standards
  • Disadvantaged: 51% or more owned and controlled by one or more persons who are both socially and economically disadvantaged, as defined by the Small Business Act (15 USC 637)
  • The disadvantaged person(s) must be a US citizen or permanent resident (Green Card holder)
  • Individuals specifically mentioned include Black, Hispanic, Asian-Pacific, Subcontinent-Asian, and Native Americans
  • Other individuals can claim social disadvantage, and will be considered on a case-by-case basis.

 

At this point, if you believe you are eligible based on these criteria, you can go ahead and self-certify your SDB status in SAM.

 

8(a) Business Development Program

Once you have self-certified as an SDB you may also wish to apply to be a part of the SBA’s  7-year, Business Development Program known as 8(a).  This program combines help with federal contracting and business development.

To qualify for the 8(a) program, in addition to the basic SDB requirements, you’ll need to demonstrate that the person who claims the disadvantage also manages the day-to-day operations, makes long-term decisions about the company, and can show the business has the potential to succeed. You’ll need to be prepared to disclose both personal and corporate financial information, so that the SBA can determine that the person claiming disadvantage has

  • Ownership of the Company: details of stocks or sales agreements; company legal structure; shareholder agreements; full or partial ownership of other companies; names of officers, boards of directors of the company.
  • Control of Day-to-Day Operations and Business Decisions: details of any joint ventures, teaming or shared services agreements; business bank account details
  • Potential for Success: business tax returns; how the company has the potential to be successful; revenue; business, managerial and technical experience; a successful record of contract performance; adequate capital to sustain operations and carry out a business plan; the ability to obtain personnel, facilities and equipment; balance sheets and profit/loss statements; loan documents or business lines of credit; any special licenses your company needs in order to operate; bonding ability;  previous awarded contracts, either government or  commercial
  • Character: any criminal offenses; debarment or suspension; delinquent tax returns or loans; pending lawsuits; bankruptcies in the last 7 years.
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