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8a Company

Updated on November 29, 2012
The SBA 8(a) is the pinnacle designation for minority owned companies to get contracts from the federal government and others.
The SBA 8(a) is the pinnacle designation for minority owned companies to get contracts from the federal government and others.

8(a) Company Benefits

There are many benefits to running an 8(a) company. Obviously, with the 8a program being a SBA designation, the primary benefit is for federal contracts. However, there are plenty of tremendous benefits that are derived from the 8(a) program.

Federal Contracts

Selling to federal contractors can be easier for an 8a company. Indeed, lightning does strike and there are purchasing officers who will buy from you simply because you’re an SBA 8(a) company. Once heard from a GSA official that exact story, a lady who’s business is office supplies received her 8(a) certification and began to make a lot of money just because in the CCR vendor database she had her 8(a) certification, HUBZone certification, and was designated as being woman owned business. This is the exception and not the rule.

The reality is that even with 8(a) certification an 8(a) company will need to work at acquiring sales and contracts. Certification is only another arrow in the quiver. Once one learns to wield their certification, is can become an formidable sales asset. 8(a) companies can be contracted without competition for contracts under $3 million dollars and some contracts can be designated 8(a) set-asides, meaning only 8(a) companies can compete for those contracts. Once contracting officers see the value of keeping incumbent 8(a) companies (see my hub on the Definition of Procurement), there will be no better ally for your company. Those contracting officers will do what they can to work with you, and will begin to utilize your 8(a) status for you.

Other Governmental Minority Programs

Getting your certification as an 8(a) company is a slow and convoluted process, but most who set out make it eventually. The same can be said for other minority certifications outside of the federal government, like state and local governments. They often want the same paperwork and assurances that your company is truly minority owned and not just a shell company. They have their own minority assistance programs which can help you acquire contracts and sales with them. The benefit to having 8(a) certification is that these programs often take having 8(a) status in lieu of having to go through a more formal vetting process. This substitution makes your state or local certification much easier and quicker to acquire.

Government Prime Contractors

Prime government contractors also have small and disadvantaged business requirements also. They are on the lookout for 8(a) companies to do business with or to subcontract with. Sometimes as part of their governmental contracts they set-aside a portion of the contract just for small businesses. This can be your “in with” with the large contractor. Also, just like a federal contracting officer, prime contractors also like to continue to do business with 8(a) companies that they know and have utilized before. The upside is that they have little incentive to compete contracts, and can meet their requirements by just giving your company a subcontract. But these tidy arrangements only happen after they know your company and it has proven itself. However, your 8(a) certification can be your foot in the door.

Corporate Diversity

Large public corporations will have a diversity program and an 8(a) company will have a leg up. The company’s certification will authenticate a company as being minority owned. This will allow the corporate diversity personnel to give you all the access that they can.

Realize that the corporate diversity department will not have anything canned for you, but what they do have is access to all their departments. It will be up you to work all leads and make it happen. There are times when departments within the corporation will inquire about possible businesses to do work with and guess who the diversity personnel will recommend? The businesses they are most familiar with, those that that have been actively working within the corporation.

Minority Owned B2B

Utilizing the SBA database one can find a number of registered businesses. Searchable by company size, age, location, industry code, and any number of other variables the database can produce a list of businesses. This list is often utilized by other minority businesses to find a company for a service or product. This is the golden rule at work, if a minority company wants business as a minority business, they need to give other minority business work.

Also, the SBA database can bring opportunities from companies that would like to utilize an 8(a) company for a teaming or joint venture arrangement. There are times the government may approach an 8(a) company to utilize another businesses for a contract where all parties win. The government gets what it wants, the utilized business gets the work, and your business just got money for doing little work or prospecting.

Small Business Resources For Government Contracts

Minority Business Success: Refocusing on the American Dream
Minority Business Success: Refocusing on the American Dream

Finally, someone who knows has written the book on minority business. Leonard Greenhalgh is a professor from Dartmouth who has been instrumental in working with the US Department of Commerce's Minority Business Development Agency.



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