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Minority 8(a)

Updated on December 15, 2012
Gaining minority 8(a) status for one's business is not an easy process and only allowed once in a lifetime. Make sure your business is ready for it.
Gaining minority 8(a) status for one's business is not an easy process and only allowed once in a lifetime. Make sure your business is ready for it.

Minority 8(a)

Minority 8(a) companies have a leg up in the government procurement game. The government gives a number of advantages to SBA certified minority 8(a) companies- like set-asides, no-compete contracts, and procurement quotas. If a business has the possibility to do business with the federal government, then 8(a) certification should be considered.

What Is Minority 8(a)?

The purpose of the program is to assist small businesses in learning the government procurement ropes. Let me also state that the federal government doesn’t have a real minority preference program. That would be opposed to equal opportunity laws. However, the SBA 8(a) program is touted as a socially=economically disadvantaged program. Meaning the primary owner(s) has economic and social disadvantages. The economic disadvantage is proven by showing the financials of the company and providing a net worth statement of the owner(s). The social disadvantage can be proven (in SBA terms "presumed disadvantaged") by the owner(s) being a member by a pre-selected set of ethnic groups- Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans. These two criteria are primary on getting your business certified as an 8(a) company.

The minority 8(a) certification lasts for nine years. During this time the 8(a) company is to show that it is learning to participate in government contracting and also growing its business outside of government business.

Advantages For A Minority 8(a)

The minority 8(a) company has advantages for securing federal government contracts and business. A minority 8(a) can receive sole-source contract awards up to $3 million, which is a very strong advantage, especially for securing repeat business from government departments. Additional advantages include:

  • Teaming arrangements with other 8(a) companies to compete against larger contractors. Or in a similar vein a minority 8(a) can enter into a mentor-protege with a larger company to leverage the minority 8(a)'s status to pursue for contracts.
  • Minority 8(a) status also includes automatic small disadvantaged business status. This will help in doing business with large businesses, those large contractors which need to do a certain amount of business with small businesses to satisfy their federal contractual requirements. Also, federal agencies are required to do a certain amount of business with small business, and they know an 8(a) company will satisfy that requirement.
  • Minority programs on the state and local level often have reciprocal programs for minority 8(a) companies. Meaning that a SBA certified 8(a) already has their minority ownership certified, so another process is not necessary. Other programs will grant a company minority status based upon their federal 8(a) status.
  • 8(a) companies can also acquire government surplus property. The process includes a request through the SBA and working with each individual state's surplus department.

The minority 8(a) certification process is arduous, so it should not be pursued lightly. However, the process will prepare a business to pursue government contracts which is arduous also.

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