NEWS: 8(a) Program Focus to Shift from Eligibility to Business Development
The SBA 8(a) Program is the “official” socially and economically disadvantaged small business certification. The program allows small disadvantaged businesses to more effectively compete in federal contracting and receive sole-source contracts.
While becoming certified can be tedious and time-consuming, it is designed to come with rewards. A recent investigation of the program’s efficacy has brought quite a to-do list for the SBA.
On February 14, 2022, the SBA’s Office of Inspector General (OIG) released details of their findings regarding the management of the 8(a) Program by the Small Business Administration (SBA) in the report, SBA’s Business Development Assistance to 8(a) Program Participants. To keep it simple, we will summarize for you.
The objective of this report was to determine to what extent SBA measures and monitors an 8(a) certified company’s progress toward achieving individual business development goals. The objective was also to ensure 8(a) certified companies receive the help needed to meet their goals and if the program adapted during the COVID-19 pandemic.
The primary findings were there was no mechanism in place to ensure that the SBA consistently reviewed business plans and goals and then objectively monitor business development progress to determine the ultimate success of the program. The current state of the program is to monitor the businesses for program eligibility rather than progression of their business development.
The OIG reviewed 40 companies in the program to assess their business development efforts. Over one-third of the companies did not have an approved business plan, which deemed them ineligible for contract awards.
The SBA agreed with most of the findings and plans to assess the staffing and resources allocated for its offices to consistently provide better business development assistance and improve the 8(a) program participants’ customer experience.
For reference, here are the findings summarized:
- SBA must improve processes for monitoring 8(a) participant goal achievements and for measuring impact:
- Procedures needed to better monitor business development
- SBA needs to align performance measures to assess program impact
- SBA needs to improve program data collection to meet reporting requirements
- SBA should improve its business development efforts to help firms succeed:
- SBA needs improved procedures for providing business development assistance
- SBA needs to balance staff resources
- SBA offered program flexibilities to assist small firms during the pandemic:
- SBA adapted business development assistance
- SBA introduced program flexibilities for 8(a) participants
- Majority of 8(a) firms received COVID-19 relief financial assistance
For a successful graduation from the 8(a) program, the SBA should be able to recognize the participating company has substantially achieved its goals, thereby demonstrating its ability in business development, and competing for contract awards. This is different definition than simply completing the 9-year program term.
Currently the SBA’s practice is at odds with the 8(a) program’s statute definition of graduation, as the successful completion of the program instead of the completion of the term. However, the SBA continues to work toward addressing the issues pointed out in the report.
As of August 2021, SBA reported 4,906 firms participating in the 8(a) program. In fiscal year 2020, the federal government awarded approximately $34 billion in contracts to 8(a) certified companies, including $11 billion in sole-source awards.
