How Can SBA Certification Help You?
The United States Federal government is the largest purchaser of products and services in the world, with companies of all sizes included within its vendor lists. It’s easier than you may realize for small businesses to compete for — and win — a share of the $450 billion in annual government contracts.
The Small Business Administration (SBA) was formed in 1953 with the mandate to assist small businesses in working with federal contracting, with the ultimate goal of awarding 23% of all contracts to small businesses. The SBA recognizes that small businesses are the lifeblood of the American economy, and government contracting is a great way for them to grow and develop.
To that end, the SBA provides outreach programs, matchmaking events, and online training opportunities, and many other programs designed to help small businesses identify and pursue contracting opportunities. In addition, the federal government has lucrative “set aside” programs: contracts exclusively awarded to certified small businesses.
How Can SBA Certification Help You?
To qualify for government contracts, small businesses must prove to the contracting agency that they are ready, willing, and most importantly, able to perform on government contracts by obtaining the necessary certification. It’s not an easy process, but there are a variety of certifications that small business can apply for and obtain:
8(a) Business Development Program
The 8(a) certification is a highly sought after nine-year business development program established to assist socially and economically disadvantaged individuals grow their businesses through counseling, training, workshops, business matchmaking opportunities, mentoring, and other guidance.
This certification is for small businesses located in distressed urban and rural communities, designed to boost business activity in those areas.
VOSB / SDVOSB Veteran-Owned Small Business / Service-Disabled Veteran-Owned Small Business Program
Specifically for veterans,including those disabled through their service.
In order to help small, disadvantaged businesses compete in the marketplace, the SBA created the 8(a) Business Development Program.
What is the 8(a) Business Development Program?
- 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.
- The 8(a) Program is an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.
- Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition
Benefits of the Program
- Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $7.0 million for manufacturing. While we help 8(a) firms build their competitive and institutional know-how, we also encourage you to participate in competitive acquisitions.
- 8(a) firms are also able to 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. SBA 8(a) firms are also eligible for access to the Mentor-Protégé Program, allowing inexperienced 8(a) companies to learn the ropes from other more experienced businesses.
Requirements and Goals of the 8(a) Business Development Program
The overall program goal is to graduate 8(a) firms that will go on to thrive in a competitive business environment. There are some requirements in place to help achieve this goal. Program goals require 8(a) firms to:
- Maintain a balance between their commercial and government business.
- Limit on the total dollar value of sole-source contracts that an individual participant can receive while in the program: $100 million or five times the value of its primary NAICS code.
- To make sure 8(a) firms are on track to accomplish their goals and are following requirements, the SBA district offices monitor and measure the progress of participants through:
- Annual reviews
- Business planning
- Systematic evaluations
HUB Zone Certification
Understanding the HUBZone Program
The Historically Underutilized Business Zones (HUBZone) program was enacted into law as part of the Small Business Reauthorization Program of 1997.The program encourages economic development in historically underutilized business zones – “HUBZones” – through the establishment of preferences.
SBA’s HUBZone program is in line with the efforts of both the Administration and Congress to promote economic development and employment growth in distressed areas by providing access to more federal contracting opportunities.
How the HUBZone Program Works
The SBA regulates and implements the HUBZone program. SBA does the following:
- Determines which businesses are eligible to receive HUBZone contracts.
- Maintains a listing of qualified HUBZone small businesses thatfederal agencies can use to locate vendors.
- Adjudicates protests of eligibility to receive HUBZone contracts.
- Reports to the Congress on the program’s impact on employment and investment in HUBZone areas.
Benefits of the HUBZone Program
The program’s benefits for HUBZone-certified companies include:
- Competitive and sole source contracting
- 10% price evaluation preference in full and open contract competitions, as well as subcontracting opportunities.
The federal government has a goal of awarding 3% of all dollars for federal prime contracts to HUBZone-certified small business concerns. Click here to see a list of the biggest industries, by contracting dollar amount, for HUBZone companies and small businesses.
Eligibility for HUBZone
To qualify for the program, a business (except tribally-owned concerns) must meet the following criteria:
- It must be a small business by SBA standards.
- It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe.
- Its principal office must be located within a “Historically Underutilized Business Zone,” which includes lands considered “Indian Country” and military facilities closed by the Base Realignment and Closure Act.
- At least 35% of its employees must reside in a HUBZone.
Understanding the SDVOB Certification
The SDVOSB certification is specifically designed to assist service-disabled veterans with their small businesses by establishing sole-source contracts and set aside opportunities. The program provides procuring agencies with the authority to set acquisitions aside for exclusive competition among service disabled veteran owned small business concerns.
Eligibility is based on the following criteria:
- The Service Disabled Veteran (SDV) must have a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense
- The SDVOSB must meet the SBA’s criteria as a small business under the North American Industry Classification System (NAICS) code assigned to the procurement
- The SDV must unconditionally own 51% of the SDVOSB
- The SDV must control the management and daily operations of the SDVOSB
- The SDV must hold the highest managerial position in the SDVOSB
Conditions for award include providing Department of Defense Form 214 which is issued upon a military service member’s retirement, separation, or discharge from active duty, as well as a letter from the US Department of Veteran’s Affairs stating that you are indeed service disabled, or discharge papers from the branch of service that you were in stating that you have a service connected disability.