This document summarizes information about the SBA 8(a) Business Development Program. It outlines eligibility requirements such as being a small business owned and controlled by a socially and economically disadvantaged individual. It describes benefits of the program such as contracting assistance and training. Participants are expected to complete a business plan and annual review. The application process involves submitting an online application that is reviewed for completeness and eligibility.

1. www.sba.gov

2. 8(a) Business Development Program
Nan Ritz
Business Opportunity Specialist
SBA MN District Office
100 North 6th Street
Suite 210-c
Minneapolis, MN 55403
(612) 370-2316
Nan.Ritz@sba.gov
www.sba.gov

3. U.S. Small Business Administration
• Financial Assistance
• Business Counseling and Training
• Disaster Assistance
• Government Contracting
– Prime Contracting
– Subcontracting
• http://www.sba.gov/ (national)
• http://www.sba.gov/mn (local)
www.sba.gov

4. Non-Federal Categories
• CERT Program
– St. Paul, Ramsey County, Minneapolis, Hennepin County
– (651) 266-8900 http://www.govcontracts.org
• DBE Program
– Federally Funded Transportation - MN/DoT, MET Council, MAC
– http://www.dot.state.mn.us/eeocm/index.html
– (651) 297-1376 (MN/Dot), or (651) 602-1188 (MET Council)
• Targeted Vender
– State of Minnesota
– Helpline 651-296-2600 http://www.mmd.admin.state.mn.us
• Minnesota Minority Supplier Development Council (MMSDC)
– Corporate Certification of MBE- Minority Business Enterprise.
– (612) 465-8885 http://www.mmsdc.org
• Women’s Business Enterprise National Council (WBENC)
– Certification as women owned
– (612) 659-6584 http://www.wbenc.org
www.sba.gov

5. Federal Small Business
Categories
• Small Business (Self certify).
• Small Disadvantaged Business (self certified) -
Includes 8(a) BD (SBA certified).
• HUBZone Small Business (SBA certified).
• Woman-Owned Small Business (SBA certified) -
- Registration at WOSB Repository.
• Veteran-Owned and Service Disabled Veteran-
Owned Small Business – Online registration at
Vetbiz.gov required for VA.
www.sba.gov

6. One Stop Shop
for All of These Programs
SADBOC website:
http://www.doi.gov/febtc/sadboc.htm
2012 SADBOC Government Procurement Fair,
4/25/12: Exhibitors Hall, SBA/SADBOC Booth
Upcoming 2013 Government Procurement Fair!
Thursday, 4/25/13, Earle Brown Heritage Center
www.sba.gov

7. What We’ll be Talking About
• Overview of 8(a) BD Program
• Eligibility Requirements
• Benefits of the Program
• What is Expected of Participants
• Applying to the Program
www.sba.gov

8. What is the 8(a) Program?
Objectives:
• “to promote the business development of small
businesses owned by socially and economically
disadvantaged individuals…” procurement
marketplace.
• “to promote the competitive viability of such
concerns…”
• 8(a) BD Program regulations at: 13 CFR 124.
www.sba.gov

9. What are the 8(a) Participant
Requirements?
• Must be a small business concern
– Independently owned and operated, organized for profit, and not dominant
in its field.
• Must be unconditionally owned and controlled by one or more
socially and economically disadvantaged individuals who are of good
character and citizens of the U.S.
– Social disadvantage.- refers to individuals who (beyond their control)
have been subjected to racial or ethnic prejudice or cultural bias because
of their group membership identity without regard to individual qualities.
– Economically disadvantage. – refers to socially disadvantaged
individuals with an impaired ability to compete in the free enterprise
system because of diminished capital and credit opportunities.
• Must have a potential for success including two years in business.
www.sba.gov

10. Small Business
Size Standards
• Based on North American Industrial Classification
system codes –NAICs.
• Codes and corresponding size standards at
www.sba.gov/size.
• Manufacturing and Wholesaling – One-year average
number of employees.
• Service Industries – Three-year average revenues.
• Self Certification
www.sba.gov

11. Social Disadvantage
Designated Groups
Individuals are presumed to be socially
disadvantaged if they are a U.S. Citizen and a
member of one of the following groups:
Black American
Asian Pacific American
Hispanic American
(includes individuals of Spanish & Portuguese descent)
Native American
Subcontinent Asian American
www.sba.gov

12. Social Disadvantage
Non-Designated Groups
Non-minority women, disabled, other individuals that
believe they have encountered discrimination may
claim to be socially disadvantaged.
– Must demonstrate individual social disadvantage
– Education, employment, business history
– Preponderance of the evidence
www.sba.gov

13. Economic Disadvantage
Eligibility
Applicants must demonstrate
• Adjusted Net Worth may not exceed $250,000 for initial
eligibility; $750,000 for continuing eligibility.
• Personal Income must not exceed $250,000 (3-yr. average);
$350,000 for continuing eligibility.
• Total Assets must not exceed $4M for initial eligibility; $6M for
continuing eligibility (allows for growth during the 9-year
program participation).
NET WORTH
Less Equity in primary residence
Less Equity in business
Equals Adjusted net worth
Applicant must also describe economic disadvantage in a narrative
statement
www.sba.gov

14. Eligibility Criteria
Good Character
What shows lack of good character?
Adverse information regarding possible criminal conduct by
the applicant or its principals.
Violations of any SBA regulations.
Debarred or suspended individuals or firms.
Applicant firms and principals that lack business integrity as
shown by an indictment, guilty plea or civil judgment.
Any principal who is incarcerated or on parole or probation.
Evidence that the firm knowingly submitted false information
during the application process.
Any firm or any of its principals that fail to pay financial
obligations to the Federal Government.
www.sba.gov

15. Eligibility Criteria
Ownership
• At least 51% unconditional ownership by the
disadvantaged person(s).
• Partnerships: Agreements must reflect unconditional
ownership.
• Limited Liability Company: Disadvantaged
individuals must own at least 51% of each class of
member interest.
www.sba.gov

16. Eligibility Criteria
Control and Management
• Partnerships: Agreements must reflect unconditional
management by disadvantaged partner(s).
• Limited Liability Company: One or more
disadvantaged individuals must serve as management
members with unconditional control.
• Corporations: One or more disadvantaged directors
must be able to control the board and establish a quorum
without the presence of non-disadvantaged directors .
– No super majority
www.sba.gov

17. Eligibility Criteria
What Constitutes Control?
The Disadvantaged Individual must:
• Hold the position of President or Chief Executive Officer,
Managing Partner or LLC Managing Member.
• Devote full-time to the business during normal business
hours.
• Be the highest compensated individual.
• Have the ability to hire and fire.
• Set Policies.
• Have the ability to commit firm to contracts.
• Have the ability to the control budget and financial
disbursement.
www.sba.gov

18. Eligibility Criteria
Potential for Success
Factors considered:
• Must be in business in its primary NAICS code for at least
two full years immediately prior to the date of its 8(a)
application.
• Proof of two years operation in the firm’s primary industry
as verified by revenues reported in business tax returns.
• Financial capability: sufficient capital, financial
performance, bonding capacity, manageable debts.
• Managerial and Technical capability: performance on
previous contracts, firm has the necessary personnel,
licenses, certifications, facilities, prior experience.
www.sba.gov

19. Eligibility Criteria
Waiver of the Two Year Rule
SBA may waive the two-year rule if:
• The individual or individuals upon whom eligibility is to be
based have substantial and demonstrated business
management experience;
• The applicant has demonstrated technical expertise and
has adequate capital to carry out its business plan with a
substantial likelihood for success if admitted to the 8(a)
BD Program;
• The applicant has successfully performed on government
or non-government contracts.
www.sba.gov

20. Eligibility Criteria
One Time Eligibility
• Each person can only participate once in
the 8(a) BD program.
• Each business can only participate once
in the 8(a) BD program
www.sba.gov

21. Assistance Available to 8(a)BD
Participants
• 8(a) BD Contracting
• 8(a) BD Mentor Protégé Program
• Training (7j and other community events)
• Introductions to procuring agencies and
prime contractors
• Surplus Property Program
www.sba.gov

22. 8(a) BD Contracting
8(a) Sole Source
• Requirement offered to SBA.
• Contract price, including options, is $6.5M or
less for manufacturing NAICS codes.
• Contract price, including options, $4M or less for
all other contracts.
• Contract is negotiated with one 8(a) BD
participant.
• Contractor must comply with Limitations on
Subcontracting Clause.
www.sba.gov

23. 8(a) BD Contracting
8(a) Competition
• Requirement offered to SBA.
• Competition limited only to 8(a) participants.
• In construction, competition may be limited
geographically.
• SBA confirms eligibility determination of
successful 8(a) participant.
• Contractor must comply with Limitations on
Subcontracting Clause.
www.sba.gov

24. 8(a) Mentor Protégé Program
• Written Agreement
– Sets forth participants needs – tied to business plan
– Mentor promises specific assistance to meet needs
• Agreement approved in SBA HQ.
• 8(a) participant (Protégé) and approved Mentor
can Joint Venture (JV) on federal contract and JV
entity can be considered small (even if mentor is
large).
• Agreement is reviewed annually by SBA as part of
8(a) annual review.
www.sba.gov

25. What’s Expected of 8(a) BD
Participants
Participants Must:
• Upon acceptance into the 8(a) BD program
complete an 8(a) business plan.
• Prepare and submit an annual review package
every year.
• Provide annual financial statements to SBA.
• Report any change in ownership and control to
SBA prior to the change.
www.sba.gov

26. What’s Expected of 8(a) BD
Participants
Participants are strongly encouraged to:
• Market to Federal Agencies.
• Attend all SBA-sponsored training and networking
events.
• Become familiar with 8(a) BD Program requirements
found in13 CFR 124.
www.sba.gov

27. Applying to the 8(a) BD
Program
• Online application available at www.sba.gov/8abd
• Application is accessed after going through the e-
8(a) suitability assessment tool.
• Must be registered in Central Contract
Registry/Dynamic Small Business Search & Online
Registration & Certification Application.
• Be sure to provide all of the requested information.
• Applications are processed by SBA’s Division of
Program Certification and Eligibility (DPCE) in San
Francisco for Region V.
www.sba.gov

28. Application Processing
• DPCE reviews application for completeness and advises firm
of deficiencies within 15 days.
• If incomplete, applicant submits corrections within 15 days and
a determination of completeness is made by DPCE within 10
days of receipt of firm’s response.
• Applicant advised of outcome by the Associate Administrator
within 90 days from the date completed application was
accepted.
• If declined, applicant advised of right to request
reconsideration within 45 days of decline date.
• If declined after reconsideration, there is a mandatory 12-
month waiting period before firm may reapply.
www.sba.gov

29. Contact Information
SBA Minnesota District SBA Office
Randy Czaia (612) 370-2314
randall.czaia@sba.gov
Nan Ritz (612) 370-2316
nan.ritz@sba.gov
www.sba.gov/mn
www.sba.gov

30. www.sba.gov