Getting established as a disadvantaged business and deemed by the Small Business Administration (SBA) as having 8(a) status requires several qualification factors for certification. The process itself is subject to the oversight of the SBA, so it is important that you have done your homework before you engage in the process. A great resource for this purpose, and the one I used for my research, is The 8(a) Program: A Comprehensive Guide to the SBA’s 8(a) Business Development Program – In Plain English. Grab a copy – you can thank me later!
Get Acquainted With 8(a) Status
Once you establish that you have the criteria necessary, I highly recommend going through the process because access to federal contract opportunities and the ability to gain notice by Prime contractors is made a bit easier when you can show 8(a) status. Why? Because the vetting system through the SBA requires a significant amount of proof that you qualify and these requirements show you are a viable choice for the opportunities you are seeking.
But before you engage, did you know that having access to working capital, long-term financing, and showing good credit standings all come into play to determine whether or not you qualify as an 8(a) business? Being able to fund the work you seek is an integral part of qualifying for the vehicle that can give your business higher visibility and access to the type of work you seek with the federal government. It is 1 of 4 components needed to show that your business is “capable of success”–a precept in the list of requirements for this certification.
Prove Your Readiness With Reporting
If you are only new to government contracting and not a new business in general, this may not be difficult to prove. But if you are a business that has three years or fewer of past performance experience, you may have trouble substantiating this stipulation. Establishing a relationship with a secured lender either through a non-traditional (like Parabilis) or traditional (like a bank) financial partner is a good idea at this time. These relationships can provide letters of financial capability vouching for your ability to afford the chance to perform. Additionally, creating adequate reporting to show financial stability can be beneficial in the certification process.
Speaking of reporting, did you know that if your NAICS code on your tax return reflects differently than the primary NAICS you establish with the SBA, this can send a red flag for your 8(a) certification? NAICS codes should reflect where you have done your work within the period the SBA looks at for your qualification for this status. Choosing the primary NAICS code wisely is essential.
Build Your Best Team
It is important to have an accountant or CPA who understands the nature of your pursuit of contract opportunities. Ideally, this person understands how to designate a NAICS code that will benefit your ability to gain contract opportunities within the requirement for that code.
In this case, size does matter. Both your annual revenue and the number of people you employ will determine your small business status as it pertains to the contract and your NAICS code. It can be a lot to digest, and these are only a few things to keep in mind. Proper planning, a strong team of partners who are knowledgeable of government contracting, and accurate reporting can all assist in your business’s ability to be a certified 8(a) business and begin the pursuit of contract opportunities specifically designated for your business and expertise!