The 8(a) Program can offer incredible opportunities: sole source contracts, set-aside competitions, mentor-protege relationships, SBA business training and much more.
But for business owners older than 59 1/2, getting admitted to the 8(a) Program can be very difficult: unlike their younger counterparts, funds these owners have saved in traditional retirement accounts will likely count against the 8(a) Program’s $250,000 adjusted net worth cap.
How is this fair? (Spoiler alert: in my opinion, it ain’t).
Last year, we wrote about the SBA’s Office of Inspector General’s concerns with the SBA’s review of potential 8(a) participants’ eligibility. In this report, the OIG made three recommendations aimed at improving to verify applicants’ eligibility.
Just last week, the OIG released a new report analyzing the 8(a) Program. This report picks up where the earlier report left off—it addressed several issues in the SBA’s evaluation of participants’ continuing eligibility.
The results of this report are rather alarming: based on its review, the OIG identified almost $127 million in 8(a) set-aside awards to ineligible firms.
In a recent post, I discussed the basics about SBA’s 8(a) Business Development Program. This follow-up posts discusses 8(a) eligibility requirements in greater detail.
To qualify for the 8(a) Program, a firm must be a small business that is unconditionally owned and controlled by one or more socially- and economically-disadvantaged individuals who are of good character and citizens of the United States and that demonstrates a potential for success.
What does this really mean? Here are five things you should know about 8(a) Program eligibility.
If you’re a small business owner interested in government contracts, you’ve probably heard about the SBA’s 8(a) Business Development Program. The 8(a) Program itself is complex, but its potential benefits are tremendous. In this post, I’ll break down some of the very basics about the 8(a) Program, leaving some of its complexities for upcoming posts.
Let’s get to it: here are five things you should know about the 8(a) Program.
To qualify for the 8(a) program, a disadvantaged individual must fall below certain personal net worth thresholds. Loans can reduce net worth–but not all loans are treated the same.
According to the SBA Office of Hearings and Appeals, if a disadvantaged individual intends to rely on a loan to reduce net worth, the loan better be bona fide.
To be eligible to participate in the 8(a) Business Development Program, an applicant firm must be a small business that is at least 51% owned and controlled by a socially- and economically-disadvantaged individual (or individuals) who are of good character and citizen(s) of the United States. The firm, moreover, must show a potential for success.
The Small Business Administration’s internal watchdog (the Office of Inspector General, or OIG) recently raised its continuing concerns regarding the admission of several entities to the 8(a) Program. The OIG’s report is worth reading, as it may lead to changes in the 8(a) Program’s eligibility criteria.
An 8(a) joint venture failed to obtain SBA’s approval of an addendum to its joint venture agreement—and the lack of SBA approval cost the joint venture an 8(a) contract.
In Alutiiq-Banner Joint Venture, B-412952 et al. (July 15, 2016), GAO sustained a protest challenging an 8(a) joint venture’s eligibility for award where that joint venture had not previously sought (or received) SBA’s approval for an addendum to its joint venture agreement.