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8(a) CERTIFICATION…IT’S ALL ABOUT GAINING A COMPETITIVE ADVANTAGE

8(a) certification…It’s all about gaining a significant competitive edge in doing business, especially with the Federal government.  What is a competitive advantage?  Simply stated, it’s what differentiates your company from any or all of your competitors in a way that’s important to a prospective customer’s decision to buy your product or service versus that of your competitors.

How do other companies differentiate themselves?  There are six fundamental strategies that can be used, alone or in combination with one another.  They are:

  • Price – That is how Wal-Mart, as the low-price provider distinguishes itself.
  • Quality – This is Mercedes, BMW’s and Rolex’s claim to fame, whether real or perceived.
  • Ease of Use – Human friendliness and ergonomic design are what Microsoft software/Windows and AOL have depended upon to become national leaders.
  • Speed of Service – Next Day Blinds, and even Dominos Pizza have used this ploy in the commodity markets of window blinds and fast-food.
  • Customer Perceived Value – Such brands as Nordstrom and Publix Grocery stores are known for their “well above-average” level of service and customer relationship maintenance.
  • Different – Being unlike others is a fundamental technique used by Apple Computer, the Satellite based radio providers, HBO, BET and Univision.

How does being 8(a) certified provide you with an opportunity to differentiate you and your company?  Here are but a few of the ways:

  • Price – Being certified can mean that your prospective customer need not buy from the lowest bidder, if you demonstrate other important values to them to contract with you.
  • Quality – Being 8(a) certified can mean that your prospective customer can buy from you, if you can convince them that you are better, even though smaller than your competitors.
  • Ease of Use – Being 8(a) certified can mean that your prospective customer can avoid developing detailed procurement specifications and having to organize and conduct complex and lengthy competitive procurements, subject to “sore-loser” protests.
  • Speed of Service – Simpler procurements are faster procurements, and that means that your prospective customer can get your products or access to your services in a fraction of the time as that which is available through competitive bidding.
  • Customer Perceived Value – Being 8(a) certified can mean that you are available quicker, easier, simpler and on more personally accommodating terms to your prospective customer than most of your competitors.
  • Different – Being 8(a) certified can mean that you are unlike the remaining 99.9% of all other small businesses in the U.S. that are not certified, just because of the fact that you have this important procurement assistance tool that you can share with your prospective customer.

8(a) Certification …What Is It?

The Small Business Administration’s 8(a) Program was created in 1974 to help minority and other disadvantaged businesses to grow through a program of federal contracting preferences and set-asides. Through the program, eligible firms can be awarded federal government contracts on a sole-source or non-competitive basis. Contracts up to $6.5M for manufacturing and up to $4M for just about everything else are available to certified firms under these non-competition bases. In addition to this, 8(a) contractors will also be eligible for participation in limited competitions where their competitors will be other companies like their own and not the “big guys.”

The Federal government set aside billions in contracts for 8(a) certified firms in its fiscal year 2012. But in spite of this, many eligible minority, women and Service-Disabled Veteran-owned businesses fail to take advantage of this lucrative program because they are put off by the difficulty of the application process. Until now that was true. Cloveer’s software and services accelerate and simplify the process of small business applying and being accepted for the SBA’s 8(a) program.

Today’s 8(a) Business Development Program is strengthened and improved to be a truly effective business development vehicle. New regulations permit 8(a) companies to form beneficial teaming partnerships and allow Federal agencies to streamline the contracting process. New rules make it easier for non-minority firms to participate by proving their social disadvantage. The SBA has also implemented the new Mentor-Protégé Program to allow starting 8(a) companies to learn the ropes from experienced businesses.

The new and improved 8(a) Program has become an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. Participation is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.

You see, applying for the SBA 8(a) Certification and gaining the above competitive advantages is well within your sights, need not be a waste of your time nor will it take forever either. It won’t be a waste of your money either, since Cloveer prequalifies all clients upfront.  Visit our website at www.cloveer.com or call us at 813-333-5800 to discuss your particular situation.

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The 10 Fundementals of Success for 8(a) Companies and their Presidents

1.  Keep the End in Mind, First!

2.  Develop a System for “Out-Managing” Your Competition

3.  Know Yourself, Your Company and Your Team, Intimately

4.  Be a Mentor, as Well as a Protégé

5.  Understand Your Competition, and “Out Differentiate” Them

6.  Be a Player – Join in the “Big-Guy” Games

7.  Data, Information, and Knowledge – Know the Difference, and Use These to Power Your Leadership

8.  Find and Win More Business – But First of All, “Be Picky”

9.  Problem Solve, Without Creating Losers, and Scapegoats

10.  Remember, You Get What You Pay For –Do You?

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7 out of every 10 businesses 8(a) Applications are denied by the SBA

Don’t get denied. Make sure you fully qualify for the 8(a) Program before first!

Unfortunately, many businesses try to prepare their own 8(a) application, without some sort of outside assistance, when a quick call to Cloveer could have saved them countless hours of of wasted time they spent putting together their application and the hassle of being denied by the SBA, causing a 1 year delay for re-application.

Here are just a few of issues we see on a daily basis that applicants are not aware of:

1. The applicant firm is earning more than 70% of its revenue with one single client causing economic dependence by the SBA.

2. The applicant has ownership in another business, resulting in a less than full-time devotion to the applicant business determination by the SBA.

3. The applicant firm has a potential affiliation with another firm resulting in the SBA requiring a size determination analysis, possible resulting in the business losing their small business size status.

At Cloveer, we conduct a free detailed pre-qualification interview with all of our clients.  We ask our clients the “Killer” questions that will let them know if they have an eligibility issue, unknown to them. The fact is that there are ways around a lot of the 8(a) eligibility issues.  We advise our clients on the pros and cons to any potential 8(a) eligibility issue and tell them when there is one that has no workarounds.

As you can see from our blog and website, www.cloveer.com, we provide more information about the 8(a) Program that all of our competitors. We want you every client to learn as much information about the SBA 8(a) Program as possible since they will be the one participating and using it as one of the tools to becoming a success. The more you know, the better decisions you can make before you apply and while you are in the 8(a) Program.

For more information on the 8(a) Program, please visit us at www.cloveer.com or call us at 813-333-5800.

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How to get 8(a) Certified if your firm has been in business for less than two years.

The SBA may waive the 2 year requirement if you meet each of the following conditions:

Condition 1: The individual or individuals upon whom eligibility is based have substantial business management experience.

In order to prove that the applicant and other key individuals of the business concern meet this condition, the individual or individuals resumes and past employment history must exhibit significant management experience either;

a. previously employed performing management duties (VP, CFO, President, Director) with a firm that operated in the primary industry or NAICS code  that the business concern is seeking 8(a) Certification for, or;

b. has owned and operating a similar business concern in the past.

In addition, the applicant and other key individuals of the business concern must also have the required technical capabilities, if required in your business situation. The applicant must also hold all requisite licenses and professional certifications within a firm who have been in business for less than two years.

Condition 2: The applicant has demonstrated technical experience to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD program.

In order to prove that you meet this condition, you must provide evidence of a business plan or some semblance of a business plan that:

a. Details your Marketing/Sales, Products/Services, Management/Organizational/Personnel and Finance goals and demonstrated progress towards the goals you specified.

b. Outlines any unique or special technical expertise that you and your team have and how you believe it will sustain your business during its early formative years.

You must also provide copies of independent reference letters from your clients, directly addressed to the applicant, that establish successful contract performance.

Condition 3: The applicant has adequate capital to sustain the operations and carry out its business plan as a participant.

In order to prove you meet this condition, your business must have sufficient working capital. Sufficient working capital is usually defined as a minimum of 3 months worth of liquid working capital immediately available. Your business bank account (s) statements must show that you have 3 times your monthly burn rate, at a minimum. In lieu of cash, a business line of credit may be substituted.

You should also describe your general payment terms and what actions your business takes to expedite the timely collection of receivables.

Condition 4: The applicant has a record of successful performance on contracts from governmental or nongovernmental sources in its primary industry category.

In order to prove you meet this condition you must provide proof of a minimum of at least two completed contracts showing operating revenues earned in the primary industry (NAICS code) in which it is seeking 8(a) Certification. The contracts must meet the following minimum conditions:

a. Show that you billed and received a minimum of $50,000 – $100,000.

b. The contracts must be with different entities and show that not more than 70% of the total operating revenue earned is with one single entity. The 70% rule does not apply if your direct billable client is a federal, state or local government agency.

Copies of all paid invoices and business bank account statements to support the operating revenue earned and collected from the contracts will need to be provided.

If you have a potential federal client that may want to procure your products or services, should you become 8(a) certified, you should provide letters of noncommittal as additional evidence.

In addition, the SBA may require proof that the government previously procured and is likely to procure the types of products or services offered by your business. Proof can be provided in the form of fbo.gov or FPDS.gov printouts of previous procurements that have occurred and are similar in nature to your products or services offered

Condition 5: The applicant has, or can demonstrate its ability to timely obtain, the personnel, facilities, equipment, and any other requirements needed to perform contracts as a Participant.

In order to prove you meet this condition you must provide an explanation of current and future personnel requirements, facilities and equipment.

For personnel requirements you should detail the current number of employees you have, any future hiring and how you will recruit and attract additional employees including timelines for hiring and any special relationship that exist with recruiters, personnel agencies and temporary agencies.

For facilities requirements you should detail your current office space, any future locations or expansions, how you will lease or purchase new office space including any relationships that exist with local commercial real estate brokers.

For equipment requirements you should detail your current equipment owned or leased that is needed to perform on contracts, any future equipment needed along with where you will lease or purchase and how you will finance or lease the equipment needed.

If you want more information on becoming 8(a) Certified, please visit http://www.cloveer.com or call us at 813-333-5800.

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8(m) WOSB and EDWOSB Program, who qualifies?

The Women-Owned Small Business Federal Contract Program provides equal access to federal contracting opportunities for women-owned small businesses (WOSBs) and economically disadvantaged women-owned small businesses (EDWOSBs).  The program allows contracting officers to set aside specific federal contracts for WOSBs and EDWOSBs in the 300 NAICS codes identified here.

The regulatory eligibility requirements for WOSBs and EDWOSBs are as follows:   1- The firm must be 51% owned and unconditionally controlled by women. 2- The women must be US citizens. 3- The women who control the business have at least the managerial expertise to run the firm. 4- No man or other entity has the ability to control the firm. 5- The women who own the firm manage it on a full-time basis.

EDWOSB certification adds the following requirements for the women controlling the business:

1- An adjusted net worth of less than $750,000. 2- A personal adjusted gross income of less than $350,000 per year over the last three years (i.e.:  a total of $1,050,000 for the past three years)

For more information on the SBA 8(m) WOSB and EDWOSB programs, or for assistance with your firm’s application, please visit us at www.cloveer.com or call 813-333-5800.

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8a Certification Advantages

8a certification is a valuable marketing vehicle for socially and economically disadvantaged small businesses to access the federal government marketplace. Initially, contracting under the 8a Program may seem more difficult than other methods. However, it is no more complicated than contracting under full and open competition through the sealed bid procurement process and it presents many advantages for both the government and the 8a contractor.

Advantages to the Government

A big advantage for government procurement personnel in selecting the 8a contracting method is that the agency does not have to solicit bids and may choose a specific 8a contractor to fulfill its requirements. For sole-source requirements under the competitive thresholds, the contracting agency can identify the 8a company to perform a contract by simply naming that company in an offering letter to the SBA. Of course this does not happen by itself. The 8a firm must actively self-market with the contracting agency or be introduced to the contractor through a referral. For competitive 8a requirements, the contracting agency does not have the same ability to choose a contractor, although the competition can be limited to eligible 8a companies within a certain geographic area or participation stage.

Another advantage for the government is that they can often get what they need faster by contracting though the 8a Program. This is because competitive requirements must be synopsized in FedBizOpps and the resulting solicitation must be open on the street for a minimum of 30 days. This process for full and open competition can take several months. 8a contracts have no synopsis requirements (except for competitive 8a contracts) and contracting agencies are not required to allow 8a firms 30 days to respond to the solicitation. Therefore 8a contracts can be finalized much faster.

Advantages to the 8a Contractor

The advantages to an 8a company are great. An 8a company can obtain federal contracts on a sole-source or limited competition basis much faster than in a full and open competition. For many small businesses, the costs of preparing proposals are very prohibitive. If the contract is a sole source, the 8a firm does not have to endure the costs associated with preparing a competitive proposal and participating in subsequent rounds of discussions with the contracting agency’s contracting officer.

Once the buying agencies are aware of the advantages of the 8a process and have a good experience with your 8a firm, they will most likely prefer to extend future contracts to you. The SBA plays a role in the beginning of the contracting process by verifying and approving the requirement for the 8a company. Once the requirement is in place, the 8a company and the federal agency deal directly with each other during negotiation of the contract and during performance of the contract.

Looking for help with Getting 8a Certified?

8a Application Accelerator

For our clients who are comfortable navigating the SBA 8a application process with a little less help than most, we have conceived an easy-to-use 8a Application Accelerator. As the nation’s #1 selling 8a application completion tool, we guarantee that no other program makes the process faster or easier. This interactive, web-based program takes you step-by-step through the creation and compilation of all the documentation necessary to submit your SBA 8a certification application. Moreover, the tool shows you how to organize your 8a application in the preferred SBA format. Every item and area within your 8a application will be identified and separated using our proven method, so your SBA reviewer can find, review and approve your SBA 8a application fast.

Other Services

For clients who are too busy running their businesses to complete the application themselves, we understand you don’t have time to look over the 8a checklist and that you would rather have a group of trusted 8a program experts more involved in your application. Cloveer offers other services including an 8a Application Review, and for those who would like their entire 8a application completed and approved in record time, a full 8a Application Completion Service.

No matter which option you choose, Cloveer guarantees that no other company will work harder or faster to assist you in getting your business SBA 8a certified. We have been assisting clients to obtain their 8a certification and maintain their 8a program eligibility for over 10 years. As such, we know the SBA 8a program regulatory requirements, 8a standard operating procedures and Office of Hearings and Appeal cases that affect the 8a program better than 99.9% of anyone else out there.

At Cloveer, we believe in treating you the way we want to be treated. We go the extra mile to make sure your experience with our company is outstanding. Contact us today to discover what Cloveer can do for you.

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8a Program Eligibility – The $250,000 Adjusted Net Worth Requirement

Among the many 8a business development program eligibility requirements, the applicant for 8a Certification must have a personal adjusted net worth of less than $250,000 at the time of 8a Application Submission.

What is the definition of Adjusted Net Worth?

The algorithm used to determine Adjusted Net Worth for 8a Certification purposes is:

Adjusted Net Worth = Assets – Liabilities – [Equity in primary residence + value of ownership interest in applicant business + value of any IRA/401(k) or other retirement account that is subject to a penalty for early withdrawal]

If  the applicant is married and the asset or liability is jointly held, you split the value 50/50. If the applicant is married and lives in a community property state, you split all assets and liabilities 50/50 unless you have a transmutation or pre/post nuptial agreement that states otherwise.

How can I determine my Adjusted Worth?

You can easily determine your Adjusted Net Worth by using our online calculator.

What is required to be submitted within the 8a Application to prove the applicant’s Adjusted Net Worth?

Each applicant, and their spouse, must submit a separate SBA Form 413, Personal Financial Statement. Along with the SBA Form 413 you must also submit statements for each asset or liability supporting the amounts reported. These statements cannot be any older than 30 days at the time of 8a Application submission.

Are there any ways to reduce an applicant’s Adjusted Net Worth below the $250,000 threshold?

For more information, contact us.

*Important* You cannot transfer an asset out of the applicant’s name within two years of the time your apply for 8a Certification for less than fair market value. Doing so will result in the full amount of the asset being re attributed back to the applicant.