How does the SBA determine if an 8a applicant business concern is defined as a Small Business?

The 8a applicant business concern must define their primary North American Industry Classification System (NAICS) code with the 8a Application paperwork. The primary NAICS code is the six digit code in which the business concern earned its largest segment of annual receipts or total income, in the most recently completed fiscal or taxable year.

For example, a business concern that earned its largest segment of total income engaged in commercial or institutional building construction would have a primary NAICS code of 236220.

To begin determining if the business concern is defined as a Small Business, the SBA will lookup the size standard for the NAICS code.

For example, the size standard threshold for NAICS code 236220 is $33.5M.

The SBA will then add the amounts reported on the business concerns “Gross Receipts or Sales” line of their business tax return for the last three taxable years and determine its three year total income.

Finally, the SBA will take the three year total income and divide this amount by three to determine its three year average total income.  The three year average income amount is the amount used to determine if the business concern is below the size standard threshold for their primary NAICS code.

In our example, if the business concern’s three year average income is less than $33.5M, the business concern will be classified by the SBA as a “Small Business”.

*Important*

When the SBA examines the size of the business concern they will look for any possible issues involving affiliation. Affiliation arises when the business concern controls another firm or another firm controls the business concern. It can also arise when one individual has the power to control both the business concern and another firm (e.g. this individual owns more than one firm) or there are identical or substantially identical business or economic interests, such as family members, persons with common investments or firms that are economically dependent through contractual or other relationships. The SBA will also consider ownership, management, previous relationships with or ties to another firm, and contractual relationships in determining whether affiliation exists.

If you suspect that you may possibly have an affiliation with another firm, contact Cloveer for further assistance.

What is an 8a Participation Agreement?

Every company that becomes 8a Certified with the SBA must sign a participation agreement.  The agreement is the same for all companies and by signing it, you are agreeing to abide by the 8(a) BD regulations, 13 C.F.R. § 124, which can be found at http://www.access.gpo.gov/nara/cfr/waisidx_07/13cfr124_07.html.

In addition, you will be agreeing to submit financial statements and tax returns on an annual basis.  For companies with gross annual receipts between $1M and $5M the financials must be reviewed by an independent qualified public accountant.  For companies with gross annual receipts over $5M, the financials must be audited by an independent qualified public accountant.

The participation agreement also provides a list of 26 items that will cause termination from the program. Three examples of occurrences that can cause termination of your company from the 8a program are:

  1. Failure by the concern to obtain prior written approval from SBA for any changes in ownership, business structure, management, or control.  Hiring a key officer without prior approval is an example of this.
  2. Failure by the concern to obtain prior SBA approval of any management agreement, joint venture agreement or other agreement relative to the performance of a section 8(a) subcontract.
  3. Failure by the concern to provide SBA with Annual Update reports as required.

An actual Participation Agreement including the complete list of conditions and causes for termination is available for viewing.  For expert assistance with maintaining 8a program compliance and annual reporting requirements, contact Cloveer.

Top 5 Myths about doing business with the federal Government

Myth #1 – “Only Big Companies Win Contracts”

Fact – Preferential treatment is actually give to small, minority, woman, handicapped and service disabled owned business. Small businesses get awarded more than 25% of all federal contracts.

In FY 2009: Small businesses were awarded 92.7 billion dollars in contracts with an average award of $27,000 per contract. Better yet:

In FY 2009, 8a Certified businesses were awarded 16.2 billion dollars in contracts with an average award of $158,000 per contract. That is 7 times the size of a federal contract that is awarded for all other small set-aside business types.

Myth #2 “The Federal Government Does Not Buy My Product or Service”

Fact – The federal government buys nearly every product and service you can imagine.

In FY 2009 the federal government awarded over 61,000 contracts totaling more than $16.6 billion dollars just for Commercial Construction projects. For IT companies, they awarded over 20,000 contracts totaling more than $5.5 billion dollars just for Custom Computer Programming projects. If you would like to know exactly how much the federal government spent on your products or services, visit https://www.fpds.gov

Myth #3 “There Is Too Much Red Tape To Do Business With The Federal Government”

Fact – The federal government has procurement methods such as the SBA 8(a) Program which actually shorten the time it takes to be awarded a contract and the amount of paperwork and red-tape required to do so.

An 8(a) contract typically takes about 1/10 the time to be awarded vs. a full and open competition contract. You can even help in writing the actual statement of work and 8(a) Contracts are not subject to protests.

Myth #4 ” I Am Not Located In Washington, DC Or Near A Military Base So I Can’t Do Business With Them”

Fact – There are federal facilities located in every state, city and country. This being said, you are not limited by your geographical location.

Myth #5 “It’s Difficult To Get Started Doing Business With The Federal Government”

Fact – Again, the federal government has procurement programs that simplify the processes of doing business with them, such as the SBA 8(a) Program, if you are minority, woman, handicapped or service disabled veteran owned business.

If you are looking for a company to assist in the process of getting your business 8(a) Certified, contact us today to discover what Cloveer can do for you.

Small Business Government Contracts – for Women, Minorities, Veterans and Disadvantaged Business Owners

Each year, hundreds of thousands of small business owners around the country apply for SBA loans and SBA grants. The application processes are long, complicated, and highly selective, leaving most applicants without funding.

Unlike government grants and loans however, small business government contracts, the provisions for which are made under section 8a of the Small Business Act can give women, minorities, handicapped, service disabled veterans, and disadvantaged small business owners repeat business at no cost to them. 8a government contracts for minorities, women, handicapped, service disabled veterans, and other disadvantaged individuals are highly sought after for this reason, but complex to obtain. There are however, strategies to overcome this opposition.

Finding Contract Opportunities

There are a few key techniques for finding government contract opportunities, many of which involving simply surfing the Internet:

  • Visit the Federal Business Opportunities website at http://www.fbo.gov. There you can search specifically for 8a contract opportunities, and have targeted opportunities sent to you via e-mail.
  • Research each federal agency’s long-range acquisition estimates (LRAE). Each major federal agency maintains a LRAE which identifies anticipated procurements upcoming that are over $100,000.
  • Contact each federal agency’s Office of Small Disadvantaged Business Utilization (OSDBU) office. OSDBU offices ensure that small and disadvantaged businesses are provided maximum practicable opportunity to participate in the agency’s contracting process.
  • Visit the Federal Procurement Data System website. It contains information about every federal procurement that has ever taken place. The website can be found at https://www.fpds.gov
  • Simply arrange a meeting with the contracting officer(s) of whichever federal agency with which you would like to do business. At such a meeting, you can give an informative presentation and market your product(s)/service(s).

Unfortunately, it proves difficult to be awarded a government contract unless you’re SBA 8a certified. This is where we come in.

Getting Certified with Cloveer

The SBA 8a application process is tough, and we know it. That’s why we’re in business; we want to help women, minorities, handicapped, service disabled veterans, and disadvantaged small business owners secure 8a certification, so they are given a fair opportunity to acquire government contracts. After all, Cloveer is a minority owned business.

We having been assisting clients to obtain 8a certification and maintain their 8a program eligibility for over 14 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. We put this experience to work each day through each of our services:

  • 8a Application Review: For those of our clients who have already prepared an application, the 8a application review service ensures that not only is your application complete, but that it is in fact 8a eligible.
  • 8a Application Completion: Many of our clients recognize the experience we have in preparing SBA 8a applications. With over 14 years and 2,000 successful application under our belts, we have quite a bit! For these customers, we offer a complete 8a application service. We will prepare everything for you, so you can concentrate on running your business.

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. Contact us today to discover which option works best for you.

5 Ways to Find 8a Contract Opportunities

1. Visit the Federal Business Opportunities web site. It contains thousands of active federal procurements. The web site can be found by visiting http://www.fbo.gov.

You can narrow down your search for 8a set-aside contract opportunities or set-up an account to automatically receive targeted opportunities via email. We suggest that you specifically look for 8a opportunities that are in the pre-solicitation or sources sought phase as most of the other phases are too far along in the procurement process already.

2. View each Federal agency’s long range acquisition forecast (LRAE). For example http://www.selltoairforce.org/opportunities/index.php. Each major federal agency maintains a LRAE which identifies anticipated procurements upcoming that are over $100,000.

3. Contact each Federal agency’s OSDBU (Office of Small Disadvantaged Business Utilization) office. The OSDBU’s ensure that small and disadvantaged businesses are provided maximum practicable opportunity to participate in the agency’s contracting process. The primary responsibility of the OSDBU is to ensure that small businesses are treated fairly and have an opportunity to compete and be selected for a fair amount of the agency’s contracting and subcontracting dollars. You can find the contact information for each OSDBU office by visiting each Federal agency’s web site.

4. Visit the Federal Procurement Data System web site. It contains every federal procurement that has ever taken place. The web site can be found by visiting https://www.fpds.gov

You can search and find out which agency is buying your products or services, the names of your competitors who were awarded past contracts, their dollar value, location, NAICS code and more.

5. Finally, narrow down the Federal agencies who you want to do business with, find out who the contracting officers are, setup a face to face meeting, and market your products and services to them.