Don’t think the 8(a) Program or HUBZone Program has any work? Think Again!

If you don’t think the 8(a) Program or HUBZone Program can be a valuable tool for your business just look at the following 8(a) and HUBZone contract information pulled from the Federal Procurement Data System (FPDS) for just the period of 10/1/2014 through 09/30/2016.


8(a) Sole Source Contract Actions:
Total Action Obligations: $17,327,494,322.14
Total Contract Actions: 122,381

8(a) Competitive Contract Actions:
Total Action Obligations: $16,760,620,275.87
Total Contract Actions: 72,546

8(a) with HUBZone Preference Contract Actions:
Total Action Obligations: $13,444,789.30
Total Contract Actions: 29

Summary:
Total 8(a) Sole Source, Competitive and HUBZone Preference:

Total Action Obligations: $34,101,559,387.31
Total Contract Actions: 194,956


HUBZone Set-Aside Contract Actions:
Total Action Obligations: $3,300,688,237.85
Total Contract Actions: 23,405

HUBZone Sole Source Contract Actions:
Total Action Obligations: $78,474,087.11
Total Contract Actions: 1,014

Summary:
Total HUBZone Set-Aside and Sole Source:

Total Action Obligations: $3,379,162,324.96
Total Contract Actions: 24,419


Need assistance with your 8(a)  or HUBZone Application? With 15 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8(a) or HUBZone certified.  Contact us today at 813-333-5800 or visiting our website at cloveer.com to discover what Cloveer can do for you.

Reduce your 8(a) Application review time, at the SBA, by 30+ days.

There are several certifications that are required to be submitted within your 8(a) Application paperwork. Failure to submit these signed and dated certifications will result in a letter back from the SBA deeming your 8(a) Application deficient or incomplete.

Please note. None of the below certifications are identified within the SBA’s current 8(a) Checklist. This blog post alone will save you at least one letter back from the SBA and possibly 30+ days of processing time at the SBA.

5 certification sheets that you must provide to the SBA within your 8(a) Application paperwork:

  1. Certification that the applicant firm’s financial statements truthfully and accurately represent the financial condition of my company.
  2. Certification that no 8(a) applicant, owner, director, or key officer of the applicant firm, or the applicant firm itself, have any delinquent federal obligations, past due taxes or liens.
  3. Certification that no immediate family member of any 8(a) applicant, owner, director, or key officer of the applicant firm has ever been an officer, director or shareholder of any other firm that is a current 8(a) Program participant or was a previous participant in the 8(a) Program.
  4. Certification that no 8(a) applicant, owner, director, or key officer of the applicant firm has ever been an officer, director or shareholder of any other firm that is a current 8(a) Program participant or was a previous participant in the 8(a) Program.
  5. Certification that the no 8(a) applicant, owner, director, or key officer of the applicant firm has any ownership interest in any other business other than the applicant firm,  or has an immediate family member who has ownership interest in any other business.

You should put each of the above certifications on a separate printed sheet and sign/date all of these and include a copy within your 8(a) Application. Please make sure all of these certifications provided to the SBA are accurate and truthful. Penalties for misrepresenting anything in your 8(a) Application are severe.

If any of the above cannot be provided because they might apply in your circumstances, please call us at 813-333-5800 for more information.

Active SBA 8(a) Certified Firms as of July 1, 2014 by Location

There are 7,078 active SBA 8(a) Certified firms as of July 1, 2014. Below is an info graphic showing the location by state and number of active SBA 8(a) Certified firms. The source of this information is the SBA Dynamic Small Business database.

8(a) Certified Firms as of July 1, 2014

8(a) Certified Firms as of July 1, 2014

The top five states with 8(a) Certified Firms are:
1. Virginia – 880
2. California – 789
3. Maryland – 668
4. Texas – 605
5. Florida – 441

The top five states or US territories with the lowest number of 8(a) Certified firms are:
1. Vermont – 2
2. U.S. Virgin Islands – 3
3. Rhode Island – 7
4. Delaware – 9
5. North Dakota  – 10

This information is provided by Cloveer.com.

Cloveer provides products and services on the SBA 8(a), HUBZone and VA VetBiz programs.

Have additional Questions? or want to get started on your SBA 8(a) Application?

With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today at 813-333-5800 or visiting our website at www.cloveer.com to discover what Cloveer can do for you. We also offer these options for further assistance in completing your 8(a) Application.

Option 18(a) Application Review

  • For those who wish to complete the application on their own we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 28a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

 

Do you qualify for the SBA 8(a) Program?

There are many eligibility criteria that a small business must meet to qualify for the SBA 8(a) Program. We have developed a free online 8(a) eligibility questionnaire that anyone can use to see if their business meets the 8(a) eligibility criteria.

http://www.cloveer.com/8aquestionnaire.html Screenshot

Cloveer.com 8a Program Eligibility Questionnaire

This free online 8(a) Certification Eligibility Questionnaire should generally be completed by the individual who primary 8(a) Program Eligibility will be based upon.

The questionnaire will take approximately 10-15 minutes to complete and as you answer most of the questions, it will automatically inform you if you have a potential eligibility issue.

If you find that you do qualify, we have three 8(a) Application Completion options:

Option 18(a) Application Review

  • For those who wish to complete the application on their own we offer an 8(a) Application Review service.  Here, one of our 8a program experts will review your entire application, checking it for missing documents and potential eligibility issues.  We will then advise you as to how best to modify your application to ensure it will be approved an SBA reviewer.

Option 28a Application Completion Service

  • The majority of our clients however, prefer a little more of a hands-on approach.  They recognize the expertise we have accumulated in the over 14 years we’ve been assisting clients obtain 8(a) certification, and want us to put it to use for them.  If you opt for our 8(a) Application Completion Service, we will work one-on-one with you to ensure that your 8(a) Application is 100% complete and compliant so the SBA can review and accept it the first time.

With 14 years and over 2,000 successful applications under our belt, we can assure you that no matter which option you choose, Cloveer will work harder and faster to get your business SBA 8a certified.  Contact us today to discover what Cloveer can do for you.

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 = Personal Assets – Personal 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 only split assets and liabilities 50/50 if 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 Adjusted Net Worth Calculator.

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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.

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?

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.

A list of supporting documentation that must be submitted with your 8a Application

Here is a typical list of supporting documents that will need to be included within your 8(a) application:

  • Evidence of concerns registration in SAM (System for Award Management) and DSBS (Dynamic Small Business Search) systems
  • Personal federal tax returns for the last three filing years
  • Company federal tax returns for the last three filing years
  • A company balance sheet and income statement no older than 90 days and for the last three completed years
  • Personal resume
  • List of current and past federal and non-federal contracts and invoices within the last two completed fiscal years
  • Letters of reference from current and/or past clients
  • Current certificate of good standing
  • Stock certificates/Stock ledger (Corp)
  • Articles of Incorporation/Organization/Partnership Agreement including any foreign filings
  • Bylaws or Operating Agreements
  • Meeting minutes (Corp and LLC)
  • Buy/Sell or Voting Agreements
  • DBA or Fictitious Business Name Filing
  • Organization chart
  • Business bank signature card
  • business and special licenses
  • Business loan agreements
  • Brief history of the business
  • Lease agreements for business
  • Business insurance
  • Personal financial statement supporting statements (Checking, Savings, IRA w/terms, etc..)
  • Proof of Citizenship
  • Trust Agreements
  • Statement of Bonding Limit
  • Letter of No Objection

Keep in mind that each 8(a) Application is unique and document requirements vary based upon the entity type and number of applicants.

8a Certification: How to determine if your AGI is below the $250,000 threshold.

The $250,000 Threshold for Adjusted Gross Income (AGI)

Among the many 8(a) business development program eligibility requirements, the applicant for 8(a) Certification must have an average AGI over the past three taxes years of less than $250,000.

What is the definition of Adjusted Gross Income?

Adjusted gross income (AGI) is a tax term for an amount used in the calculation of an individual’s income tax liability. AGI is calculated by taking the applicants  gross income and subtracting their maximum allowable adjustments. AGI is the last number on the first page of the Form 1040.

How do I determine my Adjusted Gross Income for 8(a) Certification Purposes?

The easiest way to initially determine if you exceed the $250,000 threshold, averaged over the last three years is to add up the AGI number reported on the first page of your last three years of federal tax returns. If you add these three numbers, divide them by three and result in a number larger than $250,000 you must do further analysis. If the number is less than $250,000 you do not exceed the threshold regardless of what is discussed below.

If your resulting calculation shows more than $250,000, and you are a married, filing the taxes jointly, you should then separate the portion of any income reported on the tax return between the applicant and their spouse (e.g Line 7 (1040). Wages, salaries, tips, etc = $100,000 (Applicant’s portion, $40,000 –  Spouse’s portion, $60,000). Once you have separated out all of the income reported on the tax return between the applicant and their spouse again take the total for the last three years and divide them by three. If the resulting number is still larger than $2500,000 you must do further analysis. If the number is less than $250,000 you do not exceed the threshold regardless of what is discussed below.

One final analysis can be performed to see if you still exceed the $250,000 threshold. If the applicant business concern is an LLC or S-Corporation you may:

1. Deduct any income associated with the business concern that was reinvested into the business concern, less any distributions.

2. Deduct any income used to pay the LLC or S-Corporation Federal taxes within 12 months of the distribution of income.

Determining your AGI can be somewhat complex for 8(a) Certification purposes. Cloveer can help you to determine your AGI should you need further assistance. Please visit our website at www.cloveer.com for more information on 8(a), HUBZone and 8(m) Certification.

15 8(a) Application Killers

Spending the time upfront to ensure that your firm meets all of the eligibility requirements for 8(a) Certification can save you countless hours of frustration, the expense of putting the application together incorrectly and the difference between obtaining formal 8(a) Certification or not.

Below are just 15 of the 8(a) Application “Killers”. These will immediately tell you whether you have an issue that may prevent you from qualifying for 8(a) Certification.

1. The applicant (51% of more owner) must be a US Citizen when they apply.

2. The applicant must devote full time to the business concern that is applying for 8(a) Certification when they apply. This means the applicant must work at least 40 hours per week in the business concern without any outside employment.

3. The applicant must hold the highest management position within the business concern. Generally this is the CEO, President or Managing Member.

4. The applicant must be able to demonstrate that they are the highest compensated. Generally the SBA will deny your 8a application if you cannot demonstrate the applicant currently is the highest compensated or there is a very good reason why they have elected not to be.

5 The applicant must have an adjusted net worth of less than $250,000 at the time they apply. Adjusted net worth = Personal Assets – Personal liabilities – (Equity in primary residence + value of ownership interest in business concern + IRA/401(k) or Other Retirement Accounts subject to a penalty for early withdrawal). To determine if your adjusted net worth is lower than $250,000 use our adjusted net worth calculator.

6. The applicant’s AGI (Adjusted Gross Income) cannot be more than $250,000 averaged over the last three tax years.

7. The applicant must generally hold all licenses or professional certifications required to operate the business concern. If they do not, another equity owner cannot be the holder of the required licenses.

8. If the applicant has ownership in another business concern, other than the business concern that is applying for 8(a) Certification, the SBA may very well likely determine that you do not devote full time and therefore deny your 8(a) application. The only exception would be for ownership in an LLC for holding, managing and protecting real estate. There are ways to solve this issue and they vary depending on your unique condition.

9. The applicant cannot be on probation or parole. If the applicant has been arrested in the past it does not automatically deny them unless they were convicted of a specific crime. Having an arrest, regardless of how long ago, will severely delay the review of your 8a Application by at least 90 days.

10. The business concern must have been in business for 2 full years with evidence of reasonable revenues on its last two tax returns in the industry it is seeking 8(a) Certification for.  If it has not, you must seek a waiver and meet the 5 conditions set by the SBA to overcome this condition. Click here for detailed information on each of the 5 conditions.

11. The business concern and the applicant cannot have any delinquent tax filings or have any unpaid Federal, State or local obligations at the time of application. This condition can be overcome by filing the proper extension for delinquent taxes or by providing evidence of a current re-payment arrangement for unpaid Federal, State or local obligations.

12. The business concern must be at least 51% directly owned by the applicant and must be defined as a “Small Business” by the Federal Government. Your primary NAICS code, gross sales and sometimes the number of employees define your size standard that the SBA will base its determination on.. The business concern must also be a for-profit business and cannot be classified as a broker or be a subsidiary of another business concern.

13. The business concern’s current financial statements must exhibit positive net income, positive net equity and sufficient working capital at the time of 8(a) application submission.

14. The business concern must not earn more than 70% of its total revenue with one single client, within the last 12 months. This does not apply to a business concern if its direct billing client is a Federal or State Government.

15. The applicant or business concern cannot have previously participated as an 8(a) participant. The applicant cannot have any immediate family members who are current or previous participants in the 8(a) Program that are or were affiliated.

These are just 15 of the “Killers” that can potentially prevent your 8(a) Certification application from being successful. There are additional “Killers” and other areas that you should be concerned with prior to making the decision on whether you fully qualify for 8(a) Certification. If you have additional questions or would like to discuss your specific business situation, please call us at 813-333-5800 or visit www.cloveer.com.

Cloveer, Inc. pre-qualifies all of its full service clients prior to preparing their 8(a Certification Application. With over 2,000 successful clients to date. Read some of our testimonials.

Where to find information on 8(a), HUBZone and Women-Owned Small Business Contracts

The most comprehensive source for information on awarded 8(a), HUBZone and Women-Owned Small Business Contracts is the Federal Procurement Data System (FPDS).

The FPDS contains historical information on contracts whose estimated value is $3,000 or more.

To gain access to this system you must register. Registration is free.

The FPDS allows you to drill down deep within the data inputted into the system and can provide you valuable information to help in your Federal Marketing efforts.

For example, you can perform the following searches within the system.

1. How much did a specific federal agency spend in the most recently government fiscal year or past years using 8(a), HUBZone or Women-Owned Small Business as the set-aside method.
2. How many 8(a) actions or contracts were awarded within a specific agency. You can also drill down to a specific department, office or region within the agency.
3. Detailed information on the awarded contract such as:

  • The solicitation number
  • Date signed or completed
  • Type of contract
  • NAICS code
  • Product or Service Description
  • Place of Performance (City, State or Zip Code)
  • Competition Information (8(a), HUBZone, Women-Owned, etc.)
  • Name of Contractor

These are just a few of the parameters that you can search on within the FPDS. All of this information can give you a leg up on your competition by allowing you to narrow your marketing efforts to ferderal clients who have purchased your products and services.

Download a report (PDF) that shows the amount spent and the number of contracts awarded with each federal agency in FY 2011.

Here is a summary:
8(a):
Number of Contracts: 117,343
Total Dollars Spent: $16,633,899,024.15

Women-Owned:
Number of Contracts: 318,937
Total Dollars Spent: $16,839,376,300.17

HUBZone:
Number of Contracts: 91,717
Total Dollars Spent: $10,001,960,445.11

For more information on 8(a) Certification, HUBzone Certification or Women-Owned Small Business Certification please call us at 813-333-5800 or visit www.cloveer.com.