8(a) Certification?

This blog entry is in response to a request from a ventureheart.com visitor for my view of 8(a) certification. 8(a) is a certification, http://www.sba.gov/8abd/ provided by the SBA (Small Business Administration), designed to help small disadvantaged businesses compete for federal government contracts. Some federal contracts are an 8(a) set-aside, which means that only 8(a) certified firms may compete for that particular contract. A business may only remain in the 8(a) program for a maximum of nine years.

I have heard of stories where small businesses were really able to leverage the 8(a) certification and launched into successful enterprises because of their 8(a) status. I have also heard of 8(a) businesses that have been in the program for years without obtaining one 8(a) contract. Because of the latter story, I have come to realize that 8(a) is not a clear-cut solution to building a government contracting business like so many believe. Taking the nine year time limit into consideration, I believe that 8(a) is more of an option that should be used strategically, at the right time, and not without forethought.

I do not feel that it is the right time for my business to join the 8(a) program. Once we join, the clock will start ticking on our nine years. Before the timer begins, I feel that we should have several key things in place such as a prior performance record- (something that is required when bidding on a contract) so working with our current customer (Department of Defense), is helping build this record. We should also have experience doing federal bids and proposals on RFPs, RFQs, etc…instead of learning the ropes once the clock starts. Furthermore, we need to get a few other housekeeping items in place, such as organizing our accounting systems according to federal contracting standards and obtaining our facility (security) clearance. I also think that it is important for us to establish a niche, narrow our focus to a limited amount of agencies, and network within those agencies to establish strong contacts and leads before we jump in- simply being 8(a) isn’t going to get us anywhere, decision makers and contracting officers need to know who we are- it is all about who you know. People only do business with people they know- plain and simple.

I just don’t think it makes sense to start eating away at the nine year limit until all of the aforementioned steps are taken as we have already used one year ramping up and predict that we need another year to become ready. I have had this conversation with several other business owners and small business advocates within the federal government and all have confirmed that I have made a wise decision and that more small disadvantaged business owners should consider taking the same measures before joining the 8(a) program. I would love to hear feedback from anyone about their 8(a) experience.