The Small Business Administration's 8(a) Program was created in 1974 to help minority and other small disadvantaged businesses to grow through a program of Federal contracting preferences and set-asides.  Through the 8(a) program, eligible firms can be awarded Government contracts on a sole-source, non-competitive basis. 

Benefits of the Program

    * Participants can receive sole-source contracts, up to a ceiling of $3.5 million for goods and services and up to $5.5 million for manufacturing, including construction. While SBA helps 8(a) firms build their competitive and institutional know-how, the agency also encourages them to participate in competitive acquisitions.

    * Federal acquisition policies encourage Federal agencies to award a certain percentage of their contracts to Small Disadvantaged Businesses. To speed up the award process, the SBA has signed Memorandums of Understanding (MOUs) with 25 Federal agencies allowing them to contract directly with certified 8(a) firms.

    * 8(a) firms are permitted to form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract.

Program goals require 8(a) firms to maintain a balance between their commercial and government business. There is also a limit on the total dollar value of sole-source contracts that an individual participant can receive while in the program: $100 million or five times the value of its primary SIC code. The overall program goal is to graduate firms that will go on to thrive in a competitive business environment.


What is a small business set-aside?

A "set-aside for small business" is the reserving of an acquisition exclusively for participation by small business concerns.


When set-asides are used

Acquisition of supplies or services valued between $2,500 to $100,000 are automatically reserved exclusively for small business and shall be set aside for small business unless there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality and delivery.  Contracting Officers shall set aside any acquisition over $100,000 for small business participation when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns, and award will be made at fair market prices.


Sole Source

Used when it is determined that the anticipated award price, including options, will not exceed $5.5 million for manufacturing or $3.5 million for all other requirements, and the vendor is a responsible 8(a) with respect to performance, and the award can be made at a fair and reasonable price.


Competitive Bids

The competitive process is used when the anticipated award, including options, exceeds $5.5 million for manufacturing/construction or $3.5 million for all other requirements; it is likely that two or more qualified 8(a) certified firms would submit offers if the requirement were competed; the requirement has not been accepted by SBA for award as a sole source 8(a) procurement on behalf of a tribally-owned or ANC-owned concern; the vendor is responsible with respect to performance; the award can be made at a fair and reasonable price.