• Credit cards
  • View all credit cards
  • Banking guide
  • Loans guide
  • Insurance guide
  • Personal finance
  • View all personal finance
  • Small business
  • View all small business
  • View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

SBA 8(a) Program: What It Is and How It Works

Olivia Chen

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

The U.S. Small Business Administration may be best known for its SBA loan program, which partially guarantees small-business loans for eligible entrepreneurs. But sponsoring loan programs is not the only way the SBA helps promote small-business owners, especially those at an economic disadvantage. The independent federal agency also sponsors business assistance programs, such as the SBA 8(a) program.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

What is the SBA 8(a) program?

The SBA 8(a) Business Development program helps socially and economically disadvantaged small-business owners secure coveted government contracts. Through the nine-year program, members can also access training and technical, financial and management assistance to help their business grow and compete for contracts.

The process of securing government contracts can be difficult and complex, especially for socially and economically disadvantaged individuals, who are competing in an economic landscape that, all too often, is stacked against them. However, if secured, government contracts are usually long term, offer good pay and timely payments, which means they can provide small-business owners with massive opportunities for growth.

According to the SBA, the federal government’s goal is to set aside at least 5% of their annual federal contracting budget to small businesses that are at least 51% owned and operated by socially and economically disadvantaged entrepreneurs.

SBA 8(a) program benefits

Benefits for businesses participating in the SBA 8(a) program include:

The opportunity to win set-aside and sole-source contracts (contracts issued to eligible businesses without competition).

Access to a dedicated expert to help navigate the government contracting process.

Mentorship from established and experienced business owners through the mentor-protégé program. 

The opportunity to participate in joint ventures with established businesses.  

Additional management and technical assistance through the SBA 7(j) program.

SBA 8(a) requirements: Who is eligible?

To qualify for the SBA 8(a) program, applying businesses must first meet the SBA’s definition of a small business. (You can use the SBA’s online Size Standards Tool to learn more.) Applicants must be U.S. citizens, and the SBA will also take into account more qualitative factors, such as character and potential for success. Also, businesses can only participate in the SBA 8(a) program once, so those that have already participated can’t reapply.

The crux of this program’s eligibility criteria is that the businesses must be at least 51% owned and controlled by economically and socially disadvantaged individuals, according to the SBA’s definition of each term.

Socially disadvantaged individuals

The SBA defines socially disadvantaged individuals as “those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities.”

The SBA also designates members of specific groups as socially disadvantaged, and therefore eligible for the 8(a) program. These groups are:

Black Americans. 

Native Americans, including Alaska Natives, Hawaii Natives or members of a federally or state recognized Indian Tribe. 

Hispanic Americans.  

Subcontinent Asian Americans. 

Asian Pacific Americans. 

For individuals who are not members of these designated groups, the SBA also recognizes social disadvantage in individuals who have an objective distinguishing feature, such as race or ethnic origin, but also gender, identifiable disability or long-term isolation from mainstream society. These disadvantages must have negatively impacted an individual’s education, employment or business history. [0] Code of Federal Regulations . Eligibility Requirements for Participation in the 8(a) Business Development Program . View all sources

Economically disadvantaged individuals

The SBA considers economically disadvantaged individuals to be “socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.”

These guidelines consider both net worth and personal income: Net worth must be less than $850,000, excluding equity in primary personal residence and funds invested in a retirement account. Personal gross income over the preceding three years must be below $400,000. Note that these exclusions for calculating net worth do not apply to asset valuation or loan applications. [0] Code of Federal Regulations . Eligibility Requirements for Participation in the 8(a) Business Development Program . View all sources

How to apply for the SBA 8(a) program

You can apply for the SBA 8(a) program online; however, the SBA also recommends meeting with a local SBA resource partner, which you can find via the SBA website.

Make sure your business is eligible

Before you can apply, make sure your business is eligible for 8(a) certification by answering some quick questions on the SBA’s certification website. These will help you understand the following:

How much the government has awarded to businesses in your industry based on your business’s NAICS code. 

If your company has the experience to begin contracting with the federal government. 

If your business is eligible based on the economic and social qualification requirements.

Gather documents

If you determine that you are eligible for the program, you can use the application checklist to begin gathering documentation. Specific documents vary based on business type (e.g., sole proprietor, LLC, S-corp), but you can generally expect to submit the following:

Ownership documents such as articles of incorporation or bylaws. 

Business financial documents like profit and loss statements, tax returns and recent contracts. 

Personal documents like proof of U.S. citizenship, your resume and personal tax returns. 

Create your System Award Management (SAM) account

To actually begin your application for the SBA 8(a) program, you will need to create a business profile at SAM.gov. This profile enables you to create your account on the certification website, where you will ultimately submit your application. If approved, you will also update this profile to show contracting officers that your business is in the 8(a) program.

Wait for a decision

The SBA will notify you through the certification website if your application is approved, which can take up to 105 days from the time you submit your application. If you are approved, your SAM profile will detail your program entry and exit dates, and your local SBA office will contact you directly to provide further details.

If you run into any questions about uploading supporting documentation online, you can reach out to [email protected] or use the certify help desk online resource. Also, note that businesses participating in the SBA 8(a) program undergo annual reviews of ownership and management documents, NAICs code and fiscal year-end information to ensure they continue to meet the 8(a) requirements. Terms last for a maximum of nine years, but both the SBA and the participating business can shorten that term.

This article originally appeared on Fundera, a subsidiary of NerdWallet.

sba 8a business plan

On a similar note...

U.S. flag

An official website of the United States government

Here’s how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

GSA Logo

  • Explore sell to government
  • Ways you can sell to government
  • How to access contract opportunities
  • Conduct market research
  • Register your business
  • Certify as a small business
  • Become a schedule holder
  • Market your business
  • Research active solicitations
  • Respond to a solicitation
  • What to expect during the award process
  • Comply with contractual requirements
  • Handle contract modifications
  • Monitor past performance evaluations
  • Explore real estate
  • 3D-4D building information modeling
  • Art in architecture | Fine arts
  • Computer-aided design standards
  • Commissioning
  • Design excellence
  • Engineering
  • Project management information system
  • Spatial data management
  • Facilities operations
  • Smart buildings
  • Tenant services
  • Utility services
  • Water quality management
  • Explore historic buildings
  • Heritage tourism
  • Historic preservation policy, tools and resources
  • Historic building stewardship
  • Videos, pictures, posters and more
  • NEPA implementation
  • Courthouse program
  • Land ports of entry
  • Prospectus library
  • Regional buildings
  • Renting property
  • Visiting public buildings
  • Real property disposal
  • Reimbursable services (RWA)
  • Rental policy and procedures
  • Site selection and relocation
  • For businesses seeking opportunities
  • For federal customers
  • For workers in federal buildings
  • Explore policy and regulations
  • Acquisition management policy
  • Aviation management policy
  • Information technology policy
  • Real property management policy
  • Relocation management policy
  • Travel management policy
  • Vehicle management policy
  • Federal acquisition regulations
  • Federal management regulations
  • Federal travel regulations
  • GSA acquisition manual
  • Managing the federal rulemaking process
  • Explore small business
  • Explore business models
  • Research the federal market
  • Forecast of contracting opportunities
  • Events and contacts
  • Explore travel
  • Per diem rates
  • Transportation (airfare rates, POV rates, etc.)
  • State tax exemption
  • Travel charge card
  • Conferences and meetings
  • E-gov travel service (ETS)
  • Travel category schedule
  • Federal travel regulation
  • Travel policy
  • Explore technology
  • Cloud computing services
  • Cybersecurity products and services
  • Data center services
  • Hardware products and services
  • Professional IT services
  • Software products and services
  • Telecommunications and network services
  • Work with small businesses
  • Governmentwide acquisition contracts
  • MAS information technology
  • Software purchase agreements
  • Cybersecurity
  • Digital strategy
  • Emerging citizen technology
  • Federal identity, credentials, and access management
  • Mobile government
  • Technology modernization fund
  • Explore about us
  • Annual reports
  • Mission and strategic goals
  • Role in presidential transitions
  • Get an internship
  • Launch your career
  • Elevate your professional career
  • Discover special hiring paths
  • Events and training
  • Agency blog
  • Congressional testimony
  • GSA does that podcast
  • News releases
  • Leadership directory
  • Staff directory
  • Office of the administrator
  • Federal Acquisition Service
  • Public Buildings Service
  • Staff offices
  • Board of Contract Appeals
  • Office of Inspector General
  • Region 1 | New England
  • Region 2 | Northeast and Caribbean
  • Region 3 | Mid-Atlantic
  • Region 4 | Southeast Sunbelt
  • Region 5 | Great Lakes
  • Region 6 | Heartland
  • Region 7 | Greater Southwest
  • Region 8 | Rocky Mountain
  • Region 9 | Pacific Rim
  • Region 10 | Northwest/Arctic
  • Region 11 | National Capital Region
  • Per Diem Lookup

STAY CONNECTED

GSA Blog Logo

The 8(a) Business Development Program - What You Need to Know

Small businesses work to create jobs, drive innovation, increase America’s global competitiveness and grow the U.S. economy. During National Small Business Week (NSBW), September 13-17, GSA is joining the Small Business Administration (SBA) to highlight the impact of outstanding small business owners from across the nation.

One important resource available to small businesses is SBA’s 8(a) Business Development program, which helps provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities. The government limits competition for certain contracts to businesses that participate in the 8(a) Business Development program.

Disadvantaged businesses in the 8(a) program can:

  • Compete for set-aside and sole-source contracts
  • Get a Business Opportunity Specialist to help navigate federal contracting
  • Form joint ventures with established businesses through the SBA's Mentor-Protégé Program
  • Receive management and technical assistance, including business training, counseling, marketing assistance, and high-level executive development

Eligibility

To qualify for the 8(a) program, follow this eligibility checklist:

  • Be a small business
  • Not have previously participated in the 8(a) program
  • Be at least 51 percent owned and controlled by U.S. citizens who are socially and economically disadvantaged
  • Have a personal net worth of $750K or less, adjusted gross income of $350K or less and $6 million or less in assets
  • Demonstrate good character and potential to perform on contracts

Get a preliminary assessment of whether the 8(a) program is right for you at the SBA's Certify website .

Before you can participate in the 8(a) Business Development program, you must be certified. Apply for the 8(a) Business Development program, at the certify.SBA.gov website.

Staying connected with the small business community will be key to our success. Outreach, such as workshops and training seminars will continue as we help small businesses navigate the federal procurement process and contribute to our nation’s economic recovery.

Join us September 29th at OSDBU’s National Small Business Training and Matchmaking event. Register now to attend Small Business Works 2021: Level Up & Network Series to learn about upcoming federal contracting opportunities and doing business with GSA, while expanding your network. This event is free and will provide you with the resources your small business needs to thrive in the Federal marketplace!

To learn more about GSA’s commitment to the small business community, follow us on Twitter @GSAOSDBU or visit GSA's Small Business website .

Other GSA Blogs

  • Challenge.gov Blog
  • CitizenScience.gov Blog
  • Code.gov Blog
  • DigitalGov Blog
  • FedRAMP Blog
  • Great Government through Technology
  • IT Accessibility Blog
  • Office of Evaluation Sciences Blog
  • USA.gov Blog

PER DIEM LOOK-UP

1 choose a location.

Error, The Per Diem API is not responding. Please try again later.

No results could be found for the location you've entered.

Rates for Alaska, Hawaii, U.S. Territories and Possessions are set by the Department of Defense .

Rates for foreign countries are set by the State Department .

2 Choose a date

Rates are available between 10/1/2021 and 09/30/2024.

The End Date of your trip can not occur before the Start Date.

Traveler reimbursement is based on the location of the work activities and not the accommodations, unless lodging is not available at the work activity, then the agency may authorize the rate where lodging is obtained.

Unless otherwise specified, the per diem locality is defined as "all locations within, or entirely surrounded by, the corporate limits of the key city, including independent entities located within those boundaries."

Per diem localities with county definitions shall include "all locations within, or entirely surrounded by, the corporate limits of the key city as well as the boundaries of the listed counties, including independent entities located within the boundaries of the key city and the listed counties (unless otherwise listed separately)."

When a military installation or Government - related facility(whether or not specifically named) is located partially within more than one city or county boundary, the applicable per diem rate for the entire installation or facility is the higher of the rates which apply to the cities and / or counties, even though part(s) of such activities may be located outside the defined per diem locality.

SBA 8(a) program: How to qualify and apply

Advertiser disclosure.

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.

Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

How We Make Money

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

  • Share this article on Facebook Facebook
  • Share this article on Twitter Twitter
  • Share this article on LinkedIn Linkedin
  • Share this article via email Email

A man and woman smiling and reviewing information on a tablet.

  • Connect with Emily Maracle on LinkedIn Linkedin

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy.

Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.

Editorial integrity

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

Key Principles

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Editorial Independence

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.

We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

While the Small Business Administration (SBA) offers a variety of government-backed business loans , the 8(a) program is different.

Primarily, the 8(a) program is not a loan. It is a service that helps small businesses access government contracts. And it is specifically designed for those who belong to historically disadvantaged groups. It may have similar requirements to business loans , but your business won’t receive any money or need to pay anything to participate.

The application process is lengthy, but qualifying for the 8(a) program will give your business the opportunity to compete for government contracts and unique mentorship opportunities.

What is the SBA 8(a) program?

At least 5 percent of all federal contracts go toward small disadvantaged businesses each year. The 8(a) Business Development program is designed by the SBA to help businesses secure these government contracts, giving your business an edge when competing for contracts under any U.S. agency or department.

To qualify, a business must be at least 51 percent owned and operated by socially and economically disadvantaged people. These are defined by the Code of Federal Regulations (CFR).

  • Socially disadvantaged individuals “have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control.”
  • Economically disadvantaged individuals are “socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.”

Your business must be certified by the SBA before you can participate. If each owner qualifies and the business meets other requirements, it will give your business preference for government contracts.

The 8(a) program lasts nine years. The first four years are a developmental stage to build your business and train owners, and the last five years are a transitional stage to help you maintain momentum once the program ends.

Your business will have access to training and technical assistance during the 8(a) program, including assistance for management, technical, financial and procurement issues. There is also one-on-one development assistance from the federal government and mentorship from established firms through the SBA Mentor-Protégé program.

Pros and cons of the SBA 8(a) certification

Although the 8(a) program does have a lengthy application process and limits what businesses qualify, the benefits of joining will likely outweigh the time it takes to apply.

  • Exclusive federal contracts. Participating in the 8(a) program will make your business eligible for sole source and set-aside contracts with the government.
  • One-on-one development assistance. The 8(a) program gives your business access to experts in compliance and regulations and one-on-one assistance.
  • Management and technical assistance training. Businesses in the 8(a) program can access the Management and Technical Assistance program, which provides training to make your business more competitive when applying for government contracts.
  • Mentorship with established businesses. Through the SBA Mentor-Protégé program , your business can access advice from experienced government contractors.
  • Continual development assistance. Although the SBA considers only the first four years a development stage, you will have access to development and transition help over the entire nine-year program.
  • Lengthy application process. You must submit the usual business documents , register with the federal government and provide a variety of forms and information to confirm your eligibility.
  • Limited eligibility. Your small business must meet SBA size standards in addition to meeting other certification requirements to qualify for the 8(a) program.
  • One-time eligibility. The SBA only allows businesses to certify and participate in the program once. After your business has completed the nine-year development term, it will need to pursue other options.
  • Annual review required. Your business — and its owners — must continue to meet the eligibility criteria every year. This is done by re-certifying, which will require time and paperwork.

SBA 8(a) certification requirements

To qualify, your business must meet time in business and size standards in addition to being majority owned by someone in a socially and economically disadvantaged group.

  • Size: Your business must meet SBA size standards for its NAICS classification.
  • Ownership: At least 51 percent of your business must be owned and controlled by socially and economically disadvantaged U.S. citizens.
  • Time in business: The SBA requires at least two years in business.
  • Personal finances: Owners must have a personal net worth of $850,000 or less, an adjusted gross income of $400,000 or less and assets totaling less than $6.5 million.
  • Good character: Business owners must “demonstrate good character” to qualify. But the SBA does not provide details on what this involves.
  • SBA microloans
  • Grants for women
  • Grants for veterans
  • Grants for minorities
  • Business loans for minorities

How to apply for the SBA 8(a) program

The application process for the 8(a) program is lengthy and requires a significant amount of paperwork. But once submitted, you should receive a decision within 90 days.

  • Determine if your business is eligible for the 8(a) program.
  • Look up your NAICS code(s) .
  • Register for the System for Award Management (SAM) .
  • Gather supporting documentation.
  • Prepare a narrative, similar to a business plan, describing your business and its structure.
  • Review the 8(a) application checklist for required documents and information.
  • Complete the 8(a) application and submit supporting documentation.

The SBA will then review and process your application. Your decision result will be available through SAM.

The bottom line

The 8(a) program does require a significant amount of time and resources to apply for. But the benefit of qualifying for government contracts — and accessing other resources — can help your business grow over the nine years you are involved with the SBA.

Frequently asked questions

Can you lose 8(a) certification, what are the income limits for the sba 8(a) program.

  • A personal net worth of $850,000 or less
  • An adjusted gross income of $400,000 or less
  • Assets totaling $6.5 million or less

What is the difference between a small business and an 8(a) certified business?

Related articles.

A Sikh man and woman review documents with a loan officer.

SBA loan guide: What they are and how to apply

A businesswoman helps her employees package shoes for shipping.

What are SBA Community Advantage Small Business Lending Companies?

A coffeeshop owner serves coffee to a couple.

What is the SBA 7(a) loan program?

Two small business owners apply for funding.

SBA 7(a) loans: How to qualify and apply

Schwabe

On April 27 th , the U.S. Small Business Administration (“SBA”) published a final rule making changes to the regulations governing the 8(a) program. This final rule is SBA’s implementation of the proposed rules issued by the SBA on September 9, 2022 . The final rule largely implements the proposed rules, with some minor modifications. The final rule is currently scheduled to go into effect on May 27, 2023, and shall apply to all solicitation issued on or after that date.

The following is the SBA’s opening summary:

This final rule makes several changes to the ownership and control requirements for the 8(a) Business Development (BD) program, including recognizing a process for allowing a change of ownership for a former Participant that is still performing one or more 8(a) contracts and permitting an individual to own an applicant or Participant where the individual can demonstrate that financial obligations have been settled and discharged by the Federal Government. The rule also makes several changes relating to 8(a) contracts, including clarifying that a contracting officer cannot limit an 8(a) competition to Participants having more than one certification and clarifying the rules pertaining to issuing sole source 8(a) orders under an 8(a) multiple award contract. The rule also makes several other revisions to incorporate changes to SBA’s other government contracting programs, including changes to implement a statutory amendment from the National Defense Authorization Act for Fiscal Year 2022, to include blanket purchase agreements in the list of contracting vehicles that are covered by the definitions of consolidation and bundling, and to more clearly specify the requirements relating to waivers of the nonmanufacturer rule.

The SBA’s final rule, and revised regulations, largely follow the proposed rules published in September of 2022 . The SBA, however, did make changes and clarifications to some of the proposed regulations and declined to proceed with others.

The following discussion focuses on summarizing those new regulations that may be of interest to Alaska Native Corporations, Tribes, or Native-Hawaiian Organizations. Later updates will be provided focusing on the changes that are limited to individually-owned entities, as well as more in-depth discussions and analysis of particular amendments, including changes to the bona-fide place of business regulations, the ostensible subcontractor rule, joint ventures, and size determinations (and sole source awards) in the context of orders under multiple award contracts.

Community Benefits Plan ( § 124.604 and 124.108)

In its proposed rule, the SBA sought to add a requirement that each entity having one or more Participants in the 8(a) BD program establish a Community Benefits Plan that outlines the anticipated approach it expects to deliver to strengthen its Native or underserved community over the next three or five years. The ANC, Tribal, and NHO community strongly opposed this proposed new requirement at five different tribal consultations, and the SBA received 35 comments further opposing any changes to the benefits reporting requirements and imposing a new Community Benefits Plan requirement.

The SBA withdrew the proposed new rule, noting that “[d]uring the last tribal consultation in Washington, DC, SBA announced that it would not finalize anything new pertaining to benefits reporting. As such, this final rule does not adopt any new language to § 124.604 or any new language to § 124.108 dealing with benefits or benefits reporting.”

Bona Fide Place of Business Requirements ( § 124.501(k))

The SBA refused to eliminate the bona fide place of business requirement, explaining that it believed it was required to maintain it under Section 8(a)(11) of the Small Business Act, which requires that, to the maximum extent practicable, 8(a) construction contracts “shall be awarded within the county or state where the work is to be performed.”

The SBA also noted that it had issued a moratorium on enforcement of the bona fide place of business rule until September 30, 2023. The SBA did not commit to extending that moratorium, but stated that it would continue

“to examine the practicality of the rule considering economic realities. Once the conditions exist that demonstrate that it is no longer impracticable to require a bona fide place of business, SBA will again implement the statutory provision to do so with respect to all construction requirements offered to the 8(a) program…. Before the expiration of the moratorium, SBA will examine workplace realities. If telework policies and other economic conditions continue to make requiring a bona fide place of business impracticable, SBA will again extend the moratorium”.

The SBA did add several clarifications to the bona fide place of business requirements for 8(a) contracts:

  • An 8(a) entity with a bona fide place of business anywhere in a particular state is eligible for a construction contract throughout that entire state (even if the state is serviced by more than one SBA district office).
  • An 8(a) entity having an approved bona fide place of business in one state is eligible for work in a contiguous state. The SBA gave the following example, based on an 8(a) entity that has a bona fide office in Virginia, but does not have a bona fide office in North Carolina:

The language of the rule states that a firm will be eligible for work that will be performed in the geographical area serviced by a contiguous SBA district office to where the firm has a bona fide place of business (in addition to stating a firm will be eligible for work anywhere in a state in which the firm has a bona fide place of business). There are two SBA district offices servicing Virginia: the Washington Metropolitan Area District Office services northern Virginia and the Richmond District Office services the rest of Virginia. North Carolina has only one SBA district office, so any district office whose geographic area touches any part of North Carolina will be eligible for any 8(a) construction contract anywhere in the entire state. Only the geographic area serviced by the Richmond District Office touches North Carolina. As such, a firm having a bona fide place of business in the geographic area serviced by the Richmond District Office will be eligible for 8(a) construction contracts in North Carolina. Firms having a bona fide place of business in the geographic area serviced by the Washington Metropolitan Area District Office will be not eligible because the geographic area serviced by that office is not contiguous to that of the area serviced by the North Carolina District Office.

  • An 8(a) entity currently performing a contract in a specific state qualifies as having a bona fide place of business in that state for one or more additional contracts. The SBA explained that “[t]his clarification is specifically intended to apply to the situation where a business concern is performing a construction contract in a specific location, the procuring activity like the work done by the business concern and seeks to award an 8(a) construction contract to the same business concern in the same location as the previous contract.”

This exemption, however, is limited to only the state where the 8(a) entity is currently performing a contract. An 8(a) entity could not use contract performance in one state to allow it to be eligible for an 8(a) contract in a contiguous state unless the 8(a) entity officially establishes a bona fide place of business in the location in which it is currently performing a contract (or in that contiguous state or another state touching that contiguous state).

  • An 8(a) entity can establish a bona fide place of business through a full-time employee in a home office, defined as an employee working at least 20 hours a week in that location. The individual designated as the full-time employee of the 8(a) entity seeking to establish a bona fide place of business in a specific geographic location need not be a resident of the state where he/she is conducting. Nor is there a requirement that the individual permanently reside in that location. An 8(a) entity merely needs to demonstrate that one or more employees are operating in an office within the identified geographic location and can rotate employees in and out of a specific location as it sees fit, as long as one individual (but not necessarily the same individual) remains at that location.
  • For a single award 8(a) construction contract requiring work in multiple locations, an 8(a) entity is eligible if it has a bona fide place of business where a majority of the work is to be performed. This will be determined by the dollar value (including anticipated dollar value for indefinite quantity contracts) of the work to be performed.
  • For a multiple award 8(a) construction contract, an 8(a) entity must have a bona fide place of business in any location where work is to be performed.

Ostensible Subcontractor Rule (redesignated §121.103(h)(3))

The SBA adopted language clarifying that, for construction contracts, the primary and vital requirements of the contract, which must be performed by the small business prime contractor, are to supervise, oversee, manage, and schedule the work on a contract, including coordinating the work of various subcontractors, and not to the actual construction or specialty trade construction work.

The SBA also clarified the rule to make it clear that the limitations on contracting provisions do not override the ostensible subcontractor rule. The intent was to clarify that a small business cannot perform 15 percent of the contract but subcontract out all the supervision and oversight responsibilities to another business entity.

SBA also adopted new language addressing the factors the SBA will apply when considering the ostensible subcontractor rule. Specifically, SBA adopted two of the four factors considered in a test created by Office of Hearings and Appeals (OHA) in the case Size Appeal of Dover Staffing, Inc., SBA No. SIZ-5300 (2011). The four factors from that case are:

  • the proposed subcontractor is the incumbent contractor and ineligible to compete for the procurement,
  • the prime contractor plans to hire the large majority of its workforce from the subcontractor,
  • the prime contractor’s proposed management previously served with the subcontractor on the incumbent contract, and
  • the prime contractor lacks relevant experience and must rely upon its more experienced subcontractor to win the contract.

The two factors from this test that the SBA expressly adopted are: whether the prime contractor’s proposed management previously served with the subcontractor on the incumbent contract, and whether the prime contractor lacks relevant experience and must rely upon its more experienced subcontractor to win the contract.

The SBA also made it clear that these are only factors to consider, and that no single factor is determinative:

SBA agrees that the ultimate determination in every case depends upon who is performing the primary and vital requirements of a contract or order and whether a prime contractor is unusually reliant on a subcontractor. SBA also agrees that no factor is determinative and that a prime contractor should be able to use the experience and past performance of its subcontractors to strengthen its offer, even where a subcontractor is the incumbent contractor. As with the existing rule, SBA intends to consider all aspects of the prime contractor’s relationship with the subcontractor and would not limit its inquiry to any enumerated factors. SBA continues to believe that the SBA Area Offices should be given discretion to consider and weigh all factors in rendering a formal size determination, and that unique circumstances could lead to a result that does not fully align with the Dover Staffing analysis. That being said, SBA believes that identifying factors that can be considered is helpful to contractors. As such, the final rule retains factors that SBA may consider but adds a provision identifying that no single factor is determinative. The final rules also specifically clarifies that a prime contractor may use the experience and past performance of a subcontractor to enhance or strengthen its offer, including that of an incumbent contractor. It also re-enforces that it is only where that subcontractor will perform primary and vital requirements of a contract or order, or where the prime contractor is unusually reliant on the subcontractor, that SBA will find the subcontractor to be an ostensible subcontractor.

Limitations on Subcontracting (§ 125.6)

The SBA adopted language providing that, on a multiagency set-aside contracts, where more than one agency can issue orders under the contract, compliance with the applicable limitations on subcontracting will be measured order by order by each ordering agency.

The SBA also added language providing that a contracting officer cannot give a satisfactory/positive past performance evaluation for the appropriate evaluation factor or subfactor to a contractor on any set-aside contract (small business set-aside; 8(a); WOSB; HUBZone; or SDVOSB) that the contracting officer determined did not meet the applicable limitation on subcontracting requirement at the conclusion of contract performance. The final rule, however, also gives the small business contractor the opportunity to explain and demonstrate that the failure to meet the limitations on subcontracting requirements was outside of the contractor’s control:

Whenever a contracting officer determines at the conclusion of contract performance that a small business did not meet the applicable limitation on subcontracting on any set-aside contract, the final rule would first give the business concern the opportunity to explain contributing circumstances that negatively impacted its ability to do so. The final rule adds language authorizing a contracting officer to give a satisfactory or positive past performance evaluation for the appropriate evaluation factor or sub-factor to a contractor that did not meet the applicable limitation on subcontracting requirement where the contracting officer determines that the reason for noncompliance was outside of the firm’s control and an individual at least one level above the contracting officer concurs with that determination. Examples of extenuating or mitigating circumstances that could lead to a satisfactory/positive rating include, but are not limited to, unforeseen labor shortages, modifications to the contract’s scope of work which were requested or directed by the Government, emergency or rapid response requirements that demand immediate subcontracting actions by the prime small business concern, unexpected changes to a subcontractor’s designation as a similarly situated entity (as defined in § 125.1), differing site or environmental conditions which arose during the course of performance, force majeure events, and the contractor’s good faith reliance upon a similarly situated subcontractor’s representation of size or relevant socioeconomic status. The contracting officer could not rely on any circumstances that were within the contractor’s control, or those which could have been mitigated without imposing an undue cost or burden on the contractor. Without this discretionary authority, SBA agrees that long-term deleterious consequences could result to otherwise well-performing small business prime contractors.

8(a) Business Activity Targets ( § 124.509)

8(a) entities may not be eligible to receive sole source 8(a) awards if they are not meeting their applicable 8(a) business activity targets, unless the 8(a) entity is making good faith efforts to meet those targets The final rule adopted language clarifying what constitutes good faith efforts:

  • Demonstrating that the 8(a) entity submitted offers for one or more non-8(a) procurements which, if awarded during its just completed program year, would have given the 8(a) entity sufficient revenues received during that year to achieve the applicable non-8(a) business activity target for its just completed program year, or
  • Identify extenuating circumstances that adversely impacted its efforts to obtain non-8(a) revenues, such as (but not limited to) a reduction in government funding, continuing resolutions and budget uncertainties, increased competition driving prices down, or having one or more prime contractors award less work to the 8(a) entity than originally contemplated.

Additionally, the SBA determined that, instead of changing the regulations to require 8(a) entities to submit interim financial statements for purposes of evaluating the entity’s compliance with business activity targets when a program year did not match the entity’s fiscal year, the SBA will continue to allow 8(a) entities to estimate as best they can program year revenues for both 8(a) and non-8(a) activities. The SBA concluded that “it could be burdensome on some businesses to report sales estimates based on interim reporting periods spanning different fiscal years where they do not currently prepare interim quarterly statements.” However, 8(a) entities are given the option to provide program year sales reporting based on entity’s interim financial statement figures, which may be prepared in-house.

8(a) Business Development Plans ( § 124.402; § 124.403)

The final language clarifies that the SBA must approve an 8(a) entity’s business plan before the firm is eligible to receive 8(a) contracts. However, the new language also prioritized business plan approval for any firm that is offered a sole source 8(a) requirement or is the apparent successful offeror for a competitive 8(a) requirement. The SBA noted:

Currently, SBA generally performs an eligibility determination (either for a sole source offering or a competitive award) within five days, unless SBA seeks and a procuring agency agrees to a longer period. SBA’s intent is to review and approve business plans within that same five-day period. Thus, SBA does not envision any additional time being added to the normal eligibility review timeframe.

The SBA also clarified that 8(a) entities do not need to submit a business plan each year if nothing has changed in that plan. An 8(a) entity must submit a new or modified business plan only if its business plan has changed from the previous year.

Sole Source 8(a) Awards Under MACs and Business Activity Targets ( § 124.509)

The SBA adopted language providing that compliance with 8(a) business activity target requirements will be considered before SBA will accept a sole source 8(a) order on behalf of a specific 8(a) entity under a multiple award contract. Similarly, where an agency seeks to issue a sole source order to a joint venture, the SBA will review and determine whether the lead 8(a) partner to the joint venture is in compliance with any applicable competitive business mix target established or remedial measure. Therefore, 8(a) entities will have to be in compliance with their BAT targets to receive a sole source award under a MAC, at the time of award and including when they are members of a joint venture.

Determination of Size for 8(a) Sole Source Contracts Under Multiple Award Contracts ( § 121.404 )

The SBA adopted language clarifying that an 8(a) entity must still be small when awarded a sole source 8(a) order under a MAC, even if the 8(a) was small when it initially received the MAC. Accordingly, firms that have graduated from or otherwise left the 8(a) program are not eligible for any 8(a) sole source orders under a MAC. The SBA explained that “[it] has always been SBA’s interpretation of its statutory authority that a firm must be an eligible Participant on the date of any 8(a) sole source award. As noted, an eligibility determination includes size.”

Determination of Size for Multiple Award Contracts ( § 121.404 )

The SBA adopted language clarifying that for orders issued under any contract set aside for small business, size will be determined at the time of offer for the multiple award contract and not at the time of each individual order unless a contracting officer requests size recertification with respect to an individual order.

The SBA, however, rejected requests by commentators to apply the same rule to orders under unrestricted MACs that are set aside for small businesses, reasoning that the first time that the size of a concern is important in the context of unrestricted MACs is when an order under that MAC is set aside for small businesses:

A firm’s status as a small business does not generally affect whether the firm does or does not qualify for the award of an unrestricted multiple award contract. As such, competitors are very unlikely to protest the size of a concern that self-certifies as small for an unrestricted multiple award contract. In SBA’s view, when a contracting officer sets aside an order for small business under an unrestricted multiple award contract, the order is the first time that size status is important because competition is being limited under the contract. That is the first time that some firms will be eligible to compete for the order while others will be excluded from competition because of their size status. SBA never intended to allow a firm’s self-certification for the underlying unrestricted multiple award contract to control whether a firm is small at the time of an order is set-aside for small business years after the multiple award contract was awarded. These few commenters believed that SBA attempted to retroactively change the rules pertaining to previously awarded unrestricted multiple award contracts. SBA disagrees. Small business set-aside orders under unrestricted vehicles are completely discretionary. When a contracting officer exercises this discretion, Federal Acquisition Regulation (FAR, Title 48 of the Code of Federal Regulations) Part 19 and SBA rules apply and change the eligibility requirements of the contract for that order. For example, the contractor must comply with the applicable limitations on subcontracting for that order (whereas the limitations on subcontracting do not generally apply to unrestricted contracts). When a procuring agency for the first time decides to set aside a specific order under an unrestricted multiple award contract for small business, the agency is making an exception to the fair opportunity regularly provided to all the contract holders to be considered for each order under the unrestricted contract. Thus, it follows that a business concern must qualify as small for an order set aside for small business under SBA’s regulations in effect at the time of the order to ensure that the exception is applied appropriately at the order level because being a small business concern was not a requirement for any awardees under the unrestricted contract and verifying awardees’ size status was not prerequisite to awarding the unrestricted contract. Moreover, the applicable size standard for any specific order set-aside for small business would be the one currently codified in SBA’s regulations (not the one that was in effect at the time the underlying multiple award contract was awarded). All firms that self-certified as small for the underlying multiple award contract will continue to be considered to be small businesses for goaling purposes for all orders issued under the multiple award contract on an unrestricted basis.

The SBA’s rejection of the request to permit small businesses to qualify for small businesses set-asides under unrestricted MACs based on their size at the time of award of the MAC, as opposed to the order under the MAC, is a helpful reminder that, for small business set asides under an unrestricted MAC, the offeror must be small:

  • at the time of offer in regards to the order, and
  • under the size standard applicable at the time of the offer, and not the size standard applicable at the time of award of the MAC

Sole Source Awards Joint Ventures Under an 8(A) Multiple Award Contract ( § 121.513)

The SBA clarified that a the sole source order can be issued to an 8(a) joint venture under a 8(a) MAC more than two years after the date the joint venture received its first contract award. Nor will the SBA have to review and approve a joint venture where the joint venture had already been awarded a competitive 8(a) MAC and is seeking a sole source 8(a) order under that MAC at some point during the performance period of the contract.

8(a) Awards and Federal Supply Schedule

The SBA clarified that the GSA’s procedures for issuing orders under the Federal Supply Schedule (FSS) should be used when an agency seeks to issue an 8(a) award under the FSS. The SBA also explained that, “An agency need not open the order up to competition among all FSS contract holders claiming 8(a) status. However, an agency must consider the quote from any FSS contract holder claiming 8(a) status who submits one. As with 8(a) orders issued under unrestricted multiple award contracts, however, the apparent successful offeror for an 8(a) order under the FSS must be an eligible Participant as of the initial date specified for the receipt of offers contained in the request for quote, or at the date of award of the order if there is no solicitation.”

Joint Ventures ( §121.103(h))

The SBA reorganized the introductory paragraph and added a new § 121.103(h)(1) to make the introductory paragraph more understandable.

The SBA also adopted language clarifying that the award of contracts and orders to joint ventures by adding a sentence to section 121.103(h) stating that orders may be issued under previously awarded IDIQ/MAC contract in years 3, 4, 5, etc. of an IDIQ/MAC. This was added because the restriction on awarding contracts to joint ventures more than two years after the joint venture receives its first award only applies to “additional contracts, not continued performance on contracts already awarded.” Therefore, a joint venture that receives an IDIQ/MAC can receive orders under that contract for the lifetime of that contract.

The SBA also updated section 121.103 to state that the restriction on populated joint ventures only applies to contracts set aside or reserved for small business—i.e., small business set-aside, 8(a), women-owned small business (WOSB), HUBZone, and service-disabled veteran-owned small business (SDVOSB) contracts.

The rule also added language stating that a populated joint venture can be awarded a contract set aside for small business where each of the partners to the joint venture are similarly situated (e.g., both partners to a joint venture seeking a HUBZone contract were certified HUBZone small business concerns). However, any time the size of a populated joint venture is questioned, the rule provides that the SBA will aggregate the revenues or employees of all partners to the joint venture and the joint venture will qualify as small only where the parties to the joint venture meet the applicable size standard in the aggregate. As such, populated joint ventures can qualify for small business set asides only if (1) both members of the populated joint venture are small or qualify for the set aside, and (2) the combined revenue or employees of both of the members of the populated joint venture are less than applicable size standard.

The SBA justified this approach by concluding that a populated joint venture is not a company formed for a limited purpose and duration, unlike unpopulated joint ventures:

SBA has consistently stated its view that a joint venture is not an on-going business entity, but rather something that is formed for a limited purpose and duration. If two or more separate business entities seek to join together through another entity on a continuing, unlimited basis, SBA views that as a separate business concern with each partner affiliated with each other. Where two or more parties form a separate business entity (e.g., a limited liability company or partnership) and populate that entity with employees intended to perform work on behalf of that entity, SBA similarly views that as an ongoing business entity and will aggregate the receipts/employees of the parties that formed the separate business entity in determining its size.

Guidance Regarding What Decisions Non-Managing Partners To A Joint Venture Can Participate In (§ 125.8)

The SBA adopted language specifically stating that a joint venture operating agreement or joint venture agreement may provide that the non-managing venturer’s approval is required before beginning litigation on behalf of the joint venture. The SBA explained that “A joint venture is a mutual agreement between joint venture partners to combine resources for a specific contract or contracts, and litigation is sometimes required to protect those resources. Litigation on behalf of the joint venture is a decision that carries significant risk for both partners and as a result, it is unreasonable and outside the bounds of customary commercial practices to limit that decision to only one partner.”

The SBA also clarified that the decision over whether a joint venture should pursue a particular contract opportunity is also something that a joint venture operating agreement or joint venture agreement can require the consent of a non-managing venturer:

Similarly, SBA believes that requiring the concurrence of a non-managing joint venture partner in deciding what contract opportunities the joint venture should seek is also something that would be commercially customary. The partners to a joint venture have formed a joint venture in order to seek contract opportunities. Since the parties will be jointly and severally liable for any contracts awarded to the joint venture, it makes sense that all parties to the joint venture should have a say in what opportunities the joint venture pursues. The final rule adds language specifying that a non-managing venturer’s approval may be required in determining what contract opportunities the joint venture should seek and in initiating litigation on behalf of the joint venture.

The SBA also stated in the final rule that this language is not intended to limit the decisions in which a non-managing partner may participate in, but rather is illustrative of the right of non-managing partners to engage in “corporate governance activities and decisions of the joint venture that SBA believes non-managing venturer participation is commercially customary.”

Receipts/Employees Attributable To Populated Joint Venture Partners (Redesignated § 121.103(H)(4))

For populated joint ventures, SBA adopted language providing that revenues should be divided by ownership interest, regardless of the joint venture partners’ actual share of the work

Where a joint venture is populated, each individual partner to the joint venture does not perform any percentage of the contract – the joint venture entity itself performs the work. As such, revenues cannot be divided according to the same percentage as work performed because to do so would give each partner $0 corresponding to the 0% of the work performed by the individual partner. In such a case, SBA believes that revenues must be divided according to the same percentage as the joint venture partner’s percentage ownership share in the joint venture.

Recertification of Size by Joint Ventures (§ 121.404g))

The SBA added language providing that a joint venture can recertify its status as a small business where all parties to the joint venture qualify as small at the time of recertification, or the protégé small business in a still active mentor-protégé joint venture qualifies as small at the time of recertification. The new language also clarifies that recertification by a joint venture is not a new contract award, and thus can occur even if its timing is more than two years after the joint venture received its first contract.

Eligibility Determination For Joint Ventures in Competitive Procurements ( § 124.501(g))

The SBA clarified that where a joint venture is the apparent successful offeror in connection with a competitive 8(a) procurement, SBA will determine whether the 8(a) partner to the joint venture is eligible for award but will not review the joint venture agreement to determine compliance with § 124.513 (“Under what circumstances can a joint venture be awarded an 8(a) contract?”) This lack of review of the joint venture agreement also applies where a joint venture is offered a sole source order under a previously awarded competitive 8(a) multiple award contract:

SBA also proposed to clarify that where a joint venture is the apparent successful offeror in connection with a competitive 8(a) procurement, SBA will determine whether the 8(a) partner to the joint venture is eligible for award but will not review the joint venture agreement to determine compliance with § 124.513. SBA believes that there was some confusion as to what an eligibility determination entailed in the context of a competitive 8(a) joint venture apparent successful offeror. The proposed rule sought to make clear that SBA’s determination of eligibility relates solely to the 8(a) partner to the joint venture and does not represent a full review of the 8(a) joint venture under § 124.513. SBA received three comments supporting this clarification regarding the eligibility of a joint venture offeror, and no comments opposing it. One commenter also requested clarification as to whether a review of the joint venture agreement is required where a joint venture is offered a sole source order under a previously awarded competitive 8(a) multiple award contract. SBA does not believe that SBA should review the joint venture agreement itself in this context. The underlying contract is an 8(a) competitive award. SBA’s regulations do not require review of joint venture agreements with respect to 8(a) competitive awards. Once awarded, SBA does not believe it should review joint venture agreements in connection with one or more individual sole source orders under the 8(a) multiple award contract.

Removal From Competition To Award To Entity-Owned 8(A) (§ 124.506(B)(3))

Section 124.506(b)(2) provides that a procurement may not be removed from competition to award it to a Tribally-owned, ANC-owned or NHO-owned concern on a sole source basis. The SBA explained that this provision was meant to apply only to a current procurement, not the predecessor to a current procurement, such that a follow-own requirement to an 8(a) contract can be awarded on a sole source basis to an entity-owned firm.

The final rule clarifies that:

A procuring agency may not evidence its intent to fulfill a requirement as a competitive 8(a) procurement, through the issuance of a competitive 8(a) solicitation or otherwise, cancel the solicitation or change its public intent, and then procure the requirement as a sole source 8(a) procurement to an entity-owned Participant. A follow-on procurement is a new contracting action for the same underlying requirement, and if the procuring agency has not evidenced a public intent to fulfill it as a competitive 8(a) procurement it can be fulfilled on a sole source basis to an entity-owned Participant.

The SBA declined to adopt language requiring SBA to consider the effect that losing an opportunity to compete for a follow-on contract would have on an incumbent’s business development where the follow-on procurement is offered to SBA as a sole to entity-owned 8(a). The SBA explained that “a specific regulatory change is not needed to capture SBA’s role in ensuring that the business development purposes of the 8(a) BD program are served.”

Performance of Work Requirements (§ 125.8(b)(2)(xii) and § 125.8(h)(2))

In response to commenter requests, SBA clarified the schedule for the submission of a performance-of-work reports: first, at the completion of the contract; and second, whenever requested to do so by SBA or the contracting officer prior to completion of the contract.

Release of Follow-Own Requirements From the 8(a) program

The SBA clarified that it will not always release a requirement from the 8(a) program if the procuring activity agrees to procure the requirement as a small business, HUBZone, SDVO small business, or WOSB set-aside. Instead, the SBA will have the discretion to do so. The SBA explained that while the fact that a “procuring activity agrees to procure the requirement as a small business, HUBZone, SDVO small business, or WOSB set-aside is a positive factor for release, but SBA must still consider any adverse consequences to an incumbent 8(a) Participant.”

The SBA also clarified that release may occur whenever a procuring agency identifies a procurement strategy that would emphasize or target small business participation, and explained that the SBA was rejecting “a strict reading of the rule would not allow release where an agency seeks to award a follow-on requirement as a set-aside order under a multiple award contract that is not itself a set-aside contract.” The SBA stated that “[a]s long as an agency identifies a procurement strategy that would target small businesses for a follow-on procurement, release may occur.”

Size Protests ( § 121.1001)

The SBA revised the regulations governing who can file a size protest so that it is consistent across all of the small business programs (i.e. 8(a), HUBZone, WOSB, and SDVOSB programs). The revised language adopts the language currently pertaining to small business set-asides and competitive 8(a) contracts to all of SBA’s programs. Thus, any offeror that the contracting officer has not eliminated from consideration for any procurement-related reason could initiate a size protest in each of those programs.

The adopted language also confirms that a firm determined to be ineligible for a competitive 8(a) award based on size to request a formal size determination.

In the case of sealed bids, the SBA also adopted language that, where an identified low bidder is determined to be ineligible for award, a protest of any other identified low bidder would be deemed timely if received within five business days after the contracting officer has notified the protestor of the identity of that new low bidder. This addresses the situation where a low bidder is timely protested and found to be ineligible, the procuring agency identifies another low bidder, and an interested party seeks to challenge the size or socioeconomic status of the newly identified low bidder. In such a situation, the new low bidder is identified well beyond five days of bid opening, and, under the prior version of the regulations, an interested party could no longer file a timely protest (i.e., one within five days of bid opening).

The SBA also addressed size protests after agency corrective action. Under the new regulation, where an agency decides to reevaluate offers as a corrective action in response to a size protest that may result in a new apparent successful offeror, the SBA will dismiss any pending size protest. When offerors are made aware of the new or same apparent successful offeror after reevaluation, the revised language authorizes them to again have the opportunity to protest the size of the apparent successful offeror within five business days after such notification. This applies to an agency level protest, a protest at GAO or a case filed regarding the affected procurement at the Court of Federal Claims.

If the agency demonstrates to the SBA that the corrective action will not change the apparent successful offeror, the SBA will not dismiss the size protest and will proceed with resolving it.

Determination of Size After Sale or Acquisition ( § 121.404 )

The SBA also clarified that, after the sale or purchase of an ownership interest in a small business, recertification of size is required only where the sale or acquisition results in a change in control or negative control of the concern. Recertification is not required where small sales or acquisitions of stock that do not appear to affect the control of the selling or acquiring firm occur.

Updates to Size Status in SAM.gov (§§ 121.1009(g)(5), 126.503(a)(2), 127.405(d), and 128.500(d))

Section 863 of the National Defense Authorization Act for Fiscal Year 2022 (NDAA FY22), Pub. Law 117-81, requires small businesses to update their size status in SAM.gov no later than two days after a final determination by SBA that the concern does not meet the size or socioeconomic status requirements that it certified to be. The final rule adopts regulations implementing this requirement across all of the SBA’s small business programs. The new regulations also clarified that “[i]f a participant or applicant has appealed SBA’s determination, the two-day requirement does not apply until OHA issues a final decision finding the firm ineligible. If there is no appeal available, the two-day requirement applies immediately after the firm receives SBA’s determination that the firm is ineligible. If an appeal is available but the firm ultimately chooses not to appeal the decision, the two-day requirement applies immediately after the right to appeal lapses.”

In adopting this rule, the SBA also addressed what happens if an 8(a) participant fails to update their SAM.gov status to reflect that they have been determined to be other than small, or fails to notify agencies of that change in their size status, while a firm has a pending offer. The SBA explained that:

Failure to do so in that instance could lead to protests or penalties. Initiating a debarment or suspension action depends on the facts. If the only thing a firm did was not change its status in SAM.gov within two days, SBA does not believe that would be sufficient cause for debarment or suspension. Failure to notify contracting officers on pending procurements of a firm’s change in status could be if SBA believed there was an intent to misrepresent the firm’s status in order to win an award. Submitting offers for new set-aside awards would be. Similarly, failure to take timely action to allow an SBA status change to be reflected on the firm’s SAM.gov profile could also be grounds for government-wide debarment or suspension if SBA believed that the firm’s failure to accept the change was an intent to conceal the status change or otherwise deceive procuring agencies of its current status. SBA does not believe that that needs to be addressed in this regulation as the debarment and suspension regulations provide authority to initiate actions where a firm intentionally misrepresents its size or status.

Supply Contracts and Waivers ( § 121.1203 and § 121.1204)

The Small Business Act provides that in a contract mainly for supplies a small business concern shall supply the product of a domestic small business manufacturer or processor unless a waiver is granted after SBA reviews a determination by the applicable contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including the period of performance) required by the contract. The final rule clarifies that a waiver need not be sought where at least 50% of the estimated contract value of the items to be procured are manufactured by small business concerns. The final rule also clarifies that a contracting officer need not seek a waiver for each item for which the procuring agency believes no small business manufacturer or processor can reasonably be expected to offer, but rather must seek a waiver with respect to such items in an amount that would bring the total estimated value of items to be supplied by small business and items subject to a waiver to be at least 50% of the value of the contract.

The SBA’s final rule also explains that a waiver request can state spare parts relating to a particular piece of equipment as an item for which a waiver is sought, as opposed to identifying individual small part:

However, SBA also understands the concern that specifying every part of a multifaceted end item could be overly burdensome. For example, aircraft X has many thousands of parts that make up the aircraft. To specify every part of the aircraft that might need to be replaced as a separate item for which a waiver must be sought would be burdensome. SBA does not expect that. In such a case, the waiver request should state spare parts relating to aircraft X as the item for which a waiver is sought. However, a waiver request cannot be so broad as to have no real identification (e.g., all medical supplies).

The SBA also clarified that the waiver cannot exceed five years, and that the procuring agency would need to obtain a new waiver for any contract awarded after five years.

8(a) Applications and Eligibility for the 8(a) Program

SBA adopted language providing that if a firm is denied entry into the 8(a) program because of their size, that entity can request a formal size determination and, if that determination finds they are small, the Associate Administrator for Business Development can admit them to the 8(a) program without requiring the firm to reapply.

Identification Of Those Persons Who May Be Considered Economically Disadvantaged

SBA’s final rule requires an individual to provide retirement account information only upon request by SBA and deletes a duplicative regulation that excluded income from an applicant or Participant that is an S corporation, a limited liability company, or a partnership where the income was reinvested in the firm or used to pay taxes that arose in the normal course of operations of the firm.

Ownership Of Protégé By Mentor In The Same Line Of Business Entity ( § 124.105)

The SBA adopted language clarifying that a mentor could own up to 40% of a protégé, even where the mentor and protégé are in the same line of business. Normally, a non-disadvantaged person or entity in the same or similar line of business or a principal of such concern may generally not own more than a 10 percent interest in a Participant that is in the developmental stage or more than a 20 percent interest in a Participant in the transitional stage of the program.

Transfer Of Ownership From One Disadvantaged Individual To Another; No Waiver Required; Time Frame For SBA Approval Of Waivers ( § 124.105(I); § 124.515)

Under § 124.515, when ownership of an 8(a) entity is transferred to a new entity, any existing 8(a) contracts are terminated unless the SBA grants a waiver. The SBA adopted new regulations providing that any 8(a) entity, or former 8(a) entity that is performing one or more 8(a) contracts, may substitute one disadvantaged individual or entity for another disadvantaged individual or entity without requiring the termination of those contracts or a request for waiver under § 124.515, as long as it receives SBA’s approval prior to the change.

The final rule provides that waiver requests will be processed within 90 days of receipt of a complete waiver package by the AA/BD.

The SBA also clarified that, when considering transfer of ownership of an 8(a) entity from on eligible participant to a second eligible participant, the only issue for the SBA to evaluate is whether the “acquiring firm is an eligible Participant prior to the transfer. As such, the final rule deletes the last sentence of current § 124.515(d), which restricted the transfer of 8(a) contracts to another Participant that had not previously performed work similar to that being transferred.”

Aggregating The Interests Of Immediate Family Members In Calculating Total Interest Of A Non-Disadvantaged Individual Involved In A Change Of Ownership ( § 124.105(I))

SBA regulations permit a change of ownership to occur without receiving prior SBA approval in certain specified circumstances, including where all non-disadvantaged individual owners involved in the change of ownership own no more than a 20 percent interest in the concern both before and after the transaction. To ensure that ownership interests are not divided up among two or more individuals to avoid SBA’s immediate review of a change of ownership, the revised language provides that SBA will aggregate the interests of all “persons with an identity of interest” (as defined in § 121.103(f)) in determining whether a non-disadvantaged individual involved in a change of ownership has more than a 20 percent interest in the concern.

Potential For Success ( § 124.107)

The SBA clarified that when determining if an entity has reasonable prospects for success in competing in the private sector, a requirement for entry into the 8(a) program, there is no requirement that the entity has performed private sector work. They may rely on successful performance of state, local or federal government contracts.

Ineligibility To Participate In The 8(A) BD Program On The Basis Of Failure To Resolve Financial Obligations To The Federal Government; Clarifying Language To Permit Participation The 8(A) BD Program Upon Proof Of Settlement Or Discharge/Forgiveness Of Obligations By Federal Government ( § 124.108)

An applicant is ineligible for the 8(a) BD program where the firm or any of its principals has failed to pay significant financial obligations owed to the Federal Government. The SBA adopted language clarifying that if the Government has settled a debt (i.e., accepting less than the full amount owed to discharge the debt), the firm/individual would not be barred from participating in the 8(a) BD program on that basis alone.

Required Waivers Of Sovereign Immunity By Tribes ( § 124.109)

The SBA added language demonstrating that the requirement that Tribes waive sovereign immunity with respect to their 8(a) entity only applies to Federally-recognized Tribes, as state recognized Tribes do not need to waive sovereign immunity because they are already subject to suit.

The SBA also clarified the manner in which concerns that are organized under tribal law may waive their sovereign immunity, provided that such entities waive sovereign immunity in any documents authorized under tribal law that are similar to articles of incorporation, partnership agreements or limited liability company articles of organization.

Finally, as Tribes may not have tax returns (and the SBA requests the past two years of tax returns from applicants in evaluating their potential for success), the final rule added a provision allowing a tribally-owned applicant to submit financial statements demonstrating that it has been in business for at least two years with operating revenues in the primary industry in which it seeks 8(a) certification.

Elimination Of The Requirement That A Concern Compare Its Financial Condition To Non-8(A) BD Business Concerns The Same Or Similar Line Of Business In Order To Determine If The Firm Is Economically Disadvantaged For Purposes Of Graduation ( § 124.302)

The SBA had removed the requirement that a concern’s financial condition be compared to non-8(a) business concerns in the same or similar line of business when determining if the concern is economically disadvantaged. The same requirement, however, remained in § 124.302(b), when addressing graduation from the 8(a) program. The final rule removes language requiring a comparison of an 8(a) entity to non-8(a) businesses.

Immediate Termination From The 8(A) Program After Ceasing Of Business Operations ( § 124.304)

The SBA adopted language clarifying that where SBA obtains evidence that an 8(a) entity has ceased its operations, the SBA may immediately terminate a concern’s participation in the 8(a) BD program by notifying the concern of its termination and right to appeal that decision to OHA. The SBA would not have to follow the normal 30 day notice period for termination.

Limiting Competition to Small Business Programs Entities (§§124.501, 126.609, 127.503(e), and 128.404(d))

The SBA adopted language clarifying and the SBA will not accept a contract into the 8(a), HUBZone, WOSB, or SDVO programs that seeks to limit competition only to entities that are participants in two or more small business programs (i.e. limiting competition to just 8(a) entities that are also HUBZone eligible), rather than allowing competition among all eligible entities (i.e. all 8(a) entities, HUBZone or not). The SBA also adopted language prohibiting procurement agencies from awarding extra evaluation points or any evaluation preference to firms having one or more additional certifications.

The SBA also to clarified § 124.501(b) to provide that an agency may award an 8(a) sole source order against a multiple award contract that was not set aside for competition only among 8(a) entities.

Moving Work Previously Performed Under An 8(A) Contract To An 8(A) MAC ( § 124.503(I))

The SBA expressed concern that when moving a procurement from an 8(a) sole source or competitive procurement to an 8(a) multiple award contract to which the incumbent is not a contract holder could hurt the incumbent by preventing them from competing for the follow-on work. The SBA clarified § 124.503 to state that an agency must notify SBA where it seeks to issue an order under an 8(a) multiple award contract that contains work that was previously performed through another 8(a) contract and that, where that work is critical to the business development of a current 8(a) entity that previously performed the work through an 8(a) contract and that entity is not a contract holder of the 8(a) multiple award contract, SBA may request that the procuring agency fulfill the requirement through a competition available to all 8(a) entities.

Restriction on Being a Member of More Than One Joint Venture Submitting A Proposal (§§ 124.513(a), 126.616(a)(2), 127.506(a)(3), and 128.402(a)(3))

The SBA adopted regulations barring an entity from being a joint venture partner on more than one joint venture that submits an offer for a specific small business contract. The restriction on being a member of more than one joint venture applies to all contracts or orders set-aside or reserved for the 8(a), HUBZone, WOSB, or SDVO programs.

Sole Source Awards To Individually-Owned 8(A)S

The SBA adopted language providing that the SBA can accept sole source awards to individual-owned 8(a) entities in amounts that exceed:

  • the $4.5M and $7M competitive threshold amounts set forth in § 124.506(a)(2) where a procuring agency has determined that one of the exceptions to full and open competition set forth in FAR 6.302 exists; and
  • $25M, or $100M for a Department of Defense (DoD) agency, the proposed rule also clarified that the agency would be required to justify the use of a sole source contract under FAR 19.808-1 or Defense Federal Acquisition Regulation Supplement (DFARS) 219.808-1(a)

The SBA explained that “[a]lthough those justifications and approvals generally apply to sole source 8(a) contracts offered to SBA on behalf of entity-owned Program Participants, the FAR and DFARS justification and approval provisions are not restricted to entity-owned Participants. Instead, those provisions apply to any 8(a) sole source contract that exceeds the $25M or $100M threshold. As such the proposed rule merely added language to clarify what SBA believes the current requirement is and does so in order to avoid any confusion.”

Inclusion of BPAs in Definition of Bundling ( § 125.1)

The SBA adopted new language specifically including blanket purchase agreements (BPAs) in the list of contracting vehicles that are covered by the definitions of consolidation and bundling.

The SBA explained that:

SBA routinely sees consolidation in BPAs. Bundling on a BPA has the same detrimental effect on small-business incumbents as bundling on other vehicles, such as contracts or orders. Regardless of whether the resulting requirement is a BPA, the bundled action will convert multiple small business contracting actions into a single action to be awarded to a large business. If agencies are not required to follow SBA regulations regarding notification and a written determination for bundled BPAs, the small business incumbents may not know that work that they are currently performing has been bundled and moved to a single award to a large business and may not have the opportunity to challenge such action. Awarding a requirement as a BPA does not lessen the negative impact of bundling on small businesses, and, therefore, SBA proposes to incorporate into the regulations its current belief that the bundling and consolidation rules should apply with equal force where the resulting award will be a BPA.

The SBA also adopted language clarifying that the analysis, determination, and notification requirements for consolidation or bundling apply when existing requirements are combined with new requirements:

Additionally, several procuring agencies have asserted that the analysis, determination, and notification requirements for consolidation or bundling do not apply when existing requirements are combined with new requirements. SBA disagrees. There is no basis in statute, regulation, or case law for agencies to interpret “requirement” as excluding a combination of existing and new work. The statutory language speaks solely to the value of existing work. As long as the combined existing work is greater than $2 million, the statute defines it to be consolidation. New work is not relevant to that determination. To eliminate any confusion, the proposed rule clarified SBA’s current position that agencies are required to comply with the Small Business Act and all SBA regulations regarding consolidation or bundling regardless of whether the requirement at issue combines both existing and new requirements into one larger procurement that is considered to be “new.” Commenters agreed that “consolidation” and “bundling” can occur regardless of whether an agency adds additional new requirements to a procurement or whether the overall requirement can be considered “new” due to its increase in scope, value or magnitude. SBA adopts that language in this final rule.

As such, an analysis comparing the cumulative total value of all separate smaller contracts with the estimated cumulative total value of the bundled procurement is required as part of the analysis of whether bundling is necessary and justified.

Inclusion of Indirect Costs In Subcontracting Plans ( § 125.3)

The SBA adopted new language stating that:

  • prime contractors are required to include indirect costs in the individual subcontracting plans and reports; other contractors may continue to choose whether or not to continue to include them;
  • including indirect costs in individual subcontracting plans and reports is required only for contracts valued at $7.5 million or more; and
  • prime contractors may rely on a pro-rata formula to allocate indirect costs to covered individual contracts, to the extent that the indirect costs are not already allocable to specific contracts.

Currently, large businesses have the option of including or excluding indirect costs in their individual subcontracting plans. Many large businesses opt to exclude indirect costs. As a result, small businesses that provide services generally considered to be indirect costs – such as legal services, accounting services, investment banking, and asset management – are often overlooked by large contractors. SBA stated that by requiring indirect costs to be included in their individual subcontracting plans, large businesses will have an incentive to give work to small businesses that provide those services.

Mentor-Protégé Program (§ 125.9)

The SBA adopted language providing that when a mentor purchases another business entity that is also an SBA-approved mentor of one or more protégé small business concerns and the purchasing mentor commits to honoring the obligations under the seller’s mentor-protégé agreement(s), that entity may have more than three protégés. In such a case, the entity could not add another protégé until it fell below three in total.

The SBA also adopted new language permitting a small business to enter into a mentor-protégé agreement with a larger entity that has multiple subsidiaries, and to provide in that agreement that any one (or all) of those subsidiaries of the mentor may provide assistance with, and joint venture with, the small business. The SBA explained that:

In most cases, the parent mentor has experience in the primary industry of the protégé business concern. The protégé expects to joint venture with and gain experience from that parent mentor in that industry. However, if a subsidiary of the mentor has experience in a different industry in which the protégé seeks to enter, that subsidiary should be able to assist the protégé firm to gain experience in that distinct industry as well.

Finally, the SBA adopted language specifically permitting a second six-year mentor-protégé relationship with the same mentor.

HUBZone Ostensible Subcontractor Rule (§ 126.601(d))

The SBA clarified that where a subcontractor that is not a certified HUBZone small business will perform the primary and vital requirements of a HUBZone contract, or where a HUBZone prime contractor is unduly reliant on one or more small businesses that are not HUBZone-certified to perform the HUBZone contract, the prime contractor would not be eligible for award of that HUBZone contract.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.

Related Industries

Consumer products, manufacturing & retail, indian country & alaska native corporations, real estate, construction‎, related services.

  • Tax & Estate Planning
  • Business & Corporate
  • Employment Litigation
  • Immigration
  • Advice & Compliance
  • Trusts & Estate Planning
  • Tax Controversy
  • Tax Planning
  • Probate & Trust Administration
  • Government Contracts
  • Privately Held Businesses & Enterprises
  • Corporate Formation & Governance
  • Securities & Finance
  • Mergers & Acquisitions
  • Privacy & Data Security ‎

Related Resources

Navigating small business set-asides‎.

Publication

SBA 8(a) Program Regulatory Changes: Size Determinations and Multiple Award ‎Contracts

Bid solve case and key considerations for sbas on tax returns, comparing senate and house ndaa 2024, the impact of ongoing challenges to federal programs, sba 8(a) program regulatory changes: follow-on contracts, sba 8(a) program regulatory changes: all small mentor-protégé program, district court rules sba presumption of social disadvantage is unconstitutional, dod proposes further far changes, sba 8(a) program regulatory changes: limitations on subcontracting, sba 8(a) program regulatory changes: ‎8(a) business activity targets ‎, sba 8(a) program regulatory changes: ostensible subcontractor rule ‎, sba 8(a) program regulatory changes: bona fide place of business requirements, key resources for anc, sba & government contracting matters, dod, gsa, and nasa update far to provide for accelerated payments to small businesses and to conform to sba regulations, update on challenge to the constitutionality of the sba 8(a) program, dod issues final rule on sba joint venture eligibility, sba adjusts standards and thresholds for edwosb and 8(a) business development programs, sba provides guidance on impact of new naics codes on size standards, ideas & insights.

Email Address

Your subscription has been received! Please give us a little more information about you and your interests so we can deliver the most relevant news and insights.

I’m interested in: (Check all that apply) Consumer Products, Manufacturing & Retail Employment, Labor & Benefits Healthcare & Life Sciences Agriculture Forest Products Indian Country & Alaska Native Corporations Ports & Maritime Real Estate & Construction Technology

Successfully Suscribed!

News and Insights delivered to your inbox

sba 8a business plan

  • Mar 25, 2020

8(a) BUSINESS PLAN – FORM 1010C

Updated: Feb 17, 2021

(para español, haga clic aquí )

Getting 8(a) certified requires you to draft a business plan. Contact DBE Direct LLC for help on all your Certification needs.

The Purpose of the 8(a) business plan

The Small Business Administration (SBA) requires an 8(a) business plan for all 8(a) certified business. The purpose of the 8(a) business plan is to help the SBA determine if your company is capable of fulfilling government contracts provided to your company. The SBA 8(a) business plan also helps determine and outline the objectives and goals for your business.

The SBA’s 8(a) Business Plan (also known as form 1010c) consists of 11 key sections which contains 52 detailed questions which must be filled out thoroughly. The 8(a) business plan is a very daunting document which requires an experienced business plan writer. Pulling all the information together in order to complete the document can take weeks. Errors in your 8(a) business plan will cost you time and money because the SBA will send your document back if there are any errors or missing information.

The sections of the 8(a) business plan (Form 1010C)

Section 1: Executive Summary

The applicant must describe what the business is in and what is hoped to be achieved. The business plan will then be presented to the assigned Business Opportunity Specialist to review.

Section 2: Business History, Background, and Objectives

When did the applicant form the company? Why was the business formed? What are the objectives over the next year and beyond? What are the achievements and successes? What obstacles had to be overcome to succeed?

Section 3: Business Environment

What is the current business environment? Is it a boom or bust time? How does it impact marketing?

Section 4: Products and/or Services

What products and/or services does the applicant’s company offer? What changes are planned in the next year?

Section 5: Present Market

Major customers need to be identified. What is the growth potential with current customers and getting new customers? What is the current marketing approach? How does the applicant compare to competitors?

Section 6: Competition

Who are the competitors? What are their strengths and weaknesses? How will the applicant be able to compete and overcome their advantages?

Section 7: Marketing Plan

What are marketing strategies, tools, and techniques will the applicant’s business use to promote the business? Section 8(a) and non-Section 8(a) market segments need to be addressed.

Describe your management team and list its strengths and weaknesses. Is the applicant properly utilizing social networks like Facebook and Twitter to spread their message?

Section 8: Organization and Management

How is the applicant’s company organized? What is the organized and management structure? What are the management team’s strengthens and weaknesses? Is there a succession strategy? If yes, who will take over if the owner is unable to serve or a key employee leaves?

Section 9: Business Resources

What suppliers are used? Where are they located? What are the payment terms (30, 60, 90, 120+ days)? Does the applicant need to use temporary or contract workers to fill orders? What quality standards are used to ensure products have the highest quality?

Section 10: Financial Plan/Data

What is the financial state of the company? Two years of projected business and cash flow need to be provided. What bank does the applicant use? What are lines of credit, amount owed, and amounts available?

Is there any debt? How much is it and who is owed to? Does the company use cash or accrual accounting? Are quarterly or annual statement prepared in house or outside accountants?

Section 11: Contract Support Targets

What support targets are the applicant trying to reach? The applicant needs to identify 8(a) and non-8(a) business they can obtain.

With a Section 8(a) Business Plan, an applicant will follow checklists and timetables to increase their chances of getting 8(a) and non-8(a) business. This also increases chances of growing America’s economy and creating jobs for Americans.

Contact Us Today

The SBA 8(a) Certification Attorneys and Accountants at DBE Direct are experienced and available to help you complete your 8(a) business plan. Call us at (786) 390-5709 We are available to review your 8(a) business plan before you submit your 8(a) business plan to the SBA .

Recent Posts

What is a Bid Protest and How Can It Help or Hurt Me?

DBE Appeal Case Brief: SURVEYING SOLUTIONS INC.; Ref No.: 14-0071

AN IN-DEPTH LOOK AT THE DBE APPLICATION REVIEW PROCESS

Financing | Templates

How To Write an SBA Business Plan [+Free Template]

Published June 13, 2023

Published Jun 13, 2023

Tricia Jones

REVIEWED BY: Tricia Jones

Andrew Wan

WRITTEN BY: Andrew Wan

This article is part of a larger series on Business Financing .

  • 1. Write the Company Description
  • 2. Identify Organization & Management
  • 3. Specify the Market Analysis
  • 4. Write Descriptions of the Products or Services
  • 5. Indicate the Marketing & Sales Strategy
  • 6. List Financial Data & Projections
  • 7. Write the Financing Request
  • 8. Fill In the Appendix & Supplemental Information
  • 9. Complete the Executive Summary
  • Additional Resources

Bottom Line

If you’re applying for a loan from the Small Business Administration (SBA), there’s a good chance that you’ll need a business plan to get approved. An SBA business plan provides a summary of the various aspects of your business, and we will guide you through the process of creating it, from writing your company description and marketing and sales strategies to completing financial data and projections and your executive summary.

Although there is no standard format, and to help you ensure nothing is overlooked, you can use our SBA business plan template to ensure you cover the most important areas of your company. A well-prepared business plan can improve your chances of getting an SBA loan.

FILE TO DOWNLOAD OR INTEGRATE

SBA Business Plan Template Download

sba 8a business plan

Thank you for downloading!

Step 1: write the company description.

This section should contain information about the purpose of your business. It should include a description of the problem or challenge your product or service aims to solve and what types of individuals or organizations will benefit.

A strong company description should also address the following questions:

  • Why does your company exist?
  • What problems does your business aim to address?
  • What prompted you to start your business?
  • What organizations or individuals will benefit from your company’s product or service?
  • What makes your company different from others?
  • What competitive advantages does your business offer?
  • What would a successful product launch look like?
  • Does your company have strategic partnerships with other vendors?

Step 2: Identify Organization & Management

Details about the legal and tax structure of your business should be included in this section. It can also be helpful to include an organizational chart of your company. You can include information about each team member’s background and experience and how it is relevant to your company:

  • Highlight what business structure you have selected and why. Examples commonly include a sole proprietorship, limited liability company (LLC), partnership, S corporation (S-corp), and C corporation (C-corp)
  • Include an organizational chart showing which team members are responsible for the various aspects of your company
  • You can include resumes for members of your leadership team highlighting their experience and background

Step 3: Specify the Market Analysis

The market analysis section of your SBA business plan should look at who your competitors will be. Look at what they are doing well, what their weaknesses are, and how your company compares.

The SBA’s market analysis page contains information on how you can approach this. Questions you should also consider addressing should include:

  • Who are the major competitors in the market?
  • What are competitors doing well and are there areas for improvement?
  • How does your company compare to the top competitors?
  • How has the product or service evolved over time?
  • Are there any trends for supply and demand throughout the year?
  • What can your company do to stand apart from the top competitors?

Step 4: Write Descriptions of the Products or Services

In this section, you should detail the product or service offered by your business. You should explain what it does, how it helps your customers, and its expected lifecycle. You can also include things like any expected research and development costs, intellectual property concerns such as patents, what the lifecycle of your product looks like, and what is needed to manufacture or assemble it.

Here are some things to consider as you are working on this section:

  • Description of what your product or service does
  • How your product or service works
  • How your customers will benefit from your product or service
  • Illustration of the typical lifecycle
  • Any patents or intellectual property you or your competitors have
  • Pricing structure
  • Plans for research and development
  • Discuss plans for handling intellectual property, copyright, and patent filings

Step 5: Indicate the Marketing & Sales Strategy

Details of your marketing and sales strategy will be highly dependent on your business. It’s also something that may evolve and change over time in response to things like the overall economic environment, release of competitor’s products or services, and changes in pricing.

With that being said, here is a list of some items that should be addressed:

  • Who is your target audience?
  • How will you attract customers?
  • How and where will sales be made?
  • If applicable, what will the sales process look like?
  • Where will you market and advertise your product or service?
  • How does your marketing strategy compare to other companies in the industry?
  • How much should you spend on marketing?
  • What is the expected return on investment for marketing?
  • Do you have any data showing the effect of marketing?

Step 6: List Financial Data & Projections

If your business has been running, you should include information about its finances. This should include all streams of revenue and expenses. Data for financial projections should also be included, along with a description of the methodology you used to reach those conclusions.

If available, you should be prepared to provide the following financial documents for at least the last three years to five years:

  • Personal and business tax returns
  • Balance sheets
  • Profit and loss (P&L) statements
  • Cash flow statements
  • Hard and soft collateral owned by your business
  • Business bank statements for the last six to 12 months

Financial projections should include enough data to offer some confidence that your business is viable and will succeed. It’s recommended that you provide monthly projections looking forward at least three years, with annual projections for years four and five.

  • Projections for revenue and methodology used in arriving at these figures
  • Expected shifts in revenue or expenses as a result of seasonality or other factors affecting supply and demand
  • Expected expenses from loan payments, rent, lease payments, marketing and advertising fees, employee salaries, benefits, legal fees, warranty expenses, and more

You can use our SBA loan calculator to help you estimate monthly payments for the funding you’re currently looking for and projections for any additional loans you may need. Monthly payments can fluctuate depending on the terms of your loan. If you’re looking for accurate estimates, you can read our article on SBA loan rates .

Step 7: Write the Financing Request

This section is where you should specify how much funding you need, why you need it, what you’ll use it for, and the impact you expect it will have on your business. It’s also a good idea to indicate when you expect to use the funds over the course of the next three to five years.

Here is a checklist of some important items you should cover:

  • How much funding you need and why
  • When you will use the funds over the next three to five years
  • What you will use the funds for
  • The expected impact this will have on your business and how it will help reach your business goals
  • The anticipation of any recurring needs for additional funding
  • Your strategy for how you expect to pay off the loan
  • Any future financial plans for your business

Step 8: Fill In the Appendix & Supplemental Information

This last section of your SBA business plan should include any additional information that may be helpful for lenders. This can include more detailed explanations or clarifications of data from other sections of your business plan.

Here are some examples of documents you can include:

  • Business licenses
  • Certifications or permits
  • Letters of reference
  • Photos of products
  • Resumes of business owners
  • Contractual agreements and other legal documents

Step 9: Complete the Executive Summary

The executive summary, which is the first section in a business plan, should be no more than one to two pages and provide a high-level overview of the items listed below. Since each section above is already detailed, a brief description of those sections will be sufficient:

  • Your company’s mission statement
  • The background and experience of your leadership team
  • The product or service and what purpose it serves
  • Your target market for the product or service
  • Competitive analysis of other products and services
  • Your competitive advantage or why your company will succeed
  • Marketing and sales strategy
  • Financial projections and funding needs

Depending on the type of SBA loan you’re applying for, certain areas of your business plan may be weighed more heavily than others. You can learn about the SBA loan options you can choose from in our guide on the different types of SBA loans .

Additional Resources for Writing an SBA Business Plan

If you’re looking for additional resources to help you write a business plan, you can consider the options below. Since a business plan is just one of many documents you’ll need, you can also read our guide on how to get an SBA loan if you need help with other areas of the loan process:

  • SBA: SBA’s business guide contains information on how you can start a small business. It includes steps on creating a business plan, funding your company, and launching a business.
  • SCORE: Through SCORE, you can request to be paired with a mentor and get business-related education. Educational courses come in several formats, including webinars, live events, and online courses.
  • Small Business Development Center (SBDC): SBDCs provide training and counseling to small business owners. This can help with various aspects of your company such as getting access to working capital, business planning, financial management, and more. You can use the SBA’s tool to find your closest SBDC .

Having a strong SBA business plan can improve your chances of getting approved for an SBA loan. If you’re unsure where to start, you can use our guide and template to cover the most important aspects of your business. You can also see our tips on how to get a small business loan . To get even more ideas on creating a strong business plan, you can also utilize resources through organizations such as SCORE and the SBA itself.

About the Author

Andrew Wan

Find Andrew On LinkedIn

Andrew Wan is a staff writer at Fit Small Business, specializing in Small Business Finance. He has over a decade of experience in mortgage lending, having held roles as a loan officer, processor, and underwriter. He is experienced with various types of mortgage loans, including Federal Housing Administration government mortgages as a Direct Endorsement (DE) underwriter. Andrew received an M.B.A. from the University of California at Irvine, a Master of Studies in Law from the University of Southern California, and holds a California real estate broker license.

Join Fit Small Business

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Select the newsletters you’re interested in below.

The Federal Register

The daily journal of the united states government, request access.

Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs.

If you are human user receiving this message, we can add your IP address to a set of IPs that can access FederalRegister.gov & eCFR.gov; complete the CAPTCHA (bot test) below and click "Request Access". This process will be necessary for each IP address you wish to access the site from, requests are valid for approximately one quarter (three months) after which the process may need to be repeated.

An official website of the United States government.

If you want to request a wider IP range, first request access for your current IP, and then use the "Site Feedback" button found in the lower left-hand side to make the request.

sba 8a business plan

Small Business Trends

Sba launches enhanced equity action plan to bolster small business growth and economic equity.

sba 8a business plan

Isabel Casillas Guzman, the U.S. Small Business Administration (SBA) Administrator, has unveiled an updated Equity Action Plan in a bid to foster inclusivity and economic opportunity. This initiative is set to transform the landscape for America’s 33 million small businesses and startups, particularly benefiting those from underserved communities.

The SBA’s refreshed Equity Action Plan zeroes in on crucial areas such as improving access to capital, enhancing entrepreneurial support services, and broadening economic opportunities to advance the national economy. This plan is part of the administration’s broader commitment to equity, initiated by President Biden’s Executive Order on his first day in office, mandating a comprehensive equity assessment across federal agencies.

Empowering Diverse Entrepreneurs

“As America continues to enjoy an unprecedented Small Business Boom, the SBA remains determined in its efforts to boost entrepreneurship among people of color, women, veterans, and those from rural communities, and this updated Equity Action Plan is a testament to that commitment,” stated Administrator Guzman.

The Equity Action Plan is pivotal in acknowledging and harnessing the value these entrepreneurs bring through job creation, innovation, and competitiveness on both domestic and international fronts.

Strategic Enhancements and Achievements

The 2023 Equity Action Plan outlines strategic improvements in several key areas:

Small Business Deals

  • Access to Loan Capital: Introducing new lenders capable of reaching underserved markets, simplifying lending rules, and promoting policies to support justice-involved entrepreneurs.
  • Federal Government Procurement: Enhancing Small Disadvantaged Businesses (SDBs) access to contracting opportunities and advocating for their inclusion in federal agency contracts.
  • Disaster Assistance: Modernizing application processes and bolstering support for underserved communities in disaster recovery efforts.
  • Business Counseling and Training: Tailoring resources to meet the specific needs of underserved entrepreneurs.
  • Investment Capital: Implementing rules to diversify fund managers within the Small Business Investment Company (SBIC) Program, aimed at directing more investments toward underserved entrepreneurs.

These strategies build on the successes of the initial Equity Action Plan, which notably increased Community Advantage lending, expanded SBLC licenses targeting underserved businesses, and enhanced SBIC financing to minority-owned, women-owned, and veteran-owned businesses.

Community Engagement and Resource Allocation

The SBA’s engagement with the small business community has been instrumental in shaping the Equity Action Plan. Through nationwide outreach, training events, and consultations with Resource Partners and trade associations, the SBA has honed its strategies to meet the evolving needs of small business owners. Noteworthy accomplishments include the launch of new Small Business Lending Companies (CA SBLCs), significant increases in SDB contracting, and the implementation of the Disaster Loan Program Modifications Rule.

Forward Momentum

As the SBA continues to refine its approach to equity and inclusivity, the updated Equity Action Plan stands as a testament to the Biden-Harris Administration’s commitment to creating a more equitable economic landscape. By addressing systemic barriers and fostering a supportive environment, the SBA aims to ensure that all entrepreneurs have the resources and opportunities needed to thrive.

For more information on the SBA’s efforts and to read the complete Equity Action Plan, visit the SBA’s official website.

This initiative not only promises to reshape the future of small business ownership in the U.S. but also reinforces the government’s role in facilitating equitable economic growth and resilience.

how to support small business

Your email address will not be published. Required fields are marked *

© Copyright 2003 - 2024, Small Business Trends LLC. All rights reserved. "Small Business Trends" is a registered trademark.

IMAGES

  1. Engineering 8(a) Business Plan

    sba 8a business plan

  2. Sba Business Plan Template Pdf

    sba 8a business plan

  3. The Ultimate Guide to the SBA 8(a) Program

    sba 8a business plan

  4. FREE 8+ Sample SBA Business Plan Templates in PDF

    sba 8a business plan

  5. FREE 8+ Sample SBA Business Plan Templates in PDF

    sba 8a business plan

  6. Six (6) Benefits of the SBA 8a business development program

    sba 8a business plan

VIDEO

  1. SBA 7A Loans for Everyone? Major Rule Changes Today! #funding #smallbusiness #loans

  2. SBA’s 7(a) Loan Program: A Detailed Review

  3. SBA 🔥🔥🔥🔥

  4. Sample Business Plan Overview

  5. Learn About The SBA #shorts #finance #help

  6. SBA

COMMENTS

  1. 8 (a) Business Development program

    Program overview Sections 7 (j) (10) and 8 (a) of the Small Business Act (15 U.S.C. §§ 636 (j) (10) and 637 (a)) authorizes the U.S. Small Business Administration (SBA) to establish a business development program, which is known as the 8 (a) Business Development program.

  2. SBA 8(a) Program: What It Is and How It Works

    The SBA 8 (a) Business Development program helps socially and economically disadvantaged small-business owners secure coveted government contracts. Through the nine-year program, members can...

  3. PDF SBA 8(a) Business Development Program FAQs—External

    1. What is the 8(a) Business Development (BD) Program? The Small Business Administration's (SBA) 8(a) BD Program is a nine-year business development program created to assist firms owned and controlled by socially and economically disadvantaged individuals.

  4. Updates on the 8(a) Business Development program

    8 (a) Business Development program Updates on the 8 (a) Business Development program Updates on the 8 (a) Business Development program Latest updates from SBA on the 8 (a) Business Development program as of November 2023. Content Background on the decision Details Guidance and FAQs for current 8 (a) participants

  5. What Is the SBA 8(a) Business Development Program?

    The 8 (a) Business Development program is a Small Business Administration initiative designed to level the federal government contracting playing field for small business owners who are socially and economically disadvantaged. Qualifying businesses can compete for contracts that are set aside specifically for members of the program.

  6. The 8(a) Business Development Program

    One important resource available to small businesses is SBA's 8 (a) Business Development program, which helps provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities.

  7. SBA 8(a) Program Guide For Small Businesses

    The SBA 8 (a) program is a nine-year program to help small socially and economically disadvantaged businesses qualify for federal contracts and other assistance. SBA 8 (a)-certified small businesses will receive government contracting preferences in addition to technical assistance and training.

  8. SBA 8(a) Program: How to Qualify and Apply

    The 8 (a) Business Development program is designed by the SBA to help businesses secure these government contracts, giving your business an edge when competing for contracts under any U.S....

  9. Summary of New Changes to the SBA's 8(a) Regulations

    An 8 (a) entity having an approved bona fide place of business in one state is eligible for work in a contiguous state. The SBA gave the following example, based on an 8 (a) entity that has a bona fide office in Virginia, but does not have a bona fide office in North Carolina:

  10. Most Frequently Asked Questions About The 8(a) Program

    The 8 (a) program name is from Section 8 (a) of the Small Business Act. The Act, as amended by Congress, created the 8 (a) program so the U.S. Small Business Administration (SBA) could help small companies owned and operated by socially and economically disadvantaged persons develop their businesses. One of the business development tools of the ...

  11. 8(a) BUSINESS PLAN

    The SBA 8a business plan also h (para español, haga clic aquí) The Purpose of the 8(a) business plan The Small Business Administration (SBA) requires an 8(a) business plan for all 8(a) certified business. The purpose of the 8(a) business plan is to help the SBA determine if your company is capable of fulfilling government contracts provided ...

  12. SBA Business Plan

    The 8 (a) Business Plan is submitted on a special form, SBA Form 1010C. The form asks 52 detailed questions that are specific to the 8 (a) program. The questions require thorough and detailed narrative answers that must address the firm's development plan.

  13. How To Write an SBA Business Plan [+Free Template]

    Step 7: Write the Financing Request. This section is where you should specify how much funding you need, why you need it, what you'll use it for, and the impact you expect it will have on your business. It's also a good idea to indicate when you expect to use the funds over the course of the next three to five years.

  14. SBA Certify

    Welcome to certify.SBA.gov! You have been directed to certify.SBA.gov from BDMIS in order to submit the supporting documentation required for your 8 (a) application submission. Please review the instructions below in full before establishing your account and attempting to submit your PDF documents. Please feel free to submit any questions you ...

  15. Federal Register :: Ownership and Control and Contractual Assistance

    Start Preamble Start Printed Page 55642 AGENCY: U.S. Small Business Administration. ACTION: Proposed rule. SUMMARY: This proposed rule would make several changes to the ownership and control requirements for the 8(a) Business Development (BD) program, including recognizing a process for allowing a change of ownership for a former Participant that is still performing one or more 8(a) contracts ...

  16. PDF Equity Action Plan Summary: U.S. Small Business Administration

    7 2023 Equity Action Plan Summary: U.S. Small Business Administration. What SBA accomplished. communities and piloted a new lending platform to reduce burden and speed up the application and ...

  17. PDF Program Benefits 8(a) Business Development

    The 8(a) Business Development program is NOT a contracting program. The program requires significant commitment on the part of the business to market it's programs and/or services in order to succeed in the program. • Focus on areas in your niche market and prioritize. • Identify federal buyers and get to know them.

  18. SBA Launches Enhanced Equity Action Plan to Bolster Small Business

    Isabel Casillas Guzman, the U.S. Small Business Administration (SBA) Administrator, has unveiled an updated Equity Action Plan in a bid to foster inclusivity and economic opportunity. This initiative is set to transform the landscape for America's 33 million small businesses and startups, particularly benefiting those from underserved ...

  19. Dominic Nicholson on Instagram: "Dm Me God Mode... Getting approved for

    238 likes, 13 comments - bagzamilleon on February 20, 2024: "Dm Me God Mode... Getting approved for business funding with a new LLC can be challenging, but h..."

  20. SBA's Business Development Assistance to 8(a) Program Participants

    The 8 (a) Business Development Program helps small businesses owned by socially and economically disadvantaged individuals gain business skills and access to federal contracting opportunities so that they can better compete in the open marketplace.

  21. SBA to Provide One Year 8(a) Program Extension to Participants Due to

    WASHINGTON - The U.S. Small Business Administration published an interim final rule effective January 13, 2021 allowing 8(a) Program participants to elect a one-year program extension in the SBA's 8(a) Business Development Program due to the challenges of COVID-19. Eligible 8(a) firms must meet the following qualifications: Any firm that participated in the 8(a) Program between March 13 ...

  22. PDF SBA's Business Development Assistance to 8(a) Program Participants

    and technical assistance program authorized by section 7(j) of the Small Business Act, and SBA's resource partners. Contracting opportunities include set -aside contracts, which limit competition to 8(a) firms, and sole-source contracts awarded without competition. As of August 19, 2021, SBA reported 4,906 firms participated in the program.

  23. 8(a) Annual Update

    Home Document search 8 (a) Annual Update SBA form 1450 8 (a) Annual Update Existing 8 (a) participants use this form to show they continue to meet program elibigility requirements. Download .pdf File size: 652KB OMB Control Number : 3245-0205 Related Programs : 8 (a) Last updated October 10, 2017

  24. PDF 2023 Equity Action Plan

    Delivering on SBA's 2022 Equity Action Plan, SBA modernized programs and leveraged networks and resources to expand access to the Agency's programs and services—especially for underserved entrepreneurs. SBA's 2023 Equity Action Plan update builds on the achievements of the 2022 Equity Action Plan with actionable steps including ...

  25. DIY Marketing

    FREE IN-PERSON WORKSHOP Thursday, February 22nd | 6:00-8:00 pm EST White Plains Library, 100 Martine Avenue, White Plains, New York 10601 Second Floor Auditorium OVERVIEW: This in-person workshop is designed to empower small business owners to embrace the latest technology that everyone is talking about. Attendees will discover how to enhance their marketing efforts, leveraging the latest ...