The most surprising thing about the 8(a) Certification is that only around 500 firms join the program per year. There are many causes for this such as procrastination, not meeting the qualifications, lack of knowledge about the program, as well as some firms are just plain intimidated by the thought of doing business with the federal government.  

Therefore, I am going to go over the benefits so that firms on the bubble of applying will reconsider, and go forward with an application.

Benefit 1 – Limited Competition

An 8(a) Certification, first and foremost, limits your competitive landscape in most cases to other 8(a) firms in the same industry. There are only roughly 6,500 8(a) firms sharing around $35 billion per year in federal contracts greatly increasing the likelihood for an 8(a) firm to find success.

Benefit 2 – Growth

8(a) firms can outpace their peers in terms of growth. I have seen many firms jump millions in sales from one year to the next by utilizing this program. Evidence of this is that Washington Technology publishes their list each year of the “Fast 50”, these are the fastest-growing businesses in the federal IT space and over the past half decade at least 60% of the firms listed have been 8(a) program participants.

Benefit 3 – Better Pricing

This is a result of limiting the competition of 8(a) firms to their peer groups. Most 8(a) firms have a similar constraint on the amount of work they can complete in a year. Therefore 8(a) firms typically price their work to make a fair profit which usually yields good margins.

Benefit 4 – GSA Schedule Synergy

An 8(a) Certification combined with a GSA Schedule Contract creates a synergistic effect where the sum is greater than the parts. Small business GSA Schedule Holders have around $1MM per year in federal sales. However, a GSA Schedule boosts the sales of the average 8(a) firm over their peers by over $3MM.

Benefit 5 – Sole Source Contracting

Sole Source contracts account for half of all 8(a) sales or about $16 Billion Annually. Sole source contracts work great for small businesses as they make the government work with small businesses the way the 8(a) firm would work with its commercial contracts. The two parties sit down, hash out a deal, and provided the amount is less than $4MM for goods and services and under $7MM for manufacturing, the contract can be directly awarded to the 8(a) firm without a complex bid process.

If you think that obtaining these benefits for your firm could boost your growth, I recommend contacting an industry expert such as ez8a, Advance 8a and/or Advance GSA, they can all help you work through the process. None charge for an initial consultation.