There are still pending issues to be resolved with the election, however, Joe Biden has called for an increase in the goal for federal spending with 8(a) BD Program participants from 5% to 15%. The goal would ramp up from 2021 to 2025. This would represent a massive increase in 8(a) spending which currently averages $6-8MM per firm. There are many variables that would determine whether or not this 8(a) spending proposal would come to fruition. Whether it does or does not, Biden is showing that he will make purchasing from the 8(a) program a priority for his administration.
Qualification for Becoming 8(a) Certified
-The 51% owner(s) of the firm must be a U.S. Citizen.
-The 51% owner(s) must have at least 25% of their blood heritage from a minority group or individuals can apply from a non-presumed groups such as Caucasian women, or service-disabled veterans.
-The owner of the firm’s personal income cannot have exceeded $350,000 per year on average for the past three years.
-The owner’s net worth cannot exceed $750,000, however, three items are excluded:
a. The firm owner’s personal residence.
b. The value of the business that is applying for the 8(a) Certification.
c. Also excluded is any retirement accounts for the owner.
Potential to Successfully Complete Federal Contracts
-The owner of the firm must be working full-time for the 8(a) applicant concern.
-The firm must have made a profit on its most recent tax return and have a positive net worth.
-Not more than 70% of the firm’s revenue can come from a single source, unless that source is a direct contract as a prime with the federal government, or the firm is applying with a 2 year waiver.
-The firm must have been in business for at least 2 years as evidenced by tax returns, or the firm must apply utilizing a 2 year waiver.
Free of Control and Affiliation Issues
The SBA will review a litany of documents in order to prove that the firm is not affiliated with another entity.
If you would like to go over these qualifications or have other questions concerning the 8(a) Certification, I always recommend contacting an industry expert such as ez8a or Advance 8a. They can determine whether this federal certification can provide your small business with unprecedented future business development potential. Neither charge for an initial consultation.