Current 8(a) application processing times have increased from three months in July of 2020 to five months in November of 2020, to well over six months right now. We are anticipating waiting times to continue to grow as 2021 comes to a close, and we head into 2022. There are two primary causes for the application queue growing.
1. The SBA increased the limits on what it means to be “Economically Disadvantaged” in order to gain entrance into the program. For personal income it went from a $250,000 three-year average to $350,000. The net worth requirement excluding the individual’s personal residence, retirement accounts, and primary business has increased from $250,000 to $750,000. This increase has broadened the 8(a) application pool.
2. The uncertainty about the economic future is causing firms to rethink their overall marketing strategy and they now see government contracting work as a needed element for their continued success.
Generally, we find that most people procrastinate about becoming 8(a) certified for a number of reasons including:
A. They are already too busy to take on another project.
B. They don’t know where to begin the process.
C. They begin the process of working on the application, and this generates even more questions than it answers.
D. Updating documents such as corporate minutes and resumes, websites, online profiles as well as other documents is just too much to get involved in.
E. Updating the financial statements for the business for interim reporting is more than they currently want to take on.
Reasons to make it happen:
A. The current number of 8(a) firms fluctuates from 5,500-6,000, and they share over $40B per year in federal contracts, or around $8MM per 8(a) firm.
B. 8(a) firms are only permitted in the program for a nine-year period. This creates turnover which initiates new contracting opportunities for firms just entering the program.
C. 8(a) firms have their own GWAC, the 8(a) STARS Program which can generate many new contracting opportunities for 8(a) firms.
D. Firms working in construction in most cases would not have the opportunity to become a federal prime contract without the Sole-source provision that 8(a) firms are afforded.
E. Firms wanting to provide supplies or other services to DHS and FEMA have a much better ability to be awarded contracts utilizing their 8(a) Certification due to the speed in which contracts can be awarded.
F. 8(a) firms often grown to be medium sized federal contractors and are then sold for the government capabilities of the firm.
If you have any questions on getting qualified for an 8(a) Certification and/or the potential that it can bring to your small business, I always recommend contacting an industry expert such as ez8a or Advance 8a. They can both provide a more in-depth analysis, and do not charge for an initial consultation.