The 8(a) certification limits your competition and can increase your visibility in the federal marketplace. Here are the Top 5 benefits of obtaining the SBA’s 8(a) Certification.
5% of all federal contract are earmarked for 8(a) firms. In reality, all agencies exceed this goal bringing the average to around 8-9%. There are approximately 24 million businesses in the United States. There are around 350,000 small business contractors in sam.gov. However, less than 6,500 firms currently have successfully navigated the process for becoming 8(a) Certified. As a result, 8(a) firms on average have sales in excess of $5MM per year.
The best description for a Sole-Source Contract is a procurement officer meeting directly with the owner of the 8(a) firm to present the details and pricing of a contract that they intend to award them. This occurs without a formalized bidding process very similar to how small businesses conduct transactions with one another. The contract can be codified provided the 8(a) firm is not more than 10% over market rates.
Sole-Source Contracts are favorable to the contracting officer as it gives them a means to award a contract much faster than going through a formalized bid process. It can be as short as days or weeks compared to six to nine months. Approximately half of all 8(a) sales occur using sole-source contracts, at least $16B annually. Sole sourcing is valuable for 8(a) firms as it greatly reduces the administrative burden on firms that are new to the federal marketplace.
Key Point: 8(a) firms that build rapport with contracting officers can routinely obtain sole-source contracts from the same contracting officers. Therefore, being trustworthy and providing good work is very beneficial to the 8(a) firm.
Limits: Sole-source contracts are limited to $4MM for goods and services and $7MM for manufacturing.
Boosts GSA Schedule and GWAC Effectiveness
There are many contracting vehicles that federal agencies utilize. GSA Schedule and other Government-wide Contracting vehicles are among their favorites. When procurement officers are utilizing these contracting vehicles in order to hit their 8(a) social inclusiveness goals, they seek out the 8(a) firms on those contracts. This in turn boosts the performance of the 8(a) firms, compared to other contract holders.
GWACs such as 8(a) STARS for Information Technology Companies can also provide an avenue for a major increase in sales providing additional narrowing of competition.
8(a) firms are all small businesses with somewhat similar capabilities and cost structures. Due to these factors, they are generally able to receive better pricing than their peers who do not have access to sole-source and set-aside contracts.
Construction Contractor Friendly
8(a) Construction opportunities occur throughout the United States. This is because 80% of Federal Construction occurs at DoD facilities (Army, Navy, Air Force, and Marine Bases). These facilities are in all 50 states as well as US Territories. Generally, a military facility will utilize 2-3 different 8(a) firms on an ongoing basis providing those 8(a) firms with fairly routine work near their firm’s headquarters.
If you are interested in exploring an 8(a) Certification and/or GSA Schedule, I always recommend contacting an industry expert such as ez8a, Advance GSA or Advance 8a. None charge for an initial consultation.