The SBA administers two particular business assistance programs for small, disadvantaged businesses (SDBs). These programs are the 8(a) Business Development Program and the Small Disadvantaged Business Program.

 

SBA 8(a) Certification

 

The new and improved 8(a) Program has become an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society.

To qualify for the 8(a) program, a small business must be owned and controlled by a socially and economically disadvantaged individual with a personal net worth of less than $250k (excluding personal home and business assets).

 

Benefits of 8(a) Certification

 

-          Sole-source contracts up to $3 million for goods and services and $5 million for manufacturing.

-          Over 25 Federal agencies can contract directly with 8(a) firms.

-          8(a) firms can form joint ventures and teams to bid on contracts.

 

To Qualify as an 8(a) Firm

 

The applicant firm

 

-          must be a small business,

-          must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and

-          must demonstrate potential for success.

 

Learn more/begin the SBA 8(a) online certification process now

 

 

SBA Small Disadvantaged Business (SDB) Certification

 

The SBA certifies SDBs for participation in federal procurements aimed at overcoming the effects of discrimination. Once certified, the firm is added to an on-line registry of SDB-certified firms maintained in Central Contractor Registration (formerly in PRO-Net).

 

Certified firms remain on the list for three years. Contracting officers and large business prime contractors may search this on-line registry for potential suppliers. 

 

SDBs are eligible for price evaluation adjustments of up to 10 percent when bidding on federal contracts in certain industries.

 

The program also provides evaluation credits for prime contractors who achieve SDB subcontracting targets. Note: The program is intended to help federal agencies achieve the government-wide goal of 5% SDB participation in prime contracting.

 

Benefits of SDB Certification

 

-          Under the government’s reformed affirmative action rules, small disadvantaged business are eligible for price evaluation adjustments of up to 10 percent when bidding on federal contracts in certain industries.

-          The program also provides evaluation credits for prime contractors who achieve SDB subcontracting targets. The program is intended to help federal agencies achieve the government-wide goal of 5 percent SDB participation in prime contracting.

 

 

To Qualify as a SDB Firm

 

Qualifications for the program are similar to those for the 8(a) Business Development Program. A small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to quality. Other individuals can qualify if they show by a " preponderance of the evidence" that they are disadvantaged. All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence. Successful applicants must also meet applicable size standards for small businesses in their industry.

 

Learn more/begin the SDB online certification process now

 

 

SBA 8(a) and SDB Questions & Answers

Q. What is SBA's definition of a small business concern?
A. SBA defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. Examples of SBA general size standards include the following:

• Manufacturing: Maximum number of employees may range from 500 to 1500, depending on the type of product manufactured;
• Wholesaling: Maximum number of employees may range from 100 to 500 depending on the particular product being provided;
• Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided;
• Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided;
• General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on the type of construction;
• Special Trade Construction: Annual receipts may not exceed $7 million; and
• Agriculture: Annual receipts may not exceed $0.5 to $9.0 million, depending on the agricultural product.

Q. Who are socially disadvantaged individuals?
A. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control. In the absence of evidence to the contrary, individuals who are members of the following designated groups are presumed to be socially disadvantaged:

• Black Americans
• Hispanic Americans
• Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians)
• Asian Pacific Americans (persons with origins from Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, U.S. Trust Territory of the Pacific Islands [Republic of Palau], Commonwealth of the Northern Mariana Islands, Laos, Cambodia [Kampuchea], Taiwan; Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall Islands, Federated States of Micronesia, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru; Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal), and
• Members of other groups designated by the SBA.

Q. Can an individual who is not a member of a designated group claim social disadvantage?
A. Yes. However, an individual who is not a member of a designated group must establish social disadvantage on the basis of a "preponderance of evidence." Generally, preponderance is evidence of quality and quantity which leads the decision maker to conclude, objectively, that the existence or truth of the fact(s) asserted is more probable than not.

Q. What evidence must an individual who is not a designated group member provide to show social disadvantage?
A. At least one objective distinguishing feature that has contributed to social disadvantage, such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged:

• Personal experiences of social disadvantage stemming from the objective distinguishing feature or features set forth in the preceding paragraph. The experiences must have been in American society, not in other countries, and must have been substantial and chronic.
• Negative impact on entry into or advancement in the business world because of the disadvantage. SBA considers any relevant evidence in assessing this element. In every case, however, SBA considers education, employment and business history, where applicable, to see if the totality of circumstances shows disadvantage in entering or advancing in the business world.