Is 8(a) for me? An outline of this SBA program, designed for small, disadvantaged businesses.

• Author: Hasle, James

What's all the hoopla surrounding the 8(a) program?

Why should I care?

To begin, the federal government spends $200 billion annually for private-sector goods and services. The 8(a) program is the Small Business Administration's business-development program designed to help small, disadvantaged businesses compete in the American economy and provide access to federal contracts. Here are the basic requirements of an 8(a) applicant:

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. Must demonstrate potential success. The SBA defines a small-business, concern as one that is independently owned and operated, is organized profit and is not dominant in its field. Without evidence to the contrary, Native Americans are presumed to be socially disadvantaged. In addition, Native American entities are able to procure contracts without ceiling limits imposed on other 8(a) entities. This explains the recent articles in the Anchorage Daily News regarding large-volume contracts awarded to Alaska Native entities. The SBA has established certain company size limits regarding number of employees and/or annual receipts.

The SBA defines size standards in the following ways:

Manufacturing: Maximum number of employees 500 to 1,500, depending upon product manufactured. Wholesaling: Maximum number of employees 100 to 500, depending upon products offered. Services: Annual receipts may not exceed $2.5 million to $21.5 million, again depending upon service provided. Retail: Annual receipts may not exceed $5 million to $21 million, depending upon product sold. General and heavy construction: General construction annual receipts may not exceed $13.5 million to $17 million, depending upon type of construction. Special Trade Construction: Annual receipts may not exceed $7 million. Agriculture: Annual receipts may not exceed $,500 000 to $9 million depending upon agricultural product. Economically disadvantaged individuals are defined by the SBA as socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities. Factors that are considered include the individual's net worth. Individuals who are considered to be disadvantaged are in groups identified by the SBA:

African Americans Hispanic Americans Native Americans (American Indians...