Procurement officers looking to speed up a contracting process may consider using an 8(a) business, a company that is 51 percent owned and operated by one or more U.S citizens that the government deems “socially and economically disadvantaged entrepreneurs.” Because the government typically requires every solicitation they post to be publicly posted on a centralized business website, this can slow down the contracting process by netting hundreds of proposals. However, that’s not the case with an 8(a) company.
Hiring an 8(a) company can shorten the process of awarding a contract because it’s acceptable for specific work to be set aside for an 8(a) or HUBZone (Historically Underutilized Business Zone), which includes companies located in urban and rural communities.
Because contracting officers do not have to solicit bids, they can choose a specific 8(a) contractor to execute contract obligations. The contracting officer can name an 8(a) business in an offering letter to the Small Business Administration (SBA) to ensure that the specified company wins the contract. As a contracting officer, you have the ability to vet a company before rewarding an 8(a) business a contract, says Darryl Hairston, associate administrator for the 8(a) Business Development Program of the SBA. If several 8(a) companies appear to have the capability to perform the required work, adds Hairston, contracting officers have the freedom to view past performance while getting to know the company personally.
This specialized process can save time and money, Hairston says, because the business receives the contracts quickly and simplifies procurement. It also provides a unique opportunity to personally know the business and grants procurement officers more freedom to interact with 8(a) businesses on a one-on-one basis.
What You Should Know
Implemented by the SBA, the Section 8(a) Program of the Small Business Act was created in 1968 to help small, disadvantaged businesses compete in the marketplace by making them more competitive in government contracting.
The federal program helps participants in a two phases: The first is a developmental stage during in which the program, over a four-year period, focuses on providing development assistance to those of economic disadvantage. The second phase, the transitional stage, helps participants with their remaining business hurdles, while transitioning the participants out of the program over a five-year period.
Companies that are 8(a) certified have typically been in business for at least two years and are on the Central Contractor Registration (CCR) database. The 8(a) program offers its vetted participants:
- One-on-one business counseling
- Procurement assistance
- Financial assistance
- Surety bonding
- Management and training assistance
- Access to government contracts
- Help in positioning 8(a) companies as competitors for federal projects
- Sole-source contracts
- Up to $4 million for goods and services and $6.5 million for manufacturing
From Commercial to 8(a)
For eight years, Molly K. Gimmel, a Maryland-based certified professional contract manager and the co-owner of a government contracts consulting firm, helped large accounting consulting firms, such as Deloitte Consulting, Arthur Andersen and KPMG, win government contracts.
Then in 2001, Gimmel co-founded Design To Delivery Inc. (D2DInc), a minority- and woman-owned consulting firm that specializes in helping other 8(a) small businesses win and manage government contracts.
At first, D2DInc’s focus was on the commercial market. “But we wanted to increase our bottom line,” says Gimmel, whose company has now assisted more than 300 private-sector clients with government contracting.
When D2DInc expanded into the government sector to gain more clients, bigger contracts and more opportunities, Gimmel quickly realized the company had to become 8(a) certified. Winning a competitive government contract prior to becoming certified was very difficult, she says.
Thanks to the 8(a) certification, D2DInc has gained three prime contracts with federal government agencies, which would be impossible without the certification. “It’s helped us to grow,” Gimmel says. “We now have 10 employees just working on those three contracts.”
How to Assess 8(a) Businesses for your Next Job
For organizations looking to do business with 8(a) companies, conducting a substantial amount of market research is the first step, Gimmel says. First, create a “sources sought notice” through fbo.gov. The notice is an outline announcing that a government agency is seeking possible sources for a project. It’s an easy way to identify companies with experience in the areas you are looking to contract, but it’s not an actual bid or proposal solicitation. Many organizations use a sources sought notice as a way to perform market research to determine the capabilities and interests of a particular market or businesses, such as marketing or creative services, Gimmel says. It’s also a way to verify requirements, validate an approach to a solution and ensure competition.
“By awarding 8(a) contracts,” Gimmel says, “you’re helping to boost minority and disadvantaged communities while supporting the engine that’s fueling our economic recovery — small businesses.”
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