By: Justin Niceswanger
In past years, federal agencies have established contracting goals to award at least 5% of their prime contract spend to small disadvantaged businesses. In December of last year, the Biden Administration announced the goal would substantially increase.
How much was the increase? Can your company qualify as a small disadvantaged business, and use this status toward gaining federal contracts? What’s the 8(a) Business Development program? How are the Small Business Administration (SBA) and CIRAS educating businesses about the 8(a) program? How can I find true happiness? For answers to most of these questions, read on!
A New Goal
In December 2021, the Biden Administration announced changes to federal procurement processes, including increasing the prime contracting spend goal for small disadvantaged businesses (SDBs) to 11% for our current fiscal year, with an eventual goal of 15% beginning in fiscal year 2025. Federal fiscal years start on October 1, so some federal agencies operating under the previous goal for the first two months or so may feel a bit behind with issuance of the new target.
Interestingly, although the federal government’s previous SDB procurement goal had been set at 5%, they’ve been achieving more than double this amount in recent years (10.29% in FY 2019; 10.54% in FY 2020). At first glance, getting to 11% seems doable: The government was just a fraction of one percent away from already hitting the goal in FY20, but this still roughly equates to an additional $2.5 billion in contract spend agencies would’ve needed to award to SDBs. It will take considerable effort and outreach for agencies to identify more SDB sources (some of which may be new to government contracting) for their needed products and services, and for existing SDB sources to take on more work and expand their capabilities, in order to meet both the short and long-term goals. Could your business help with these efforts?
SDBs in Iowa: Do You Qualify?
In order for federal agencies to take credit toward their prime contracting goals with SDBs, businesses receiving award would need to either be self-certified, or certified by the Small Business Administration (SBA), as SDBs. To self-certify, there’s a single Yes/No question to answer during the registration / update process for your entity in the System for Award Management (SAM / SAM.gov) website. Before answering “Yes”, you’ll want to ensure your business actually meets the federal definitions of both a socially disadvantaged and economically disadvantaged small business.
Even if, after reading these definitions, you can answer “Yes” to the SDB question in SAM, please be aware this self-certification can’t be as effectively used by federal agencies toward meeting their SDB goals, as there are no procurement procedures available to them for either setting-aside or sole-sourcing contract opportunities to the category of self-certified SDBs. They likewise lack the ability to use your “Yes” answer as an evaluation factor for award determination. If you win a government contract, and you also happen to be a self-certified SDB, I’m under the impression an agency can take SDB credit, but these instances don’t make up the bulk of agencies’ SDB spend totals…
8(a): The Better Way!
When looking more closely at the FY 2020 federal contract data, the overwhelming majority of spend awarded to SDB prime contractors (over $55 billion of the total $58 billion SDB amount — 95%) happened by way of set-asides and sole-source actions to businesses which received their SDB certifications from the SBA. This certification method occurs when businesses apply for and are accepted to participate in the SBA’s 8(a) Business Development program, which provides participants with up to nine years of training, counseling, and technical assistance. Contract opportunities posted in SAM.gov using these special competition procedures will either list “8(a) Set-Aside” or “8(a) Sole-Source” in the Classification section.
According to information I pulled last month from the SBA’s Dynamic Small Business Search (DSBS) website, there are 689 actively-registered small businesses in Iowa which have self-certified their businesses in SAM as SDBs. Of these, 28 (4%) have previously participated the SBA’s 8(a) Business Development program, while just 11 (1.6%) are currently in the program. Looking at the current numbers, I believe there’s room for more Iowa SDBs to participate in the 8(a) program and have more opportunities for receiving federal contracts.
How Can I Learn More About the 8(a) Program?
We’re excited to announce that, on June 28, SBA’s Iowa District Office and CIRAS will be providing a free virtual presentation titled The SBA’s 8(a) Business Development Program for Small Disadvantaged Businesses. The event will provide information about the 8(a) program, benefits and assistance available to 8(a)-certified businesses, and how SDBs can prepare for participation. If you’re an SBD interested in beginning or increasing sales to the federal government, we hope you can attend the webinar!