Background: Section 8(a) of the Small Business Act as amended by Congress, created the 8(a) business development program. This program enables Small Business Administration (SBA) to assist small disadvantaged firms to develop their businesses. In applying to the program, a firm is rigorously evaluated on its ownership, operations, financial health, and past performance. Once accepted, the firm is required to provide the SBA a detailed business plan and annually show continued success as a viable, strong business entity. Firms that are approved are certified by the SBA for a period of nine years. The SBA assigned Memorandums of Understanding (MOUs) with Federal Agencies allowing them to contract directly with certified 8(a) firms. Participants can receive sole source contracts, up to a ceiling of $4.5 million for non-manufacturing services and up to $7.5 million for manufacturing-related contracts.
Benefits: The 8(a) sole source award provides agencies a simplified and shortened acquisition procedure:
- Reduced decision cycle: the time required to award an 8(a) sole source contract is usually less than 30 days.
- Lowered administrative costs: procurement process and time is reduced.
- Prices reflecting the best value: agency negotiates with the firm directly to get the best value.
- Credit for promoting small business participation within agency.
- Initiate a contract with a simple high-level statement of work.