A PRACTICAL TUTORIAL
Asian American Business Resource Guide - 2006
Richard J. Otero, Sr.
THE 8(a) CERTIFICATION
CERTIFICATION…IT’S ALL ABOUT GAINING A COMPETITIVE ADVANTAGE
Certification…It’s all about gaining a significant competitive edge in doing business, especially
with the Federal and state governments. What is a competitive advantage? Simply stated, it’s
what differentiates your company from any or all of your competitors in a way that’s important to
a prospective customer’s decision to buy your product or service versus that of your competitors.
How do other companies differentiate themselves? There are six fundamental strategies that can
be used, alone or in combination with one another. They are:
Price – That is how Wal-Mart, as the low-price provider distinguishes itself.
Quality – This is Mercedes, BMW’s and Rolex’s claim to fame, whether real or perceived.
Ease of Use – Human friendliness and ergonomic design are what Microsoft
software/Windows and AOL have depended upon to become national leaders.
Speed of Service – Next Day Blinds, and even Dominos Pizza have used this ploy in the
commodity markets of window blinds and fast-food.
Customer Perceived Value – Such brands as Nordstrom and Publix Grocery stores are
known for their “well above-average” level of service and customer relationship
Different – Being unlike others is a fundamental technique used by the Satellite based radio
providers, HBO, BET and Univision.
How does being certified provide you with an opportunity to differentiate you and your company?
Here are but a few of the ways:
Price – Being certified can mean that your prospective customer need not buy from the
lowest bidder, if you demonstrate other important values to them to contract with you.
Quality – Being certified can mean that your prospective customer can buy from you, if
you can convince them that you are better, even though more costly than your competitors.
Ease of Use – Being certified can mean that your prospective customer can avoid
developing detailed procurement specifications and having to organize and conduct
complex and lengthy competitive procurements, subject to “sore-loser” protests.
Speed of Service – Simpler procurements are faster procurements, and that means that your
prospective customer can get your products or access to your services in a fraction of the
time as that which is available through competitive bidding.
Customer Perceived Value – Being certified can mean that you are available quicker,
easier, simpler and on more personally accommodating terms to your prospective customer
than most of your competitors.
Different - Being certified can mean that you are unlike the remaining 99.9% of all other
small businesses in the U.S. that are not certified, just because of the fact that you have this
important procurement assistance tool that you can share with your prospective customer.
What are the various types of certifications that are available to you to enhance your ability to do
more business with the Federal government and the state in which you operate your business? The
five most important certifications are:
8(a) Business Development – The SBA’s 8(a) BD Program, named for a section of the
Small Business Act, is a business development program created to help small
disadvantaged businesses compete in the American economy and access the Federal
Small Disadvantaged Business – The SBA’s Small Disadvantaged Business (SDB)
program is very similar to the above 8(a) program without the added benefits of any
business set-asides for SDB certified companies, but with the procurement assistance
benefits of price evaluation adjustments and proposal evaluation credits for contracting
with SDB-certified firms.
HUBZone Empowerment Contracting Program – The HUBZone Empowerment
Contracting Program stimulates economic development and creates jobs in urban and rural
communities by providing Federal contracting preferences to small businesses. These
preferences go to small businesses that obtain HUBZone (Historically Underutilized
Business Zone) certification in part by employing staff who live in a HUBZone. The
company must also maintain a "principal office" in one of these specially designated areas.
The program resulted from provisions contained in the Small Business Reauthorization Act
State Disadvantaged Business Enterprise Program – Both the Federal DBE and MBE
Programs are usually considered your state’s MBE Programs and seek to achieve a
percentage of MBE participation on State issued contracts. Certification as a DBE provides
greater exposure for work opportunities on federally funded State projects.
State Minority Business Enterprise Program – The state-run MBE Programs seek to
achieve a percentage of MBE participation on State issued contracts. Certification as a
MBE provides greater exposure for work opportunities on state funded projects.
A comprehensive comparison among these five certification programs is shown in the table below.
The table identifies the basic eligibility requirements to be certified for each program, and also
provides a glimpse of the real benefits from holding any one of the certifications shown. Also
depicted is the contract awards in dollars made within each of the federal certification programs in
fiscal year (FY) 2004, together with an overall personal evaluation of the relative merits of each
program. From EZCertify’s perspective, Federal and state contractors should attempt to qualify for
all of the certifications shown in the table. The 8(a) certification is however the most useful
marketing instrument for small businesses, primarily because it permits sole-source or non-
competitive awards and also either provides other certification advantages (e.g., SDB) or facilitates
other certifications (e.g., DBE).
COMPARISON OF VARIOUS FEDERAL AND STATE CERTIFICATIONS
Certification Certification Type
Characteristics 8(a) SDB HUB Zone STATE DBE STATE MBE
Small Business Small Small business Small Small business by Small business by
Requirement business by by SBA size business by SBA size standards SBA size standards
Definition SBA size standards for SBA size for primary NAICS for primary NAICS
standards for primary standards for Code and does not Code and does not
primary NAICS Code primary exceed $17.42 exceed $17.42
NAICS Code NAICS million in gross million in gross
Code annual receipts annual receipts
Required At least 51% At least 51% 100% At least 51% At least 51%
Ownership and ownership ownership and ownership ownership and ownership and
Control and unconditional by U.S. unconditional unconditional
unconditional control by citizens; no control by minority control by minority
control by U.S. citizens ownership persons who are persons who are
U.S. citizens that are by another U.S. citizens or U.S. citizens or
that are socially and company lawfully admitted lawfully admitted
socially and economically permanent permanent
economically disadvantaged residents of the residents of the
disadvantaged U.S. that are U.S. that are
socially and socially and
Socially Blacks, Blacks, Not required Blacks, Women, African Americans,
Disadvantaged Hispanics, Hispanics, Asian Pacifics, Hispanic
Groups Native Native Hispanics, Americans, Asian
Americans, Americans, Subcontinent Americans, Native
Asians, Asians, Asians, Native Americans,
Subcontinent Subcontinent Americans, Indian Women, and
Asians, Indian Asians, Indian Tribes, Native Disabled Persons
Tribes, Native Tribes, Native Hawaiian
Hawaiian Hawaiian Organizations, and
Organizations Organizations, Alaska Native
, and Alaska and Alaska Corporations
Native Native Individuals not
Corporations Corporations members of above
are presumed are presumed groups must
to be socially to be socially demonstrate their
disadvantaged disadvantaged; individual social
; Individuals Individuals not disadvantage
not members members of
of above above groups
groups must must
Economic Adjusted net Adjusted net None Personal net Personal net worth
Disadvantage worth<$250K worth<$250K worth<$750K, <$1.5M,
Metrics Assets<$4M Assets<$4M excluding value of excluding value of
Average two- Average two- business and equity business and equity
year year in primary in primary
compensation compensation residence of owner residence of owner
Years in 2 years in None None None None
Business business or
Requirement meet waiver
Good Character Yes No No No No
Test Firms may be
any of its
any lack of
Certification 9 years, one- 3years, Concern Firms not eligible Firms not eligible
Term time renewable must self for contracts after for contracts after
Annual certify 3-year average 3-year average
compliance annually gross receipts gross receipts
review exceed small exceed small
business size business size
Set Aside Sole source: Sole source: Sole Source: None None
Contract <$5M None <$5M
Conditions manufacturing manufacturi
<$3M all ng
other <$3M all
NAICS Competitive: other
Competitive: None NAICS
>$3M all manufacturi
other NAICS ng
Competitive Full & Open: Full & Open: Full & None None
Price Same as SDB Price Open: Price
Adjustment evaluation evaluation
Evaluation and adjustment of adjustment
Proposal up to 10% of up to 10%
using SDBs as
Reciprocity Yes: All 8(a) No: All SDB None Yes: All state DBE No: All state MBE
Among firms are firms are not firms are MBE’s firms are not state
Certifications SDB’s; 8(a) 8(a) certified; DBE certified
state DBE and facilitates
MBE state DBE and
Other Required Applicants Brokers are Principal MBE Advisory MBE Advisory
Qualifications must not eligible office must Committee Committee
demonstrate be located in Interview Interview
“potential for HUBZone
success” At least 35%
Brokers are of
not eligible employees
are met for
Procurement 3% of Federal 5% of Federal 3% of Established Typical :Total
Goals – FY prime contract prime contract Federal annually; state MBE – 25%
2005 award dollars award dollars prime and agencies establish Women – 10%
subcontracto contract specific African Americans
r award goals – 7%
dollars State agencies
Contract Award $8.4 Billion $18.5 Billion $4.8 Billion Representative for Representative for
Dollars –FY the state of MD: the state of MD:
2004 $513 Million $513 Million
(Combined awards (Combined awards
to DBE and MBE to DBE and MBE
Procurement """"" """" """" """ ""
8(a) CERTIFICATION …WHAT IS IT?
The Small Business Administration's 8(a) Program was created in 1974 to help minority and other
disadvantaged businesses to grow through a program of federal contracting preferences and set-
asides. Through the program, eligible firms can be awarded federal government contracts on a
sole-source or non-competitive basis. Contracts up to $5M for manufacturing and up to $3M for
just about everything else are available to certified firms under these non-competition bases. In
addition to this, 8(a) contractors will also be eligible for participation in limited competitions
where their competitors will be other companies like their own and not the "big guys." It is also
critical to remember that as an 8(a)BD contractor, these businesses shall also be automatically
certified as an SDB program participant.
The Federal government set aside over $8 billion in contracts for 8(a) certified firms in its fiscal
year 2004. But in spite of this, many eligible minority-owned businesses fail to take advantage of
this lucrative program because they are put off by the difficulty of the application process. Until
now that was true. EZCertify's software and services accelerate and simplify the process of small
business applying and being accepted for the SBA's 8(a) program.
Today’s 8(a) Business Development Program is strengthened and improved to be a truly effective
business development vehicle. New regulations permit 8(a) companies to form beneficial teaming
partnerships and allow Federal agencies to streamline the contracting process. New rules make it
easier for non-minority firms to participate by proving their social disadvantage. The SBA has also
implemented the new Mentor-Protégé Program to allow starting 8(a) companies to learn the ropes
from experienced businesses.
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. Participation is divided into two phases over nine years: a four-year developmental stage
and a five-year transition stage. In fiscal year 2005, more than 9,500 firms participated in the 8(a)
Program and were awarded more than $8 billion in Federal contract awards.
8(a) COMPANIES…A NATIONAL DEMOGRAPHIC PROFILE
In 2006, there are approximately 23 million small businesses operating within the United States.
Of this total, about 10 million, or 43% of these firms are woman-owned businesses, representing
the largest segment of all small businesses, and also the fastest growing defined category among
all small businesses. There are also approximately 3 million minority-owned businesses operating
within the country, comprised of about 1.2 million Hispanic, 1 million African American and 800
thousand Asian American and other minorities making up the remainder. While certainly not all of
the 13 million women and minority-owned businesses would qualify for participation in the 8(a)
program, the number of current 8(a) participant firms represents less than a fraction of one percent
of all firms that could qualify for 8(a) certification. There are a number of myths and
misunderstandings concerning the 8(a) program and Federal government contracting in general
that serve to explain why there is so little use of this most powerful procurement assistance tool by
small businesses. These myths and misunderstandings will be addressed in a subsequent section of
this 8(a) discussion.
One of the profiles of 8(a) certification that is not a myth is that your likelihood of being an 8(a)
certified company will likely be influenced by the state in which your small business is located.
The table below presents the top ten states in which 8(a) contractors are located, representing 61
percent of the total 8(a) contractor population. While it is not surprising to find such large states as
California, Texas and New York represented in this “top-ten” list, what is not immediately
apparent is that Maryland, Virginia and the District of Columbia are much more likely to be the
location of an 8(a) business than what would be inferred by their general population ranking. In
fact, over 23 percent of the entire population of all 8(a) certified firms are located within these two
states and district. At first blush, one might be tempted to associate this with the proximity of
these states and the district to the nation’s capital, the headquarters for so many Federal agencies,
and hence contracting dollars. What is not immediately evident is that small businesses located in
these two states and district are much more likely to have at least a passing acquaintance with the
existence and benefits of being 8(a) certified. In fact, a comprehensive survey conducted a few
years ago by EZCertify identified “Lack of Understanding of the 8(a) Program” as the most
frequent reason given by surveyed small businesses as the principal reason for not having applied
for participation in this program.
TOP 10 STATES FOR 8(a) CONTRACTORS
8(a)/State State Number of 8(a) Percent of All 8(a)
Population Certified Firms Contractors
1/1 California 1,053 11%
2/19 Maryland 1,006 11%
3/12 Virginia 950 10%
4/2 Texas 739 8%
5/4 Florida 591 6%
6/9 Georgia 377 4%
7/3 New York 351 4%
8/10 New Jersey 251 3%
9/51 District of Columbia 248 3%
10/5 Illinois 232 2%
Totals 5798 61%
8(a)…WHAT ARE THE BENEFITS?
There are a number of obvious benefits to becoming an 8(a) certified company, including the
Participants can be awarded sole-source Federal government contracts up to $3 million for
goods and services and $5 million for manufacturing.
Each participant may receive up to $100 million in sole source contracts during their
Participants may compete for procurements over $3 million (or $5 million for
manufacturing) that are set aside for competition only by 8(a) certified firms --which
greatly reduces the field of competition.
Participants, as certified Small Disadvantaged Businesses (SDB), can receive a price
evaluation preference of 10%, or a a procurement evaluation credit on full and open
competitive procurements for which they submit bids.
Federal acquisition policies encourage Federal agencies to award a certain percentage of
their contracts to Small Disadvantaged Businesses. To speed up the award process, the
SBA has signed Memorandums of Understanding (MOUs) with many Federal agencies
allowing them to contract directly with certified 8(a) firms.
Recent changes permit 8(a) firms to form joint ventures and teams to bid on contracts. This
enhances the ability of 8(a) firms to perform larger prime contracts and overcome the
effects of contract bundling (the combining of two or more contracts together into one large
There are also a number of not-so-obvious reasons to become 8(a) certified. Ten of these are:
1. You will be forced to answer some important questions and do some right things up - front
because of the application and associated business planning processes. Among the major
causes of business failures today is the fact that entrepreneurs don’t set aside the time to
establish a vision, business objectives and a business plan.
2. You will limit your competition for business as an 8(a) contractor to other, similar
companies and not necessarily the behemoths of the industry. You have an opportunity to
compete on price or innovation in a broader sense than you would if you were competing in
the full and open marketplace. The 8(a) arena allows you to sharpen your competitive skills
against players of similar capabilities before you have to enter the big bad world of full and
open competition. Moreover, you also will receive important price adjustment or proposal
evaluation factor preference benefits over non-SDB competitors in full-and-open
3. You will have the opportunity to interface with other businesspersons who are experiencing
the same issues facing you. Generally, there is a collegial, cooperative spirit among 8(a)
and SDB companies, an esprit de corps that says we’re all in this together and therefore I’ll
help you out unless it deals the most competitively sensitive aspects of my business.
4. You will be able to take advantage of a sophisticated support network of people at the
SBA. SBA employees generally will treat you with sensitivity, respect and courtesy. They
will respond to your requests for information and guidance, and will extend to you a
professional helping hand.
5. You will be able to grow your business quickly and without extensive capital investment, if
that is what you choose to do. Participation as an 8(a) and/or SDB doesn’t necessarily
mean small contract levels. Today, these companies compete for contracts worth hundreds
of millions of dollars. Adequate preparation for and the capture of just one of these
contracts could provide a company with annual revenues in the tens of millions of dollars.
Outside of the 8(a)/SDB arena, it may take decades for small businesses to achieve
anything approaching this level of annual revenues; most never do.
6. You will be introduced to the politics of business. The 8(a) and SDB programs are a
political creation. Designed to bring minority business people into the political arena, the
programs deal extensively with government regulations, Congressional appropriations and
legislation, and oversight by the Executive Branch of government, which is tasked with
governing and operating the 8(a) program. Ownership of an 8(a) or SDB company could be
your best opportunity to sit at the same table with the President of the United States, to
testify before Congress on legislation dealing with small and minority business, or to meet
with your U.S. Senator to discuss the ramifications of pending legislation.
7. You can take as great a position in the leadership of the minority business community as
you’re willing to take on. If you’re looking for an outlet for your leadership skills and are
willing to put in the effort, there are countless opportunities at the local and national levels
within the minority business community that would suit your talents well.
8. You will be able to take advantage of myriad business educational opportunities dealing
with just about any issue in business that you can think of. The SBA hosts many
educational seminars, courses and even graduate degree programs centered on the needs of
minority businesspersons. Most of these programs are free, and require only that you to
expend the time to take advantage of them. Typically, these educational events will feature
such topics how to develop a business plan, conducting marketing and sales, how to
develop a financial system, how to bring products or services to market in record times, or
how to recruit a proper staff. The subjects cover essentially every aspect of business life,
and are available to you simply because you are aware of them as a result of your
participation in the 8(a) and/or SDB Program.
9. You will experience the satisfaction of growing a significant business from only your
dreams, and enjoy great triumphs and personal relationships along the way. If you have the
typical ego that most entrepreneurs have, then building a monument to yourself and your
accomplishments probably is something you would like to achieve.
10. You should live very comfortably, and make a king’s ransom when you decide to sell your
business. Rarely do small businesspersons get the opportunity to build a business from
Ground Zero to an entity worth $5 million or $25 million or $50-plus millions of dollars.
This level of business growth and success, however, is being achieved every year by more
and more 8(a) and SDB-certified companies
8(a)…THE MYTHS AND THE TRUTHS
A little knowledge concerning SBA certification can be a dangerous thing. A lack of knowledge
can also be very harmful. Most damaging of all is the incorrect knowledge or misinformation that
EZCertify has heard from more than a few members of the small business community concerning
the SDB or 8(a)BD certifications. Left unchallenged, these misunderstandings grow into myths
that are perpetuated, exaggerated and become the "pseudo-reality" of how the small business
community, many of which are qualified to be certified, think about and act upon the SBA's
certification process. Here are just ten of these myths that we've heard and a few of the facts and
conclusions about each:
"You have to be in business for two years before applying"
There is no "time in business requirement" for the SDB certification. You may apply and be
certified, even if you've recently formed your business.
The 8(a)BD Certification process does include a "Potential for Success" application criteria, that
includes a Length of Time in Business Requirement of 2 full years... or an applicant may seek a
waiver by addressing the following factors:
1. Substantial business management experience of the individual(s) upon whom eligibility is
2. Information that the applicant concern has demonstrated technical experience to carry out its
business plan with a substantial likelihood for success, if admitted to the 8(a)BD program;
3. Information to demonstrate that the applicant concern has adequate capital to carry out the
business plan as a Participant;
4. Information that documents the applicant concern's record of successful performance on
contracts from governmental and/or non-governmental sources in the firm’s primary industry
5. Information that demonstrates that the applicant concern has the ability to timely obtain the
personnel, facilities, equipment and any other requirements needed to perform contracts as a
In short, if you are an experienced businessperson, with a business plan, have sufficient funds to
support your business operations, previous or current contracting experience and possess a few of
the basic building blocks of a successful business, you can be granted a waiver of the "2-year
Your length of time in business need not prevent you from SDB or 8(a)BD certification.
"Federal Government doesn't purchase what my business sells"
The Federal Government is the single largest customer in the entire world. The closest analogy is
that it resembles an international, mega-corporation, with its various departments and agencies
involved in just about any facet of life imaginable. Whereas a large portion of the Federal
procurement budget is spent on defense, in 2004, there was more than 88 billion dollars in
contracts awarded by civilian agencies (e.g. Energy, NASA, GSA, Transportation, etc.). Even in
the case of defense spending, a significant percentage is spent on non-weapon associated items,
such as automatic data processing equipment and services, communication equipment and
services, fuels, office supplies, medical services, clothing, etc. Congress ensures that this
spending is also spread out across the entire country, with military bases, agency installations and
large prime contractors located in every state and territory in the U.S.
The Federal Government purchases virtually everything at thousands of locations nationwide.
"Most small business owners are too wealthy to qualify"
The financial metrics that qualify an applicant for either of the two SBA programs are quite
generous. For example, the SDB program sets a standard of a $750K net worth versus the $250K
net worth for the 8(a)BD program (at time of application). In reality, even this "net worth" is an
adjusted number. The SBA subtracts the equity held in the applicant's primary residence, as well
as the value of the applicant's holdings in their business from the classical net worth calculations.
Also, any assets held jointly by an applicant and their spouse are allowed to be divided in half for
these net worth calculation purposes. The other financial metrics are even more generous.
Specifically, the average two-year compensation limitation allows an 8(a) applicant to be in the
upper one percent of all U.S. taxpayers, at $200,000. Also, the personal assets of any 8(a)
applicant can be up to $4,000,000 and still be considered economically disadvantaged
According to an Urban Institute study, non-minority men and women business owners have an
average net worth of less than $100K and $50K respectfully, whereas minority men and women's
net worth's are even less!
The vast majority of small business owners can readily prove their economic disadvantage.
"You can't pay yourself well and also be certified"
There are no regulatory requirements establishing maximums for the income of an applicant for
either the SDB or 8(a)BD programs, although income is one of several factors used to determine
their economic disadvantage. You're probably safe under the following conditions:
Annual Income of Annual Sales of
$150,000 $0 - $1.0M
$200,000 $1.0M - $2.0M
You can compensate yourself very well while participating in the SDB or 8(a)BD programs.
"Only small dollar contracts are available to certified contractors"
In FY2004, the average 8(a)BD award was $71K, versus an average for all awards of $30K. The
following table clearly shows that certified contractors can reap significant rewards from their
participation in these programs.
Service/Product Contract Value
Contractor Procured ($000)
JMC Construction, Inc. Prefabricated and
High Technology Solutions Professional
Blackinton & Decker, Inc. Construction/Office
Jackson Tull Chartered Administrative
Engineer Support Services $32,500
Chugach Engineering Service Facilities Operations
Colsa Corporation R&D Missile &
Small business does not necessarily translate into small-sized contracts.
"There is not much business set-aside or awarded to certified companies"
FY2004 Actual Performance:
SDB - $18.5B; $43K/Award Average
8(a)BD - $8.4B; $71K/Award Average
Department SDB 8(a)BD
Defense $11.9 B $5.7 B
GSA $480 M $246 M
Energy $306 M $213 M
Veteran's Affairs $726 M $431 M
NASA $747 M $291 M
HHS $718 M $233 M
Justice $257 M $64 M
Agriculture $355 M $158 M
Transportation $246 M $127 M
DHS $424 M $226 M
SDB and 8(a) contracting represents over 9% of all Federal Government procurement dollars.
"The advantages of certification are not worth the effort"
The single most obvious advantage of SDB certification is that it will help applicants win more
contracts than they would otherwise. The ten (10) percent price adjustment or the evaluation
factor benefits of SDB certification can provide the difference between winning and losing.
The competitive benefits of certification represent real and significant sales advantages.
"I'm already certified as a WBE, DBE or MBE in my state"
Certification as a WBE, DBE, or MBE with your state DOT or other certifying municipalities
within your state is a valuable business credential. Additionally, "quasi-universal" certifications,
such as that promoted by the Minority Suppliers Development Council and National Women
Business Owners Corporation are also very important business development tools.
None of these certifications are currently recognized at the Federal Government level for either
the SDB or 8(a)BD programs. Principal among the differences between these programs and the
Federal Government programs is the close scrutiny of an applicant's social and economic
Only SDB and 8(a)BD certifications provide competitive advantages at the Federal level.
It costs too much, takes too much time, is too complex, and the probability of success is too low"
Prior to EZCertify.com, this myth was "right on". However, with EZCertify.com, today is a
different matter, as you can see from the table below:
Factor Pre-EZCertify Post-EZCertify
Time to be
90-360 days 21 days
Cost $10K - 25K $1150-Package Review
$4-6K- Package Preparation
Effort 24 hours
Cautions and Tips, to make sure
you provide the SBA with what
they need to see
Expensive FREE On-Line Advisor (with
Consultants any purchase)
Head Start to
8(a) and other certifications can
None be completed in less that 1 hour
after completing SDB
Success Rate <30% >99%
Guarantee None 100% money back guarantee
Getting certified using the EZCertify software or services can save money, time and guarantee
"Non-minority business owners can't easily prove their disadvantage"
First, businesses owned and controlled by members of the following designated groups are
already presumed to be socially disadvantaged:
Asian Pacific Americans
Subcontinent Asian Americans
The above groups are left to prove their economic disadvantage only.
Second, non-minority women and others (those who are not members of one of the above
designated groups), can, under the new regulations, more easily prove their social and
economic disadvantage. The door has been opened by the change in the evidentiary standard
and also by EZCertify which provides a roadmap and associated real-life examples of
successful social and economic claims by persons, not members of the designated groups.
Successfully claiming and proving disadvantage is no longer a "virtual mission impossible."
THE 8(a) APPLICATION…WHAT IS IT? AND SOME CAUTIONS AND TIPS
Despite what you’ve heard, the 8(a) application was designed to prevent unqualified applicants
from being certified…Remember “Wedtech?”
Here’s what it really is:
1. An unsolicited proposal to the SBA to
join a very exclusive “club”
2. Your chance to derive unique and
significant procurement assistance
3. Hundreds of pages of length
4. “Not just a bunch of forms”
5. Filled with “traps” to catch
undeserving or otherwise unqualified
6. A test of your perseverance, patience
and passion to succeed
7. An opportunity to get your company
governance in order
8. A prelude to responding compliantly
to Federal government RFP’s.
9. A chance to meet and interact with
persons who can assist you to succeed
10. Only the “first step” to being eligible
for 8(a) contracts!
The 8(a) application package consists of a few forms, some attachments used to describe
responses on the forms that will cause the SBA to look at your application closely, and most
importantly, a number of enclosures that constitute 99% of the reasons for SBA questions and
The Forms – “The Least of Your Problems”
Shown in the table below are each of the distinct forms that must be included in an 8(a)
application package, together with an identification of the person or entity that must complete
these forms, some traps and tips to overcome typical SBA issues when they examine the forms.
Form Completed Some Traps Tips
SBA Form 1010 The applicant NAICS Codes are Complete EVERY data
Application for firm different than as field; Mark ANY that
8(a)Certification reported on taxes; does not apply as N/A;
persons other than Have each person who
applicants have access completes a 912, sign
to bank account and date.
IRS Form 4506-T The applicant Taxes not requested Complete EVERY data
Request for Copy firm for three past years or field; Mark ANY that
of Transcript of as many as company does not apply as N/A;
Tax Form has been in business. Have principal
SBA Form 1623 The applicant Virtually none Complete EVERY data
Certification firm and field; Mark ANY that
Regarding principal does not apply as N/A;
Debarment, applicant Have principal
Suspension and applicant sign
SBA Form 413 Each Applicants provide Complete EVERY data
Personal applicant and combined versus field; Mark ANY that
Financial their spouse, separate statements; does not apply as N/A;
Statement(s) independently Adjusted Net Worth Check your math;
test failed; Backup applicant signs his/hers
data is incorrect or statement and spouse
missing; Failure to signs hers/his statement
items; Assets or
liabilities not properly
split or allocated
IRS Form 4506-T Each Taxes not requested Complete EVERY data
Request for Copy applicant and for two past years. field; Mark ANY that
of Transcript of their spouse; does not apply as N/A;
Tax Form one if a joint applicant and spouse
return; two if sign, in combined filing
spouse files case or provide two
separately signed form in
individual filing case.
SBA Form 912 Each Failure to provide Complete EVERY data
Statement of applicant, details in cases of field; Mark ANY that
Personal History non- indictment, parole, does not apply as N/A;
disadvantaged probation, previous Each individual signs
principal, arrest or conviction; his or her history alone.
owner of Fingerprint card not
more than supplied or not SBA
10%, each sanctioned, or folded,
director, mutilated, hole-
management punched; In the case
member, of women applicants,
partner and/or former names, dates of
key employee use not provided
of the firm
The Attachments – “Explaining Off-the-Road Behavior”
If you answer YES to any questions on the SBA Form 1010, you shall have to explain and the
SBA, unfortunately, provides no guidance as to what constitutes an acceptable explanation.
EZCertify has developed and used successfully a complete set of templates that are used to provide
a comprehensive explanation for any YES response, and these are acceptable to the SBA. An
example of these templates is shown in the figure below.
Example of 8(a) Application Attachments
The Enclosures – “Where the Rubber Meets the Road”
Shown in the table below are each of the distinct enclosures that must be included in an 8(a)
application package, together with an identification of the person or entity that must complete
these forms, some traps and tips to overcome typical SBA issues when they examine the
enclosures. Unfortunately, all of the enclosures required by the SBA are not identified as needed
by them in their application instructions.
Enclosure Completed By Some Traps (Examples) Tips
Stock Applicant firm, if Failure to provide front and Provide all certificates,
Certificates, a corporation back image of all outstanding ensuring that all transferred
Stock Ledger, etc. certificates certificates are completed on
back side, and track the stock
ledger; Provide stock
purchase agreements and
proof of payment for stock
Certificate of Requested from Certificate more than 90 days Order certificate no earlier
Good Standing the state, if a old than one month from
corporation or an expected application
LLC submission date
Financial Data The applicant Balance sheets and P&L Provide signed certification
firm Statements at too high a level; of accuracy, etc. Provide
negative Total Equity; AR/AP QuickBooks Standard level
aging missing; data too old of detail; Fix the negative
for the SBA total equity issue before
Company Tax The applicant Unsigned returns; incomplete Sign all returns and provide
Returns firm returns; no proof of tax cancelled checks to prove
payments payment of company taxes
Statement of Requested from Failure to provide or indicate Provide bonding letter or
Bonding Limit the bonding that bonding not required to binder that identifies singe
surety company execute business contract and aggregate
contract bonging levels
available to the company; If
not required, tell SBA in
Company The applicant Bylaws, operating and Get informed assistance to
Governance firm partnership agreements not modify bylaws, etc. Provide
Documents tailored to meet 8(a) following documents, despite
requirements; Failure to not being asked to on the
provide documents NOT current Form 1010; 1)
specified on 1010 Insurance binder, 2)Current
4)History of Business, 5)
IRA and other retirement
account statements, and 6)
copies of complete sample
contracts, invoices/proof of
payment, and “attaboy”
letters from clients
Business and The applicant Failure to provide or indicate Provide copies or provide
Special Licenses firm that licenses not required to written statement that city,
operate business county and state that you
operate in do not require
these licenses to operate your
type of business.
Loan Agreements The applicant Failure to provide for each Provide complete copy of all
firm and any balance sheet entry or less loan documents, notes, and
party with loans than 2 year ownership interest proof of payment currency
to, from or about transfer; Proof of payment or
the applicant promissory notes missing
Community Applicant’s and Failure to “do the math “Ensure that when the
Property their spouse, if correctly”, when preparing the dancing stops, the applicant’s
Agreement living in one of agreement still unconditionally own at
10 community least 51% of the applicant
property states firm”.
Personal Tax Applicant and Unsigned returns; incomplete Ensure that applicant and
Returns spouse returns; no proof of tax spouse signs the returns;
payments; Failure to provide Provide the W-2’s, and proof
W-2’s that tie to Line 7 of that you have paid your
1040 taxes; If you have a past
taxes owed problem, secure a
repayment agreement with
the IRS before applying
Narrative All applicants Failure to provide convincing Be detailed e.g. names dates
Statement of regardless charges and adequate organizations, titles, what
Economic membership in evidence that incidents that they said or did to you, what
Disadvantage designated group affected personal or business you did and how it effected
economics were as a result of your personal or business
personal prejudice/bias. “bottom-line”; Use the street
language involved in the
incident; If they used the N,
S, C, R or I word, tell the
SBA about it; Get a “buddy
letter” if possible; Provide
any written evidence to
substantiate your case.
Narrative All applicants Failure to provide convincing Same as above with
Statement of not members of a charges and adequate emphasis on your education,
Social designated group evidence that incidents that employment by other and
Disadvantage affected personal or business your business history, and
entry to or success within how this treatment effected
business world were as a your ability to enter and
result of personal prosper in your selected
Personal Resumes All applicants Failure by applicants to Tell the SBA up front that
and any other indicate that they manage and you are the President, CEO,
team member control the day-to-day Managing Member, General
who completes a operations of the business; Partner, etc of the firm;
Form 912 Other employers and dates not Include duties that are
provided; Failure to provide ownership and management
convincing evidence that oriented as well as the
applicant possess the “operational stuff” that you
managerial and technical do; If the applicant was a
skills to run the business. former co-worker, employee,
etc of one of the other team
members, ensure that you
have addressed this issue
HOW DO YOU GET CERTIFIED AND IN RECORD TIME? -THE EZCERTIFY OPTION
I’m sure that you’ve heard that getting 8(a) certified can take up to a year or more. You may have
even heard that 70% of all applications are rejected, and almost every application is challenged, at
least once in the process.
Why does it take so long, and why are so few applications accepted? The answer is multifold:
First, the SBA is severely understaffed and overworked, and the backlog of applications has
grown significantly, with the closure of one of the three regional application evaluation centers.
Second, the guidance provided by the SBA is incomplete and flawed. By this, we mean that if you
follow the instructions “to the letter”, you shall certainly have your application challenged, or they
will ask you for additional information, not previously disclosed to you as necessary, or you will
Third, unlike Federal government RFP’s, which demand a standard structure for organizing a
proposal, the SBA currently accepts applications for evaluation, that are organized in myriad
random orders, and therefore, the evaluators spend an inordinate amount of time determining
whether “all of the pieces” have been provided, only because it is difficult for them to locate
required data, in what amounts to a 3-4 inch stack of paper, the likely size of a typical application
Fourth, most challenges to your application will occur as a result of the SBA’s examination of the
information contained within the many enclosures (e.g., company and personal financial
statements, taxes, economic/social disadvantage narratives, resumes, etc.) that you must provide as
part of your application. However, the SBA doesn’t provide applicants with a “clue” as to what
they are looking for, within these enclosures that will jeopardize your chances for certification.
Fifth, and certainly not the least important, the SBA does not provide adequate, detailed, and
timely personal, or one-on-one guidance to applicants, as they struggle to understand and complete
the application process. “Just send your application to us, and we’ll tell you if it’s OK”, or “You
apply and we evaluate”, are representative of the SBA’s attitude to providing the informed,
professional and “nitty-gritty” type of guidance needed to complete an application that will be
accepted, without major issues.
Why is it then that most EZCertify clients can get certified in what might be considered
“record time”? Well, you might want to ask some of our clients such as Wanda Alexander of
Horizon Technology, who got SDB certified in less than 14 days, or Michael Andrews of Multi
Communication Installations, who got 8(a) certified in 28 days, from start to finish or Hetal Patel
of Aurotech, who got certified in just over a month.
How is EZCertify capable of assisting its clients to be certified, in what some might consider
“record time”, despite the current issues described above?'
First, and foremost, we make it easier for SBA evaluators to review an 8(a) package prepared by
us, or by our clients, using our “expert-system–based” application preparation software. Our
packages are complete, well organized and anticipate the SBA’s questions, even before they pose
Second, we know what the SBA is looking for in your application, even if their instructions fail to
tell you, since we’ve been involved in close to 4000 successful applications to-date. We’ve seen,
and responded to hundreds of the SBA’s letters that challenge, or would threaten to reject an
Third, our software, package review or package preparation services, result in an application
package that is totally compliant with the SBA’s requirements. The packages submitted by our
clients are organized in a standard SBA accepted order, with tabs, a table of contents, dividers
properly labeled, all data fields completed, or marked as not applicable, and even a cover letter that
is designed to accompany your application package.
Fourth, we are intimately familiar with the reasons that the SBA needs to see every enclosure to
your application package. We know what data will be extracted from these enclosures by the SBA
evaluators, and alert our clients to issues within these enclosures, before they submit their
Fifth, and also certainly not the least important reason, is that we answer our client’s detailed and
unique questions about the application process, “on the spot”, in real-time, over the phone, and
using our email-based, Ask the Expert Free Service, that is provided with all of our software
products and services.. They call and we provide specific, detailed answers and suggestions as to
how to overcome an issue. If there is a way to circumvent a problem, that will cause an application
to be rejected, we provide our clients with a successful way around the problem, “all within the
current regulations, and the law”.
If you want to get your 8(a) or SDB application package prepared and approved within “record
time”, you only have to visit us at our website at www.ezcertify.com, or call us, toll free, to talk to
one of our certification “record-making” experts at 866-681-4970.
ADDITIONAL EZCERTIFY 8(a) APPLICATION SERVICES
No two 8(a) applicants are the same. Each applicant requires customized assistance to
successfully be 8(a) certified. In recognition of this fact of business life, EZCertify provides a
number of specialized services. These services include the following, in addition to our expert
software, package review and total package preparation services:
8(a) Business Plan Preparation Service
8(a) Length of Time in Business Waiver
8(a)/SDB Economic Narrative Service
8(a)/SDB Social Narrative Service
8(a) Participation Compliance Service
Emergency Certification Rescue Service
Each of these services is described below:
8(a) Business Plan Preparation Service - The 8(a) Business Plan Preparation Service is designed
for newly certified 8(a) firms who do not have a 8(a) Business plan (SBA Form 1010C) approved
with the Small Business Administration (SBA). The SBA will not pronounce you capable of
participating in the 8(a) program until you've prepared, submitted for SBA review, and have
received approval of what is called your "8(a) Business Plan"?
Already have a business plan? That's a good first step. But, the SBA's 8(a) Business Plan is almost
guaranteed to be totally different from what you've already developed, no matter how
comprehensive your existing plan might be.
Without some expert assistance, completing the 8(a) Business Plan could take you and your team
more than a month to complete and you could easily spend hundreds of hours understanding and
responding to the SBA's fifty-two "sophisticated" questions and request for data. Fortunately,
EZCertify has available a team of experts in helping 8(a) companies prepare the required plans,
and it can be completed in as few as ten days.
8(a) Length of Time in Business Waiver - The 8(a) Length-of-Time in Business Waiver Service
is designed for clients that want to apply for 8(a) Certification and have not been in business two-
years and need to prove the SBA "Potential for Success" requirement.
The SBA does require that a business that has not been in business for two-years, submit a
“Request for a Length-of-Time in Business Waiver”. The Length-of-Time in Business Waiver is a
substantial document. Without tons of work on your part, or thousands of dollars spent on outside
expert assistance, most qualified small businesses just “pass” on the certification opportunity,
having better things to do in running their business. EZCertify will prepare the waiver and
convince the SBA that you and your business have a real “potential for success”.
8(a)/SDB Economic Narrative Service - The 8(a)/SDB Economic Disadvantage Narrative
Service is designed for clients whose ability to compete in the free enterprise system has been
impaired due to diminished capital and credit opportunities as compared to others in the same or
similar line of business who are not socially disadvantaged. The SBA requires that all applicants
applying for 8(a)/SDB certification complete and submit this narrative.
EZCertify will prepare the economic narrative and convince the SBA that you and your business
have been subjected to Economic Disadvantage.
8(a)/SDB Social Narrative Service - The 8(a)/SDB Social Disadvantage Narrative Service is
designed for clients who have been subjected to racial or ethnic prejudice or cultural bias within
the American society because of their identities as members of groups and without regard to their
individual qualities. The social disadvantage must stem from circumstances beyond their control.
The SBA requires that all applicants applying for 8(a)/SDB certification who are not members of
a designated group complete and submit this narrative.
EZCertify will prepare the Social Narrative and convince the SBA that you and your business
have been subjected to Social Disadvantage.
8(a) Participation Compliance Service - This service is for 8(a) certified companies to prevent
them from being prematurely terminated from the 8(a) program, prior to the expiration of their 9-
year program term.
Remember the terms of the Participation Agreement you agreed to, and signed, shortly after
receiving the “good news” about being 8(a) certified? The truth is that over 1000, 8(a) certified
firms have been faced with an early exit from the 8(a) program, over the last few years, simply
because they got the “bad news” that they “had failed to live up to the terms of their Participation
The complex, numerous and somewhat unclear terms of their Participation Agreements were, in
almost all cases, innocently forgotten by these 8(a) firms, much like most of us forget our well-
intentioned New Year’s resolutions.
You say, “It wouldn’t happen to you. Well, let’s just see!
Forget to send your quarterly or annual financial statements, and personal income taxes,
within the time guidelines, or
Hire a new Vice President or key employee and let it slip your mind, or
Get behind in paying your company or personal taxes, or
Focus all of your efforts on booking 8(a) contracts, at the expense of commercial or non-
8(a) marketing, or
Compensate yourself or your relatives working in the company above what the SBA
considers excessive, or
Hire a marketing consultant, and worse yet, reward them for success, and forget to tell the
Start up, or become a major investor in a new company, without seeking SBA blessing, or
Literally thousands of other, seemingly innocent, and otherwise legal business decisions,
and you will certainly be “IN MATERIAL BREACH OF THE TERMS AND
CONDITIONS OF YOUR PARTICIPATION AGREEMENT, AND YOU WILL BE
TERMINATED FROM THE 8(a) PROGRAM.
Still don’t believe that the SBA would terminate you for what you might consider just a “technical
violation”, or for being more concerned with running your business, versus “more government
paperwork”? Wrong! The SBA is “deadly serious” about enforcing the terms of your Participation
Agreement, and you should be equally concerned!
We at EZCertify know first hand, how difficult, time consuming, exasperating, and costly it was
for you and your company to become 8(a) certified. We have struggled side-by-side with many
companies, through the certification process, and then, through the preparation of their 8(a)
business plans. We now offer you the choice of never having to “face early 8(a) program
termination”, simply because you forgot or were too busy to comply with the complex, numerous,
and sometimes unclear terms within your Participation Agreement.
Emergency Certification Rescue Service – This service is for firms that have had their 8(a)
Application Packages returned by the SBA, for major deficiencies or rejected in their entirety.
It’s a well known fact that the SBA returns over 70% of all submitted 8(a) Application Packages
for a host of reasons. After working diligently for sometimes months, 8(a) and SDB applicants are
disappointed and disheartened to receive a letter from the SBA indicating that their applications
cannot be further evaluated because of a long “laundry list” of factors, or that for some
misunderstood rationale, the SBA has concluded that the applicant is not qualified to be 8(a)/SDB
certified. Receiving these letters, too many applicants just “pack-it-in” and either don’t respond to
the SBA, allow the permitted time to reply to elapse, or respond to the SBA’s concerns with
additional inadequate information, only to be formally denied their certification, despite the fact
that they may be “fully qualified”.
EZCertify has seen countless of these letters, even some directed at our clients, who may not have
followed the precise directions in our certification software, or followed our advice in our Package
Review or Preparation Services. Our review of these letters, almost always indicate that the SBA’s
concerns can be dealt with, a compliant response to these notorious letters can be developed, and
the seemingly hopeless cases can often be converted into successful certifications. We will prepare
a comprehensive response to these “infamous SBA letters” and guarantee that you will be
certified, if we take you on as our client.