How to Successfully Apply for SBA 8(a) BD Program Certification Anthony Ruiz District Director SBA San Antonio District Office November 11, 2015

Washington Metropolitan Area District Office The Federal Procurement Market $500 Billion + per year (2014) U.S. Government: The World’s Largest Customer Federal Contracts = San Antonio District Office

Washington Metropolitan Area District Office Small Businesses: 23% Small Business Market Segment PROCUREMENT TARGETS: $500 Billion per year San Antonio District Office

Washington Metropolitan Area District Office Defined by number of firm’s employees OR Defined by firm’s annual revenues (Different for each industry, organized by NAICs code) What is a Small Business? San Antonio District Office

Washington Metropolitan Area District Office SBA’s Resources & Programs  Contracting  Counseling  Capital/Small Business Financing  Exporting San Antonio District Office

Washington Metropolitan Area District Office What part does the SBA play in Contracting? 3 Roles 1. Keeping Agency Score:  SBA negotiates annual procurement goals with each Federal agency.  Ensures that the combined goals > 23%  Reviews each agency’s results  Issues Annual Small Business Procurement Scorecards for each agency plus for the entire Federal Government. San Antonio District Office

Washington Metropolitan Area District Office What part does the SBA play in Contracting? 2. Counseling, Financing and Training:  SBA’s Resource & Contracting Partners offer Contracting counseling, training and matchmaking events throughout our region.  SBA’s Resource & Contracting Partners help business owners find and bid on procurement opportunities and assist to seek financing.  SBA WMADO provides compliance and business development assistance to its 8(a) firms. San Antonio District Office

Washington Metropolitan Area District Office What part does the SBA play in Contracting? 3. Certifications SBA-Certified: HUBZone Empowerment Contracting Program 8(a) Business Development Program Self-Certified: Small Disadvantaged Businesses (SDB) Service Disabled Veteran-Owned Businesses Women-Owned Small Businesses (WOSB) San Antonio District Office

Washington Metropolitan Area District Office Scope of SBA Certifications SBA certifications only apply to Federal Agencies in the Executive Branch. State, County, and Municipal agencies as well as other branches of the U.S. Government may have their own certification programs. Certification by one of these authorities does not automatically confer certification by any others. San Antonio District Office

Washington Metropolitan Area District Office What does the SBA 8(a) Business Development Program offer? Helps eligible small disadvantaged businesses grow and become sustainable:  Training in business, finance, management & marketing/sales  Opportunities to team with other companies  Support when competing for Federal contracts San Antonio District Office

Washington Metropolitan Area District Office  Program participation: Up to 9 years  Program participation divided into 2 stages: Year 1 – 4 Developmental Year Transitional  Must maintain eligibility and compliance throughout 8(a) BD Program participation. The 8(a) BD Program San Antonio District Office

Washington Metropolitan Area District Office 8(a) Eligibility United States citizen with documentary proof Socially & economically disadvantaged individual--Documented Own unconditionally at least 51% of concern--Documented Control & Manage the firm on a full-time basis--Documented Good character - not debarred, suspended, parole or probation Registered in System Award Management (sam.gov) database Two (2) years business history in primary industry classification, as shown with tax returns (may sometimes be waived) Business must be small per SBA’s size standards--Documented San Antonio District Office

Washington Metropolitan Area District Office Who is Socially and Economically Disadvantaged? Socially disadvantaged persons have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups. People are economically disadvantaged if their ability to compete in the free enterprise system has been impaired due to diminished access to capital and credit. San Antonio District Office

Washington Metropolitan Area District Office In the absence of evidence to the contrary, individuals are presumed to be socially disadvantaged if they are a U.S. Citizen and a member of one of these groups:  African American  Hispanic American (includes individuals of Spanish & Portuguese descent)  Asian Pacific American  Subcontinent Asian American  Native American San Antonio District Office

Washington Metropolitan Area District Office Persons not members of designated groups may be eligible if they can demonstrate their disadvantage:  The disadvantage may stem from color, ethnic origin, gender, physical handicap, long term environmental isolation, or other similar causes.  The applicant must have personally suffered this disadvantage in the United States.  The disadvantage must be substantial & chronic.  The discrimination must have negatively impacted on business advancement.  Case must be established by a preponderance of evidence. San Antonio District Office

Washington Metropolitan Area District Office Waiver of Two (2) Year Rule Requirement: Applicant must demonstrate: 1. Management experience 2. Technical expertise 3. Adequate capital 4. Successful performance 5. Ability to perform on a timely basis San Antonio District Office

Washington Metropolitan Area District Office 8(a) Net Worth Criterion: After excluding the individual’s equity in the firm, equity in the primary residence, & IRA, Applicant’s Net Worth may not exceed $250,000.* Applicant’s Net Worth Calculation: lessequity in primary residence lessequity in business lessofficial retirement account Equals Adjusted Net Worth ( which must not exceed $250,000 ) * When married, separate statements from each spouse to show each individual’s joint or community property shares and separate property. San Antonio District Office

Washington Metropolitan Area District Office Applicant’s Total Compensation Test  13 CFR (c)(3)  Cannot exceed average of $250,000 per year adjusted gross income averaged over past 3 years upon application.  Upon 8(a) approval, cannot exceed $350,000, averaged over past 3 years.  Exception: LLC or Sub-S Corp: Evidence reinvested in the firm or paid taxes San Antonio District Office

Washington Metropolitan Area District Office Total Assets Test  13CFR (c)(4)  FMV of applicant’s individual total assets (less only the IRA/401K) plus book value of applicant’s firm cannot exceed $4 million at time of application.  Not exceed $6 million after 8(a) approval San Antonio District Office

Washington Metropolitan Area District Office Potential for Success Tests  Past Performance of Your Business  Experience & Success in Contracting  Your Company’s Financial Condition  Your Technical Knowledge and Experience in Your Primary NAICS Code  Your Management Experience  Scope of Your Firm’s Available Financing  Personnel, Facilities & Equipment San Antonio District Office

Washington Metropolitan Area District Office 8(a) Application: Govt. Forms  1010, 8(a) Business Development Program Application (Section I: Business Profile, Sect. II: Mgmt. & Admin., & Sect. III: Supporting Documents (03/31/2014)  1010-IND, Individual Information (03/31/2014)  413, Personal Financial Statement (01/31/2018) San Antonio District Office

Washington Metropolitan Area District Office 8(a) App. Govt. Forms (Cont’d)  912, Statement of Personal History (04/30/2016); Citizenship Proof if f.b.  1623, Certificate Regarding Debarment, Suspension & Other (10/88)  1790, Report Rep Used & Compensation Paid (10/31/2015)  4606-T, Request for Transcripts of Tax Returns-both co. & self (Rev. 08/2014) San Antonio District Office

Washington Metropolitan Area District Office Getting Started to Apply for 8(a)  Go to Apply for 8(a) Certification; follow Contracting Menu:  Getting Started; Contracting Support; Determining Business Size  About the 8(a) Business Development Program  Eligibility Requirements  How to Apply San Antonio District Office

Washington Metropolitan Area District Office Getting Started: How to Apply  Follow the prep steps in the SBA website  Study the 8(a) Application Checklist  Complete the 8(a) application “draft copy”  Gather all your required Company Docs  Complete “draft” copy of Govt. Forms  Proofread 100% before applying on line. San Antonio District Office

Washington Metropolitan Area District Office 8(a) App Checklist (Cont’d) Who is required to submit all of this documentation? ALL “PRINCIPALS”:  Owners of 10% or more  Directors and Officers  Members or Partners  NOTE: All the above is subject to SBA’s request for additional information. San Antonio District Office

Washington Metropolitan Area District Office 8(a) Application Checklist REQUIRED DOCUMENTS TO PREPARE AND COLLECT IN ADVANCE: Review Handouts in Workshop San Antonio District Office

Washington Metropolitan Area District Office For More Information: Contact Procurement Technical Assistance Center (PTAC), San Antonio San Antonio District Office