2. 8(a) Business Development Program (An Overview)

3. 2 What is the 8(a) Business Development Program? 8(a)BD Program

4. 3 8 (a) BD Program began as a public law and was named after Section 8(a) of the Small Business Act 1953 (Section 204 of Public Law 100-656). The 8(a) BD Program is governed by 13 CFR §124.100. The 8(a) BD Program was incorporated in Part 19, Small Business Programs of the Federal Acquisition Regulations (FAR) in 1984.

5. 4 8(a) BD Program Objectives: o to promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals… o to promote the competitive viability of such concerns… o to clarify and expand the program for procurement by the United States…

6. 5 START = date of approval Year1 2 developmental 3 stage 4 Year5 6 transitional 7 stage 8 9 Continuation in the program is dependent on the firms continuing eligibility as a socially and economically disadvantaged owned/operated firm and continued compliance with the 8(a)BD participation agreement. Term of Participation

7. 6 Voluntary Early Graduation Refers to a participants decision to withdraw from the 8(a) BD Program prior to its program term date due to meeting or exceeding its business targets, goals and objectives. This is initiated by the Participant. Early Graduation Refers to the participant has successful completed the 8(a) BD Program by substantially achieving the business targets, objectives, and goals as established in its business plan prior to expiration of its program term date, and has demonstrated the ability to compete in the market place without the assistance of the 8(a) BD Program. This is initiated by SBA. Termination Refers to a participants exit from the 8(a) Business Development Program for good cause before expiration of the 9-year program term. Conditions to Leave the 8(a) BD Program

8. 7 Eligibility Criteria

9. 8 individuals are persons who have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups, without regard to individual qualities. Eligibility Criteria Socially disadvantaged

10. 9 Individuals are presumed to be socially disadvantaged if they are a U.S. Citizen and a member of one of the following groups: Black American Asian Pacific American Hispanic American (includes individuals of Spanish & Portuguese descent) Native American Subcontinent Asian American Eligibility Criteria

11. 10 Persons not members of a designated group. o Must establish a preponderance of evidence. Eligibility Criteria

12. 11 What is Preponderance? Generally, preponderance is evidence of a quality and quantity which leads the decision maker to objectively conclude that the existence or truth of the facts asserted is more probable than not. Eligibility Criteria

13. 12 Eligibility Criteria Individuals that are socially disadvantaged persons whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit. Economically Disadvantaged

14. 13 NET WORTH LessEquity in primary residence LessEquity in business EqualsAdjusted net worth (which must not exceed $250,000) After excluding the individuals equity in the firm and equity in the primary residence, net worth may not exceed $250,000.00 Eligibility Criteria Net worth criterion:

15. 14 Good Character

16. 15 What shows lack of good character? Adverse information regarding possible criminal conduct by the applicant or its principals. Violations of any SBA regulations. Debarred or suspended individuals or firms. Applicant firms and principals that lack business integrity as shown by an indictment, guilty plea or civil judgment. Any principal who is incarcerated or on parole or probation. Evidence that the firm knowingly submitted false information during the application process. Any firm or any of its principals that fail to pay financial obligations to the Federal Government. Good Character Eligibility Criteria

17. 16 Potential for Success

18. 17 Factors considered: Must be in business in its primary NAICS code for at least two full years immediately prior too the date of its 8(a) application. Proof of two years operation in the firms primary industry as verified by revenues reported in business tax returns. Financial capability: sufficient capitalization, financial performance, bonding capacity, manageable debts. Managerial and Technical capability: performance on previous contracts, firm has the necessary personnel, licenses, certifications, facilities, prior experience. Potential for Success Eligibility Criteria

19. 18 Potential For Success Contd… Management capability: Education, experience and training of CEO and other managers, magnitude and complexity of past/current jobs, management systems. Qualifications for ability to perform on Federal contracts: relevant contracting experience, ability to meet Federal procurement policies. Eligibility Criteria

20. 19 Waiver of the Two Year Rule

21. 20 SBA may waive the two-year rule if: The individual or individuals upon whom eligibility is to be based have substantial and demonstrated business management experience; The applicant has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD Program; The applicant has adequate capital to carry out its business plan as a Participant; Waiver of the Two Year Rule Eligibility Criteria

22. 21 Waiver of the Two Year Rule Contd… The applicant has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category; The applicant has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform such contracts as a Participant. Eligibility Criteria

23. 22 Ownership

24. 23 Ownership At least 51% unconditional ownership by the disadvantaged person(s). Partnerships: Agreements must reflect unconditional ownership. Limited Liability Company: Disadvantaged individuals must own at least 51% of each class of member interest. Eligibility Criteria

25. 24 Ownership Corporations Disadvantaged persons must own at least 51% of each class of voting stock and at least 51% of all outstanding stock. Stock option plans for nondisadvantaged individuals will be viewed as if they have been exercised. Eligibility Criteria

26. 25 Control and Management

27. 26 Control and Management Partnerships: Agreements must reflect unconditional management by disadvantaged partner(s). Limited Liability Company: One or more disadvantaged individuals must serve as management members with unconditional control. Eligibility Criteria

28. 27 Control and Management Corporations A. How control is established: Disadvantaged directors of the board must control the board by actual number of votes and must be able to establish a quorum without the presence of non-disadvantaged directors. OR Eligibility Criteria

29. 28 Corporations B.Control without considering the Board of Directors (1): 1.A single disadvantaged individual owns 100% of the voting stock. 2.A single disadvantaged individual owns at least 51% of the voting stock, is on the Board of Directors and no super majority* voting requirements exist. If a super majority* requirement exists, the disadvantaged individual must own at least the percentage of voting stock necessary to overcome any super majority* requirements. *A super majority is a percentage of votes required by shareholders to make decisions on behalf of the concern. For example, if a 2/3 vote is required to approve a bylaw change, disadvantaged individuals must have at least 2/3 of the votes necessary to control the concern. Control and Management Eligibility Criteria

30. 29 Control and Management Corporations B.Control without considering the Board of Directors (2): 3.If more than one disadvantaged individual, each disadvantaged individual is on the Board of Directors and together own at least 51% of the voting stock and no super majority* voting requirements exist, and there are enforceable agreements of the shareholders permitting one of them to vote all stock as a block without a shareholders meeting. If a super majority* requirement exists, the disadvantaged individuals must own at least the percentage of voting stock necessary to overcome any super majority* requirements. *A super majority is a percentage of votes required by shareholders to make decisions on behalf of the concern. For example, if a 2/3 vote is required to approve a bylaw change, disadvantaged individuals must have at least 2/3 of the votes necessary to control the concern. Eligibility Criteria

31. 30 What Constitutes Control?

32. 31 What Constitutes Control? The Disadvantaged Individual must: Hold the position of President or Chief Executive Officer, Managing Partner or LLC Managing Member Be the highest compensated individual Have the ability to Hire and Fire Set Policies Have the ability to commit firm to contracts Have the ability to the control Budget and Financial Disbursement Eligibility Criteria

33. 32 Do you control your Operations?

34. 33 Does a disadvantaged individual or individuals devote full-time to the business? Do you have sufficient managerial experience to run the concern? Do you have ultimate managerial control over individuals with technical expertise and/or critical licenses? Tests: Do You Control Your Operations Eligibility Criteria

35. 34 Do Non-disadvantaged Individuals have the Ability to Control your firm?

36. 35 Do Nondisadvantaged Individuals Have The Ability To Control Your Firm? TESTS: Do contractual arrangements exists that allow a nondisadvantaged individual to control the firm? Is the nondisadvantaged individual a previous employer or supervisor? Does a nondisadvantaged individual: hold the critical license and have an equity interest in the applicant concern? provide the necessary licenses or bonding? have unlimited access to the business bank accounts? provide critical financing? control through business loan arrangements? receive excessive compensation? Eligibility Criteria

37. 36 Size

38. 37 Size Firms must be small based on their primary NAICS Code, including affiliates. Size is determined either by: Average 3 years revenues (construction and services) Number of employees (manufacturers, dealers, wholesalers) See 13 CFR 121 Size Regulations or visit our website: www.sba.gov. Eligibility Criteria

39. 38 Application Processing

40. 39 REQUIRED FORMS: For each firm: SBA 1010 - Application for 8(a) BD SBA 1623 - Certification Regarding Debarment and Suspension IRS Form 4506 - Request for Copy or Transcript of Tax Form For each officer, director, shareholder with more than 10% holding, proprietor, partner and each person claiming disadvantage: SBA 413 - Personal Financial Statement * SBA 912 - Personal History ** IRS Form 4506 - Request for Copy or Transcript of Tax Form Additional required documentation is listed in the SBA Form 1010 *when married, separate statements from each spouse to show each individuals joint or community property shares and separate property. **Fingerprints on Form FD-258 if individual reports arrest record. Application Processing

41. 40 Ineligible Businesses and Individual Disqualification Ineligible businesses: brokers*; debarred or suspended persons or concerns; nonprofit organizations. Franchises may be allowed contingent upon SBA review of the franchise agreement. A business may participate only once. Even if ownership and control has completely changed, firm may not re-apply. Any person who has used his/her disadvantaged status to qualify another firm shall be regarded as non disadvantaged. * A broker is a concern that adds no material value to an item being supplied to procuring activity or which does not take ownership or possession of or handle the item being procured with its own equipment or facilities. Application Processing

42. 41 Place of Filing

43. 42 Applications for the 8(a)BD program are filed with the Division of Program Certification & Eligibility (DPCE) Unit that services the Federal Region where the 8(a) Participant is located. Place of Filing Application Process

44. 43 Place of Filing Contd… DPCE reviews application for completeness and advises firm of deficiencies within 15 days. If incomplete, applicant submits corrections within 15 days and a determination of completeness is made by DPCE within 10 days of receipt of firms response. Applicant advised of outcome by the Associate Administrator within 90 days from the date completed application was accepted. If declined, applicant advised of right to request reconsideration within 45 days of date of decline. Should the concern not seek reconsideration, there is a mandatory 12 month waiting period before firm may reapply. If declined after reconsideration, there is a mandatory 12 month waiting period before firm may reapply. Firms declined solely for size, may reapply immediately. Application Process

45. 44 Philadelphia DPCE 900 Market Street, 5 th Floor Philadelphia, PA 19107 (215) 580-2732 San Francisco DPCE 455 Market Street, 6th Floor San Francisco, CA 94105 (415) 744-0328 Alaska District – Processes Applications for ANCs 510 L Street, Suite 310 Anchorage, AK 99501 (907) 271-4850 Place of Filing Continued… Application Process

46. 45 Assistance Available to 8(a) BD Program Participants

47. 46 Assistance Available to BD Participants BDS Responsibilities Training 7(j) 8(a) BD Contracting Finance Resource Partners SCORE SBDCs Womens Business Centers

48. 47 What are the Responsibilities of the BDS?

49. 48 What are the BDSs Responsibilities in Servicing the Participant? The BDSs on-going responsibility is to assist the participant in developing its business to the fullest extent possible so that it attains competitive viability during its program participation term, and maintains viability thereafter. To do this, the BDS; must: Identify the firms strengths and weaknesses; Provide basic advice, counsel and guidance in the areas of marketing to the federal government and contract administration; Refer the firm to appropriate internal and external resources for assistance in technical, management and financial matter; Monitor the firm's progress in the program and its compliance with program requirements. Assistance Available to BD Participants

50. 49 How Does the BDS Provide Maximum Opportunities for 8(a) Firms? The BDS strives to increase the 8(a) share of prime contracts and 8(a) participation in subcontracting opportunities by: Assisting, and training participants to review, FedBizOpps; Notifying qualified 8(a) firms of procurement opportunities and counseling such firms on marketing and promotion strategies; and Communicating with procuring activities on a regular basis in order to maximize their use of the 8(a) Program. The BDSs should attempt to increase both the dollar value and percentage of total contract awards to 8(a) firms. Assistance Available to BD Participants

51. 50 How should BDSs assist Firms to Prepare for Life After 8(a)? Ensure compliance with final Annual Review Requirement Ensure that the firm understands how to market and what additional sources may be required for competition in the federal contracting arena. Assistance Available to BD Participants

52. 51 Training The Office of Business of Development offers two different types of 7(j) training to 8(a) BD certified firms throughout the nation: o 7(j) Basic Training sessions are targeted at 8(a) firms in the Developmental Stage. o 7(j) Advanced Training sessions are targeted at 8(a) firms in the Transitional Stage of the 8(a) program. Assistance Available to BD Participants

53. 52 8(a)BD Contracting

54. 53 Sole Source Competition Types of 8(a) Contract Awards 8(a) BD Contracting

55. 54 8(a) Sole Source Contract price, including options, is $6.5 million or less for manufacturing NAICS codes Contract price, including options, $4 or less million for all other contracts 8(a) BD Contracting

56. 55 8(a) Competition At least two eligible 8(a) BD Participants Offers must be fair and reasonable Contract price, including options, exceeds $6.5 million for manufacturing NAICS codes Contract price, including options, exceeds $4 million for all other contracts 8(a) BD Contracting

57. 56 Procuring Agencys Offering SBA Evaluates Offer Acceptance/Reject Determination of Eligibility Contract Award Offer and Acceptance 8(a) BD Contracting

58. 57 8(a) BD Contracting Competition Below the Threshold Sole Source Above the Threshold Sole Source Prohibition Mandatory Termination for Convenience Waivers

59. 58 Authority to Approve Waivers Associate Administrator for the Office of Business Development SBA Administrator 8(a) BD Contracting

60. 59 Additional Contractual Assistance

61. 60 Joint Venture An agreement between an eligible 8(a) participant and one or more other business concerns to establish a new legal entity solely for the purpose of performing a specific 8(a) contract. The contract is then awarded to the Joint Venture entity rather than to one or more of the participants.

62. 61 Mentor/Protégé Assistance The purpose of the Mentor/Protégé program is to enhance the capabilities of 8(a) BD participants and to improve their ability to successfully compete for federal government contracts. Mentors may provide the following forms of assistance to Protégés: Technical and management assistance Financial assistance, including equity investments and/or loans Subcontracting support Assistance in performing prime contracts through joint venture arrangements.

63. 62 Finance SBA provides a number of financial assistance programs for small businesses. They have been specifically designed to meet a businesss key financing needs including the need for debt financing (loans), equity financing (investment/seed money), and surety bonds. (SBA does not provide grant funds to finance small businesses). Assistance Available to BD Participants

64. 63 Counseling SCORE Counselors to Americas Small Businesses o SCORE is an 10,500 member volunteer association sponsored by the U.S. Small Business Administration. o The association has matched volunteer business- management counselors with clients in need of expert advice. o SCORE has experts in every area of business management and maintains a national skills roster to help identify the best counselor for a particular client. o Volunteer counselors, whose collective experience spans the full range of American enterprise, share their management and technical expertise with both present and prospective small business owners. o SCORE counselors are available to provide assistance Monday through Friday. Assistance Available to BD Participants

65. 64 Counseling Continued… Small Business Development Centers o Provide managerial and technical assistance to start-up and existing businesses. These strategically located campus-based centers bring together the resources of the university, the private sector and government. o These resources are utilized to counsel and train small businesses in resolving organizational, financial, marketing, technical and other problems they may encounter. o The SBDC's specialize in providing direct one-on-one counseling on small business problems. Assistance Available to BD Participants

66. 65 Counseling Continued… Womens Business Ownership oThe Office of Womens Business Ownership (OWBO) promote the growth of women owned businesses through programs that address business training and technical assistance, access to capital, federal contracts and international trade opportunities. oOWBO web addresses are: www.onlinewbc.govwww.womenbiz.gov www.onlinewbc.govwww.womenbiz.gov www.onlinewbc.gov and www.womenbiz.govwww.onlinewbc.govwww.womenbiz.gov Assistance Available to BD Participants

67. 66 What is expected of 8(a)BD Program Participants?

68. 67 CCR Self marketing to federal procurement agencies. Submission and annual update of business plan. Access to company records by SBA. Informing SBA of any changes affecting 8(a)BD eligibility, i.e. changes in business structure, ownership, etc. What is Expected of 8(a) BD Program Participants?

69. 68 The CCR is a government wide registration procedure to obtain contractor information for contractors that conduct business with the federal government. http://www.ccr.gov http://www.ccr.gov Used to conduct market research and confirm eligibility for SBAs procurement preference programs users go to http://www.ccr.gov and click on Dynamic Small Business Search. http://www.ccr.gov Submission of year end financial statements and annual tax returns. Participation in business development training opportunities and networking offered by SBA. Staying current in financial obligations to the Federal Government. What is Expected of 8(a) BD Program Participants?

70. 69 Submission of year end financial statements and annual tax returns. Participation in business development training opportunities and networking offered by SBA. Staying current in financial obligations to the Federal Government. What is Expected of 8(a) BD Program Participants?

71. 70 Questions?