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SBA 8(a) Business Development Program
Tennessee District Office
www.sba.gov/tn
(615) 736-5881
Tennessee District Office
for 8(a) Business Development Staff!
(615) 736-5881
 Vacant, District Director
 615-736-5039 ext 253
 Saundra A. Jackson, Senior Area Manager
 901-526-9300
 Vergia Bigger, Business Development Specialist
 615-736-5629 ext 243
 Kena Dixon, Business Development Specialist
 615-736-7426 ext 254
What is the 8(a) Business Development Program?
 Helps small disadvantaged businesses compete in the American
Economy
 Access to Federal contracting marketplace
 Sole source contracting with Federal Government
 See SBA 8(a) regulations (13 CFR 124):
http://www.sba.gov/library/cfrs/13cfr124.html
How Long Can A Company Participate in the 8(a) program?
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Program Participation is divided into two stages
1.
Developmental Stage -- first 4 years
•
2.
Designed to help 8(a) firms overcome their economic disadvantage by
providing business development assistance
Transitional Stage -- second 5 years
•
Designed to help firms overcome the remaining elements of economic
disadvantaged and to prepare participants for leaving the 8(a) Program

Participation term is for period of 9 years

Annual eligibility and participation in the program is dependent on the firm’s
continuing eligibility as a socially and economically disadvantaged
owned/operated firm and continued compliance with the 8(a)BD participation
agreement.
Eligibility Criteria
 Must be a small business
 Small Business Definition: depends on the industry, either
• Average number of employees for the preceding 12 months
• Sales volume averaged over a three year period
 Must be unconditionally owned and controlled by one or more socially and
economically disadvantaged individuals
 Must be a United Stated citizen
 Must be of good character
 Must demonstrate potential for success
 At least 51% of the firm must be owned by socially or economically
disadvantaged individuals.
Who are Socially Disadvantaged Individuals?
 Those subject to racial or ethnic prejudice or cultural bias
 Social disadvantage must stem from circumstances beyond control
 Designated groups that are presumed to be socially disadvantaged
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Black Americans
Hispanic Americans
Native Americans
Asia Pacific American
Subcontinent Asian American
Others
Persons not members of designated groups must:
 Establish their case by a preponderance of the evidence;
 The disadvantage may stem from race, ethnic origin, gender, physical
handicap, long term environmental isolation, or other similar causes;
 The applicant must have personally suffered disadvantage in the
United States;
 The disadvantage must be substantial & chronic;
 The discrimination must have negatively impacted on business
advancement.
Can Individuals Not a Member a Designated Group Claim
Social Disadvantage?
 ANSWER: Yes!
 Individual must establish social disadvantage on the basis of
“preponderance of evidence”
 Acceptable evidence
 Court or administrative findings of discrimination
 Documentary evidence, such as rejection letters on job applications,
documents relating to rejected contract offers.
What does it mean to be “economically disadvantaged”?
 Socially disadvantaged individuals whose ability to compete in the
free enterprise system has been impaired
 Diminished capital and credit opportunities
 Individual’s net worth may not exceed $250,000 excluding:
 Equity in the firm
 Equity in primary residence
$$ EXISTING NET WORTH
less
$$ equity in primary residence
less
$$ equity in business
Equals Adjusted Net Worth (which must not exceed $250,000)
What does “Ownership” mean to SBA?
 At least 51% ownership by the disadvantaged person(s).
 Partnerships: Agreements must reflect ownership by disadvantaged partner(s).
 Limited Liability Company: One or more disadvantaged individual must serve as
management members with unconditional control.
 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 non-disadvantaged individuals will be viewed as if they have
been exercised.
Who must control the operations of the business to be in the
8(a) program?
 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?
What factors are considered when evaluating potential for
success?
 The technical and managerial experience of the firm’s managers
 The firm’ operating history
 Ability of the firm to access credit and capital
 The firm’s financial capacity
 The firm’s record of performance
 Whether the firm or individuals employed by the firm hold the requisite
licenses, if the firm is engaged in an industry requiring professional
licensing.
How long must the business have been in operation?
 The firm must have been operational for at least two full years as evidenced
by income tax returns
 SBA may waive the two-year rule as part of the application 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;
 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.
Are you a small business?
 Firms must be small based on their primary North American Industrial
Classification Code (NAICS code) including affiliates. (See SBA’s size
web site at: www.sba.gov/size)
 Size is determined either by:
• average 3 years revenues - dollars
• # of employees (manufacturers, dealers, wholesalers)
 See 13 CFR 121 Size Regulations or visit our website: www.sba.gov.
Registration in Central Contractor Registration!
 NOTE: Both 8(a) firms and SDB firms, or
any firm doing business with the Federal
government must first register in CCR
(Central Contractor Registration) at
www.ccr.gov.
HUB-Zone Program
 Provide federal contracting assistance for qualified small business
concerns located in historically underutilized business zones to:
 Increase employment opportunities;
 Stimulate capital investment in the designated areas
 Empower communities through economic leveraging
Qualified Areas
 Qualified Census Tracts.
 Qualified Non-metropolitan Counties:
 Median household income is less than 80% of the non-metropolitan state
median household income.
 Unemployment rate that is not less than 14% of the state-wide average
unemployment rate.
 Indian reservations (external boundary).
Requirements for HUB-Zone Program
 Must be a small business.
 Concern must be at least 51% owned and controlled by US citizens.
 The principal office of the concern must be located in a designated HUB-
Zone area.
 At least 35% of the concern’s employees must reside in a HUB-Zone.
 Must meet all these requirements.
The Certification Process
 On-line certification.
 Fully electronic application process.
 Access to company records by SBA.
 SBA may request additional information or clarification any time after
submission.
 SBA’s will periodically review HUB-Zone firms for continued eligibility.
8(a) Business Development Program, Small Disadvantage
Business Certification, or HUB-Zone Certification
 QUESTIONS OR COMMENTS?