Velázquez Pushes for Improvements to SBA’s 8(a) Program
Washington, September 18, 2019
Washington, D.C.— Today, House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) gathered members of the small business community to discuss their experiences with the Small Business Administration’s 8(a) program. The 8(a) program was created by Congress to help disadvantaged businesses compete in the federal procurement space and to level the playing field when it comes to government contracting.
“Throughout our nation’s history, minorities have faced discrimination, making it harder for them to gain traction in many parts of the economy. Consequently, the path to starting and running a business for minority entrepreneurs has been difficult,” said Chairwoman Velázquez. “The 8(a) program was designed to address these challenges by improving minority-owned firms’ ability to compete for federal contracts.”
The 8(a) program was created in 1978 to give the SBA statutory authority to serve minority-owned businesses explicitly. The program provides small businesses owned by one or more socially economically disadvantaged individuals with a range of benefits. These benefits include the chance to compete for set-aside and sole-source contracts, management and technical assistance, and access to the SBA’s mentor-protégé program. In fiscal year 2017, Federal agencies awarded $16.3 billion, or 3.7 percent of total small business eligible Federal contracting dollars using 8(a) sole-source and set-aside contracts.
However, in recent years, there has been a marked decrease in the number of small businesses participating in the program. In 2010 there were 7,000 8(a) participants, yet by 2016, there were only 4,900 8(a) certified firms. To boost the number of small business participants, the SBA streamlined its application process in 2016. This streamlining has yet to lead to a significant increase in 8(a) certifications, but critics say that it has created oversight issues within the program. The Office of the Inspector General found that the new processes created gaps in SBA oversight when it comes to determining the eligibility of small businesses for 8(a).
The hearing gave members the chance to better understand the issues surrounding the 8(a) program and to hear from small business owners about how Congress can improve the program.
“The 8(a) Program has decreased in recent years,” said Ralph C. Thomas III, Executive Director Emeritus of the National Association of Minority Contractors. “It has gone down from more than 7000 participants in the Program to less than 5000 today. In today’s super competitive government contractor environment that dilemma makes no sense.”
“I still trust and believe the core of the program is to give small businesses the access we need,” said Dottie Li, Founder and CEO TransPacific Communications in Cheverly, MD. “On the operation side there are areas for improvement, to be more fine-tuned, redesigned and reworked to make it run better and more efficient.”
“Even though the 8a program is not a solution to American’s inequality, it is a tool to assist minorities start and grow businesses,” said Clarence McAllister, CEO of Fortis Networks in Phoenix, AZ. “Minority businessowners are more likely to hire other minorities and help their communities. Minority businessowners set the example of what is possible when the media only highlights sports and entertainment as the path out of poverty for most minority youths.”
“The 8(a) program is a core initiative of the Small Business Administration,” said Chairwoman Velázquez. “Now, just as it was 40 years ago when it was established, it remains equally important and that’s why I’m committed to making sure it works as intended.”