Washington, D.C.— Today, the House Small Business Committee Subcommittee on Contracting and Infrastructure, led by Chairman Kweisi Mfume (D-MD), held a hearing examining the current state of the Small Business Administration’s (SBA) 8(a) program. Congress created the 8(a) program to level the playing field in the procurement space and allow disadvantaged businesses to compete for federal contracts.
“Despite all the obstacles, socially and economically disadvantaged businesses employ millions of Americans and contribute over $1 trillion in revenue to the nation’s economy. The 8(a) program is a crucial tool to ensuring that these firms have ample access to the federal marketplace,” said Chairman Mfume. “I hope that today’s hearing allows us to explore actions our committee can take to improve and modernize the 8(a) program.”
Since 1978, 8(a) has offered small businesses owned by socially and economically disadvantaged individuals training, technical assistance, and contracting opportunities. In FY2020, 10.4% of federal prime contracting dollars were awarded to small disadvantaged businesses, out of which 3.5% was awarded through the 8(a) program. The federal government has also established a statutory goal of awarding 5% of all eligible contracting and subcontracting dollars to small and disadvantaged business concerns.
While 8(a) helps thousands of small businesses every year, program participants report ongoing challenges. These concerns include issues around the adequacy of the duration of the program, 8(a)’s technical assistance and training offerings, and the impact of consolidation in the contracting space on 8(a) firms. Members examined these issues and heard from small business owners about what Congress can do to improve the program during the hearing.
“While [7(j)] is a widely used program to support 8(a) program participants, it is my view that there are opportunities to improve its effectiveness and the associated outcomes. SBA should consider allocating some 7(j) resources to the development and delivery of specific programs/ curriculums for new and transitioning program participants,” said Darryl K. Hairston a Retired Small Business Advisor from Woodbridge, VA. “For new program participants such courses might focus on the Federal acquisition process; understanding Federal contract solicitations; preparing successful proposals, building networks/relationships in the public and private sector, how to successfully market to the Federal government; effective business planning, etc.”
“President Biden’s goal of increasing the share of federal contracts awarded to small, disadvantaged businesses from 5 to 15 percent by 2025 is significant, it is bold, and it is achievable,” said Jackie Robinson-Burnette, Chief Executive Officer at Senior Executive Strategic Solutions in Woodbridge, VA. “Since the federal regulations prohibit set-asides for Small Disadvantaged Businesses, strengthening and building the 8(a) Program and 7(j) Program are important next steps to ensure the success of small firms.”
“One of the challenges I have heard from my fellow program participants is entering the program and failing to win any contract awards for the first few years. I can relate to this struggle – I was ready to give up on the program when in my 3rd year I still had not won any contracts,” said Arshdeep Khurana, President & Chief Executive Officer of Avosys Technology Inc. in San Antonio, TX. “After being in the commercial sector for 14 years, while the federal space was new for me, I certainly had a strong list of capabilities. Every year in the 8(a) program is coveted by participants, so to ‘waste’ the first few years without any success can feel frustrating.”
“While the 8(a) program has allowed me to find a successful path forward, I know many companies have not had the same experience,” said Qin Li, President of Soliel, LLC in Vienna, VA. “For example, one of the downfalls for any company is relying on 8(a) awards as the majority of their business. So, when it is time to graduate, companies do not have exit strategies to transition out of the program.”