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FY 16-17: Agency Priority Goal
Grow the number of 8(a)-certified disadvantaged small businesses
Priority Goal
Goal Overview
The 8(a) Program is an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting.
8(a) firms are also provided with business development assistance and can participate in the Mentor Protégé Program to build their competitive and institutional know-how to participate in competitive acquisitions.
A few years ago, the 8(a) Program boasted over 9,000 certified 8(a) participants, but has declined to less than 4,700 due to the administratively burdensome application process. Though the regulatory guidance provides the SBA approximately 90 days to process a complete application, several firms have endured delays that extend anywhere from 6 months to several years. Further, the SBA rate of approval for applicants that complete the application process is exceptionally low, under 50%. While over 2,000 applicants apply each year, the SBA rejects most applications as incomplete or missing documentation. Historically, only 25% of the applicants or about 500-600 applicants per year get through the burdensome process for a final decision from the Associate Administrator of the Office of 8(a) Business Development. The SBA’s low rate of approval has led to an industry of third party firms that charge socially and economically disadvantaged applicants anywhere from $5,000 to $75,000 to prepare the application and respond to the SBA processors. Some of these firms are taking advantage of applicants; and regardless of the amount paid, there is no guarantee of approval because the SBA approval rate is consistently less than 50%.
This Priority Goal is designed to grow the 8(a) Program by improving customer service for the 8(a) applicants and reduce the unnecessary administrative burdens on applicant firms. Growth of the program will open opportunities for socially and economically disadvantaged entrepreneurs to gain a foothold in government contracting.
The mission of the Office of Business Development is to execute activities authorized under Sections 8(a) and 7(j) of the Small Business Act to provide business development assistance to firms that are owned and controlled by economically and socially disadvantaged individuals. The office fulfills its mission by certifying the eligibility of prospective 8(a) business development firm participants and managing a national program that provides marketing, managerial, technical, and procurement assistance to help eligible businesses achieve their full competitive potential. The SBA will continue to work collaboratively with community development partners, credit unions, minority associations and others to tailor programs to meet their needs and ensure that SBA’s programs remain accessible to underserved communities.
This Priority Goal directly supports SBA’s strategic objectives:
- Strategic Objective 1.2 – Ensure federal contracting goals are met or exceeded by collaborating across the federal government to expand opportunities for small businesses and strengthen the integrity of the federal contracting certification process and data.
- Strategic Objective 2.1 – Ensure inclusive entrepreneurship by expanding access and opportunity to small businesses and entrepreneurs in communities where market gaps remain
- Strategic Objective 3.3 – Mitigate risk to taxpayers and improve oversight across SBA programs
The goals address the ongoing decline in number of 8(a) small businesses. Through 8(a) sole source and competitive contracting opportunities, the federal government acts as a catalyst for small business growth, innovation, job creation, and supports the national economic security of the nation.
When a small business gets a government contract, the small business is often able to quickly create jobs and spur economic growth. The government agency often has a “direct line” to the CEO, helping ensure that products and services are meeting or exceeding expectations and serving America’s taxpayers.
Key barriers and challenges:
Many challenges exist for growing the 8(a) program and increasing the total number of application approvals for 8(a) firms. However, the SBA is committed to make smart, bold, and customer focused changes to make the 8(a) program accessible to all firms that meet the eligibility requirements of the program. Consistent measurement of progress and monitoring of implementation of new and streamlined procedures will be key to avoid reverting to historical trends of rejecting 50% of more of the completed applications. Challenges include:
- Uncertainty whether competitors will respond favorably to the necessary regulatory changes that will be posted in the Federal Register to remove longstanding but unnecessary burdens on firms. Some examples are ‘wet signatures’ and a mandatory waiting period of 12 months to reapply after being declined by the SBA regardless of the reason for the decline.
- Potential for low employee engagement or desire for the status quo within the Office of Business Development. The staff assigned to process applications work remotely from the SBA Headquarters in Washington DC and have been trained in current processes that have proven burdensome.
- Office of Field Operation’s Business Opportunity Specialists (BOS) who conduct the day-to-day marketing to 8(a) applicants and provide business development for 8(a) certified firms. The BOS are assigned other priorities leaving minimal time for 8(a) business development. The decline in access to business development creates an increase in the number of firms that are terminated each year because they do not stay connected to the SBA and do not meet program requirements for annual reviews.
The SBA programs that contribute to this Agency Priority Goal are: Size Standards, Mentor-Protégé, 8(a) Business Development, 7(j) Technical Assistance.
Strategies
- Reduction of the Administrative Paperwork Burden. To reduce the administrative burden on firms, SBA will streamline the application process working with Office of General Counsel, Office of Hearing and Appeals, Office of Information and Regulatory Affairs and Office of Management and Budget to significantly reduce the administrative burden on firms, and testing the process throughout FY16.
- Target and Metrics Management. Measuring progress and results on a weekly basis, and reporting achievements and challenges to the Associate Administrator of Business Development bi-weekly.
- Regulatory Relief. Seeking regulatory relief of ‘wet signatures’ and other outdated requirements by proposing regulatory changes.
- Culture Change. Inspire a culture of opportunity for eligible 8(a) firms. Improving customer service to provide the best service offered in the federal government through employee engagement by Leadership sharing the vision and expectations down to the field Business Development.
- Industry. Engaging industry through webinars and small group meetings to further expand outreach and train potential applicants on how to submit a clean application.
- Process Transparency. Increasing transparency in the application process by providing 8(a) application workflow process for applicants to better understand each processing stage for their respective applications.
- Resource Partners. Engaging our resource partners and other industry organizations/associations to maximize outreach efforts to create a consistent pipeline of 8(a) applicants through a minimum of two outreach events per quarter.
- Engagement of Office of Field Operations. In addition, the Office of Business Development will work collaboratively with SBA’s Office of Field Operations (OFO) to host regularly scheduled Field Business Opportunity Specialist (BOS) training through multiple avenues including: Monthly BOS Calls, Webinars, and in-person training. We will also engage OFO to provide consistency in field 8(a) outreach and training for industry at the District Office level to increase the pool of applicants submitting clean applications. In accordance with the Small Business Act, the Office of Business Development will also estimate the expected growth of the program during the next fiscal year and the number of additional Business Opportunity Specialists, if any, that will be needed to meet the anticipated demand for the Program. Acceptable levels of BOS staffing should reduce the number of voluntary withdrawals due to lack of 8(a) applicant business development, training, and program benefit.
- Webinars. To assist in the growth 8(a) participants, SBA will conduct two webinars per quarter directed at potential participants offer tips for success in preparing and submitting applications – stronger applications to the program lead to more 8(a) participants. Webinars directed at current participants will provide information on keeping firms in compliance so that the portfolio remains strong and able to receive more contracts. All of these webinars will be free and offered continually throughout the year.
- Training for Contracting Officers. To increase the contracting opportunities to maintain industry interest in the program and to market streamlined procedures, additional training will be provided to contracting officers. The purpose of these training sessions is to ensure that contracting officers and small business specialists understand the rules of the 8(a) Program and how the program is used. These sessions will build strong relationships between the SBA and contracting agencies – providing contracting officers and specialists a resource for answering questions, while SBA learns of the agencies’ procurement needs and where an increase in 8(a) participation can occur. SBA conducts these sessions with agencies regularly, believing that the dialogue leads to an increase in 8(a) awareness and number of contracts, thereby meeting the Small Disadvantaged Business goal.
Progress Update
The 8(a) program helps socially and economically disadvantaged entrepreneurs gain access to federal government contracting opportunities. In prior years, small businesses had a difficult time negotiating the lengthy 8(a) certification process. Through streamlining the application process, the SBA exceeded the target of 600 applications by 152 percent and has successfully recruited new firms to the program. In FY15, the SBA certified a total of 568 applicants. Thus, for FY16 the 5% goal represented an increase of 25 additional firms over the previous fiscal year. As a result of aggressive marketing and streamlined processes in FY16, the SBA far exceeded the goal approving a total of 911 firms (meaning an increase of 343 additional firms).
The program is using its broad district office network and leveraging partnerships to educate socially and economically disadvantaged firms, gather feedback, and monitor the impact of the streamlined application process. SBA and its Resource Partners are spending more time offering assistance to applicants at the beginning of the application process, prior to their application submission. This results in applicants with an improved understanding of eligibility criteria, knowledge of the required paperwork, and has resulted in a larger number of complete applications.
The 8(a) Business Development Program also achieved the following during Q4:
- Received concurrence of General Counsel to submit streamlined 8(a) application forms to OMB for approval with OMB approval still pending as of 30Sep2016
- Continued to put more of a customer service focused approach towards interacting with firms during the application approval process by not denying firms approval for missing paperwork, but instead assisting firms through the process
- Received concurrence of General Counsel to submit streamlined Annual Review forms to OMB for approval with OMB approval still pending as of 30Sep2016
- Received Administrator’s approval of the revised 8(a) Program Standard Operating Procedures
- Tracked number of 8(a) applications received, approved, and denied
- Conducted BOS Training on 8(a) Program regulatory and streamlined changes
- Conducted training events with Society of Military Engineers; Asian American Chamber of Commerce; Office of Field Operation’s Managers Conference; and SBA Mentor Protégé Conference
Next Steps
FY17 Quarter 1:
- Hold webinar with BOSs to share FY17 metrics and success rate for new procedures, and to encourage assistance with recruiting more applicants for the program
- Hold streamlined application process lessons learned
- Conduct two outreach events with Resource Partners
- Track number of 8(a) annual reviews completed
- Track number of approved applications and number of submitted applications
FY17 Quarter 2:
- Hold streamlined application process lessons learned
- Conduct two outreach events with Resource Partners
- Conduct training with Business Opportunity Specialist (BOS)
- Track number of 8(a) annual reviews completed
FY17 Quarter 3:
- Hold streamlined application process lessons learned
- Conduct two outreach events with Resource Partners
- Conduct training with Business Opportunity Specialist (BOS) training
- Track number of 8(a) reviews completed
- Track number of approved applications and number of submitted applications
FY17 Quarter 4:
- Track number of 8(a) reviews completed
- Conduct two outreach events with Resource Partners
- Conduct training with Business Opportunity Specialist (BOS) training
- Track number of approved applications and number of submitted applications
Contributing Programs & Other Factors
SBA hosts monthly meetings with federal agency Office of Small Business Programs and encourages, monitors, and facilitates the sharing of best practices in government contracting with chief acquisition officers, senior procurement representatives, and agency small business directors throughout the federal government.
The Office of Entrepreneurial Development (OED) and the Office of Field Operations (OFO) promote SBA’s contracting opportunities to small business owners through one-on-one engagement with 8(a) applicants, comprehensive and coordinated marketing and outreach efforts, including online and in-person workshops and trainings. Additionally, SBA will work with its resource partners (including SCORE, Small Business Development Centers SBDCs, and Women’s Business Centers) to develop outreach and training initiatives and other tools to help fully deploy the Agency’s national network behind this goal.
There are several community, grassroots, and faith based partners working with the Office of Business Development to grow the 8(a) Program, like the McPherson Square Business Council which hosts free monthly meetings for potential 8(a) applicants to ask questions about the application process at in their Washington DC conference space. Other partners include but are not limited to:
- Small Business Procurement Advisory Council (SBPAC). SBA chairs the SBPAC whose members include directors of the Offices of Small and Disadvantaged Business Utilization. These directors are the advocates for small business within each agency, and meet regularly with their procurement offices to encourage the use of small businesses in meeting their agency goals.
- Procurement Technical Assistance Centers (PTAC). PTACs provide free counseling by government contracting professionals, and they offer 8(a) applicants/firms with assistance and training to increase chances of success with navigating the federal procurement process.
The Office of Business Development will increase focus on engaging key stakeholders through oversight, outreach events, and training programs. The SBA will actively participate in and/or hosts events with the following key stakeholders:
- Federal agencies: senior officials, procurement teams and small business program team
- Small businesses
- Large Industry partners with Federal subcontracting requirements
- Trade groups, faith based organizations, grassroots community teams
- Congress: Members, staff and constituents
Strategic Objectives
Strategic Objective:
Statement:
Ensure federal contracting goals are me and/or exceeded by collaborating across the federal government to expand opportunities for small businesses and strengthen the integrity of the federal contracting certification process and data.
Description:
Small business contracting is one of the most important federal programs to help America’s small businesses grow and create jobs. The federal government gets to work with the most innovative small businesses in America today, and small businesses get critical revenue to build and scale their operations. SBA’s goal is to make sure that all federal agencies meet or exceed their targets for federal prime contracting dollars awarded to small businesses. The SBA is improving coordination and communication across the federal government, facilitating matchmaking events, increasing online trainings and holding senior officials accountable for meeting their agencies’ small business goals. SBA continues to simplify access to federal contracting opportunities and educate small businesses on the contracting opportunities available to them. The SBA is also streamlining the certification process and data for federal contracting and continues to aggressively root out fraud, waste and abuse in small business contracting to ensure that contracting dollars go to deserving small businesses.
Agency Priority Goals
Statement: Through September 30, 2017, maximize small business participation in federal prime contracting to meet the statutory goal of 23%, ensure targets for subgoals are met, and reduce participation by ineligible firms.
Description: When a small business is awarded a government contract, the small business is often able to quickly create jobs and spur economic growth. The government agency often has a “direct line” to the CEO, helping ensure that products and services are meeting or exceeding expectations and serving America’s taxpayers. Also, underserved communities – including women, minorities, veterans and others – often have extreme difficulty in accessing federal contracting opportunities as market gaps remain. SBA’s unique contracting programs provide a path to business growth for these populations. Congress has mandated that small businesses receive 23% of federal government prime contracting dollars, including 5% of prime and subcontracts to Small Disadvantage Businesses; 5% of prime and subcontracts to Women-Owned Small Businesses; 3% of prime and subcontracts to HUBZone Small Businesses; and 3% of prime and subcontracts to Service-Disabled Veteran-Owned Small Businesses. Meeting and exceeding the federal government’s small business procurement goals continues to be an Administration priority. Federal contracting with small businesses is a win-win. Small businesses get the revenue they need to grow their businesses and create jobs, and the federal government gets the opportunity to work with some of America’s most innovative and nimble small businesses, often times with a direct line to the CEO. This Priority Goal directly supports SBA’s strategic objectives: Small businesses are agile, innovative and affordable partners for the federal government. Through small business contracting, the federal government acts as a catalyst for small business growth, innovation, and supports the national economic security of the nation. Congress designated SBA as the agency responsible for overseeing small business contracting across the federal government. The SBA takes this responsibility seriously as the strongest voice for small business across the Administration. Key barriers and challenges: SBA must continue to implement effective and efficient strategies to monitor the agencies’ progress, support small businesses interested in working with the government, and improve the data quality agencies use to manage their contracting activities.
Statement: By September 30, 2017, support more disadvantaged small businesses by increasing the number of approved 8(a)-certification applications by 5% each fiscal year, FY 2016 and FY 2017.
Description: The 8(a) Program is an essential instrument for helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs to gain a foothold in government contracting. 8(a) firms are also provided with business development assistance and can participate in the Mentor Protégé Program to build their competitive and institutional know-how to participate in competitive acquisitions. A few years ago, the 8(a) Program boasted over 9,000 certified 8(a) participants, but has declined to less than 4,700 due to the administratively burdensome application process. Though the regulatory guidance provides the SBA approximately 90 days to process a complete application, several firms have endured delays that extend anywhere from 6 months to several years. Further, the SBA rate of approval for applicants that complete the application process is exceptionally low, under 50%. While over 2,000 applicants apply each year, the SBA rejects most applications as incomplete or missing documentation. Historically, only 25% of the applicants or about 500-600 applicants per year get through the burdensome process for a final decision from the Associate Administrator of the Office of 8(a) Business Development. The SBA’s low rate of approval has led to an industry of third party firms that charge socially and economically disadvantaged applicants anywhere from $5,000 to $75,000 to prepare the application and respond to the SBA processors. Some of these firms are taking advantage of applicants; and regardless of the amount paid, there is no guarantee of approval because the SBA approval rate is consistently less than 50%. This Priority Goal is designed to grow the 8(a) Program by improving customer service for the 8(a) applicants and reduce the unnecessary administrative burdens on applicant firms. Growth of the program will open opportunities for socially and economically disadvantaged entrepreneurs to gain a foothold in government contracting. The mission of the Office of Business Development is to execute activities authorized under Sections 8(a) and 7(j) of the Small Business Act to provide business development assistance to firms that are owned and controlled by economically and socially disadvantaged individuals. The office fulfills its mission by certifying the eligibility of prospective 8(a) business development firm participants and managing a national program that provides marketing, managerial, technical, and procurement assistance to help eligible businesses achieve their full competitive potential. The SBA will continue to work collaboratively with community development partners, credit unions, minority associations and others to tailor programs to meet their needs and ensure that SBA’s programs remain accessible to underserved communities. This Priority Goal directly supports SBA’s strategic objectives: The goals address the ongoing decline in number of 8(a) small businesses. Through 8(a) sole source and competitive contracting opportunities, the federal government acts as a catalyst for small business growth, innovation, job creation, and supports the national economic security of the nation. When a small business gets a government contract, the small business is often able to quickly create jobs and spur economic growth. The government agency often has a “direct line” to the CEO, helping ensure that products and services are meeting or exceeding expectations and serving America’s taxpayers. Key barriers and challenges: Many challenges exist for growing the 8(a) program and increasing the total number of application approvals for 8(a) firms. However, the SBA is committed to make smart, bold, and customer focused changes to make the 8(a) program accessible to all firms that meet the eligibility requirements of the program. Consistent measurement of progress and monitoring of implementation of new and streamlined procedures will be key to avoid reverting to historical trends of rejecting 50% of more of the completed applications. Challenges include: The SBA programs that contribute to this Agency Priority Goal are: Size Standards, Mentor-Protégé, 8(a) Business Development, 7(j) Technical Assistance.
Statement: Maximize small business participation in federal government contracting to meet the statutory goals and reduce participation by ineligible firms.
Description: Congress has mandated that small businesses receive 23% of federal government prime contracting dollars, including 5% of prime and subcontracts to Small Disadvantage Businesses; 5% of prime and subcontracts to Women-Owned Small Businesses; 3% of prime and subcontracts to HUBZone Small Businesses; and 3% of prime and subcontracts to Service-Disabled Veteran-Owned Small Businesses Meeting and exceeding the federal government’s small business procurement goals continues to be an Administration priority. Federal contracting with small businesses is a win-win. Small businesses get the revenue they need to grow their businesses and create jobs, and the federal government gets the opportunity to work with some of America’s most innovative and nimble small businesses, often times with a direct line to the CEO. In FY 2012, the federal government made real progress toward the 23 percent goal, with 22.25 percent or $89.9 billion in federal contracting dollars going to small businesses compared to 21.65 percent in FY 2011, with significant impact in key areas: As a result of a government wide focus on increasing small business contracting opportunities, during President Obama’s first term (FY2009 - FY2012) the federal government awarded $376.2 billion in federal contracting dollars to small businesses. This is a $48.1 billion increase over the four preceding years even as we have seen reduced spending overall. Also, since President Obama took office, the SBA has supported more than $132.61 billion in Federal government contracting dollars to small disadvantaged businesses. This represents a 36.6 percent increase when compared to the prior Administration. Under the Bush Administration’s first term, $97.10 billion in federal government contracting dollars were awarded to small disadvantaged businesses. Although we have seen marked success over the last few years, we know more must be done. Many challenges exist for small businesses seeking to enter the federal procurement marketplace. SBA’s GCBD unit must implement effective and efficient strategies to monitor the agencies’ progress to goal, support small businesses interested in working with the government and encourage agencies to improve data quality when reporting their contracting activities. SBA will increase its efforts to collaborate with and hold federal agencies accountable to achieving their goals.
