SBA’s “8(a) Program”:
Overview, History, and Current Issues
Updated August 3, 2021
Congressional Research Service
https://crsreports.congress.gov
R44844

SBA’s “8(a) Program”: Overview, History, and Current Issues

Summary
The 8(a) Business Development Program—commonly known as the “8(a) Program”—provides
participating small businesses with training, technical assistance, and contracting opportunities in
the form of set-aside and sole-source awards. A set-aside award is a contract in which only certain
contractors may compete, whereas a sole-source award is a contract awarded, or proposed for
award, without competition. In FY2020, 8(a) firms were awarded $34.0 billion in federal
contracts, including $9.3 billion in 8(a) set-aside awards and $11.1 billion in 8(a) sole-source
awards. Other programs provide similar assistance to other types of small businesses (e.g.,
women-owned, HUBZone, and service-disabled veteran-owned).
8(a) Program eligibility is generally limited to small businesses “unconditionally owned and
controlled by one or more socially and economically disadvantaged individuals who are of good
character and citizens of and residing in the United States” that demonstrate “potential for
success.”
Members of certain racial and ethnic groups are presumed to be socially disadvantaged, although
individuals who do not belong to these groups may prove they are also socially disadvantaged.
To be economically disadvantaged, an individual must have a net worth of less than $750,000
(excluding ownership interest in the applicant’s business, equity in their primary personal
residence, and funds invested in an official retirement account), no more than $350,000 in
average adjusted gross income over the preceding three years, and no more than $6 million in
assets (excluding funds invested in an official retirement account).
In determining whether an applicant has good character, the SBA takes into account any criminal
conduct, violations of SBA regulations, or debarment or suspension from federal contracting. For
a firm to demonstrate potential for success, it generally must have been in business in its primary
industry classification for two years immediately prior to applying to the program. However,
small businesses owned by Alaska Native Corporations, Community Development Corporations,
Indian tribes, and Native Hawaiian Organizations are eligible to participate in the 8(a) Program
under somewhat different terms. Each of these terms is further defined by the Small Business Act,
Small Business Administration (SBA) regulations, and judicial and administrative decisions.
This report examines the 8(a) Program’s historical development, key requirements, administrative
structures and operations, and the SBA’s oversight of 8(a) firms. It also discusses two SBA
programs designed to support 8(a) firms, the 7(j) Management and Technical Assistance Program
and the All Small Mentor-Protégé Program, and provides various program statistics. It concludes
with an analysis of the following current 8(a) Program issues:
 The SBA’s decision to address recent declines in the number of program
participants by revising and streamlining the program’s application process, an
action which the SBA’s Office of Inspector General (SBA OIG) reports “may
erode core safeguards that prevented questionable firms from entering the 8(a)
Program.”
 Reported variation in 8(a) Program service delivery.
 Reported deficiencies in the oversight of 8(a) Program participant’s continuing
eligibility.
 Disagreements concerning the financial thresholds used to determine economic
disadvantage.
 The adequacy of the program’s performance measures.
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SBA’s “8(a) Program”: Overview, History, and Current Issues

Introduction
The 8(a) Business Development Program—commonly known as the “8(a) Program”—provides
participating small businesses with training and technical assistance designed to enhance their
ability to compete effectively in the private marketplace.1 One of the program’s major benefits is
that 8(a) firms can receive federal contracting preferences in the form of set-aside and sole-source
awards. A set-aside award is a contract in which only certain contractors may compete, whereas a
sole-source award is a contract awarded, or proposed for award, without competition. As a
business development program, its overall goal is for 8(a) firms to graduate from the program and
continue to do well in a competitive business environment.
8(a) Program eligibility is generally limited to small businesses which are “unconditionally
owned and controlled by one or more socially and economically disadvantaged individuals who
are of good character and citizens of and residing in the United States” and demonstrate
“potential for success.”2 However, small businesses owned by Alaska Native Corporations
(ANCs), Community Development Corporations (CDCs), Indian tribes, and Native Hawaiian
Organizations (NHOs) are also eligible to participate in the 8(a) Program under somewhat
different terms. In FY2020, the federal government awarded $34.0 billion to 8(a) firms:
 nearly $20.5 billion was awarded with an 8(a) preference ($9.3 billion through an
8(a) set-aside and $11.1 billion through an 8(a) sole-source award);
 $2.2 billion was awarded to an 8(a) firm in open competition with other firms;
and
 $11.3 billion was awarded with another small business preference (e.g., set-
asides and sole-source awards for small businesses generally and for HUBZone
firms, women-owned small businesses, and service-disabled veteran-owned
small businesses).3
Other programs provide similar assistance to other types of small businesses (e.g., women-owned,
HUBZone, and service-disabled veteran-owned).
Congress has a perennial interest in small business programs, including the 8(a) Program. As
stated in the Small Business Act
It is the declared policy of the Congress that the Government should aid, counsel, assist,
and protect, insofar as is possible, the interests of small-business concerns in order to
preserve free competitive enterprise, to insure that a fair proportion of the total purchases
and contracts or subcontracts for property and services for the Government (including but
not limited to contracts or subcontracts for maintenance, repair, and construction) be placed
with small-business enterprises, to insure that a fair proportion of the total sales of

1 The 8(a) Program takes its name from one of the sections of the Small Business Act that authorizes it. The program is
also governed by Section 7(j) of the act. The Clinton Administration changed the program’s name from the Minority
Small Business and Capital Ownership Development Program to the 8(a) Business Development program in 1988 “to
emphasize that individuals need not be members of minority groups and to stress the importance of assisting
participating firms in their overall business development.” See SBA, “Small Business Size Regulations: 8(a) Business
Development/Small Disadvantaged Business Status Determinations; Rules of Procedure Governing Cases Before the
Office of Hearings and Appeals,” 63 Federal Register 35727, June 30, 1998.
2 13 C.F.R. §124.101.
3 Data generated using U.S. General Services Administration (GSA), “Sam.Gov data bank,” August 2, 2021, at
https://sam.gov/reports/awards/adhoc.
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SBA’s “8(a) Program”: Overview, History, and Current Issues

Government property be made to such enterprises, and to maintain and strengthen the
overall economy of the Nation.4
The Small Business Act also indicates “that the opportunity for full participation in our free
enterprise system by socially and economically disadvantaged persons is essential if we are to
obtain social and economic equality for such persons and improve the functioning of our national
economy.”5 To help achieve these goals, the 8(a) Program’s stated statutory purposes are to
(A) promote the business development of small business concerns owned and controlled
by socially and economically disadvantaged individuals so that such concerns can compete
on an equal basis in the American economy;
(B) promote the competitive viability of such concerns in the marketplace by providing
such available contract, financial, technical, and management assistance as may be
necessary; and
(C) clarify and expand the program for the procurement by the United States of articles,
supplies, services, materials, and construction work from small business concerns owned
by socially and economically disadvantaged individuals.6
Recent Congresses have had particular interest in the 8(a) Program largely because of its effects
on minority-owned small businesses and small businesses’ overall role in job creation.7
8(a) business development assistance has many forms, including business counseling and
mentoring, both in online and traditional face-to-face settings; access to capital and surety bond
guarantees; contract marketing guidance; and assistance with acquiring federal government
surplus property. In addition, the Small Business Administration (SBA) reviews and certifies
eligible clients; assigns SBA personnel (Business Opportunity Specialists, BOSs) to monitor and
measure each firm’s progress through annual reviews, business planning collaboration, and
systematic evaluations; helps to identify potential contract opportunities; and markets each firm’s
technical capabilities to federal agency procurement officials.
This report examines the 8(a) Program’s historical development, key requirements, administrative
structures and operations, and the SBA’s oversight of 8(a) firms. It also discusses two SBA
programs designed to support 8(a) firms, the 7(j) Management and Technical Assistance Program
and the All Small Mentor-Protégé Program, and provides various program statistics.8
It concludes with an analysis of the following current 8(a) Program issues:
 The SBA’s decision to address recent declines in the number of program
participants by revising and streamlining the program’s application process, an
action which the SBA’s Office of Inspector General (SBA OIG) reports “may
erode core safeguards that prevented questionable firms from entering the 8(a)
Program.”9

4 P.L. 85-536, Small Business Act of 1958, §2(a), 72 Stat. 384 (July 18, 1958) (codified at 15 U.S.C. §631(a)).
5 P.L. 85-536, §2(f)(1)(a), 72 Stat. 384 (July 18, 1958) (codified at 15 U.S.C. §631(f)(1)(a)).
6 P.L. 85-536, §2(f)(2)(A-C), 72 Stat. 384 (July 18, 1958) (codified at 15 U.S.C. §631(f)(2)(A-C)).
7 See CRS Report R41523, Small Business Administration and Job Creation, by Robert Jay Dilger and CRS Report
R40985, Small Business: Access to Capital and Job Creation, by Robert Jay Dilger.
8 For additional information and analysis of federal Mentor-Protégé programs, see CRS Report R41722, Small Business
Mentor-Protégé Programs, by Robert Jay Dilger.
9 U.S. Small Business Administration (SBA), Office of Inspector General (SBA OIG), Report on the Most Serious
Management and Performance Challenges in Fiscal Year 2017, Report Number 17-02, October 14, 2016, p. 11, at
https://www.sba.gov/sites/default/files/oig/FY_2017_-_Management_Challenges_-_10_14_16_7.pdf.
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SBA’s “8(a) Program”: Overview, History, and Current Issues

 Reported variation in 8(a) Program service delivery.
 Reported deficiencies in the oversight of 8(a) Program participant’s continuing
eligibility.
 Disagreements concerning the financial thresholds used to determine economic
disadvantage, including the SBA’s decision to exclude equity in a primary
residence from the calculation of an individual’s net worth.10
 The adequacy of the performance measures used to evaluate the program’s
effectiveness in meeting its statutory goals.
Historical Development
Program Origins
The current 8(a) Program is the result of the merger of two distinct types of federal programs:
those seeking to assist small businesses in general and those seeking to assist racial and ethnic
minorities. The merger first occurred, as a matter of executive branch practice, in 1967 and was
given a statutory basis in 1978.
Federal Programs for Small Businesses
In 1942, Congress first authorized a federal agency to enter into prime contracts with other
agencies and subcontract with small businesses for the performance of these contracts. The
agency was the Smaller War Plants Corporation (SWPC), which was partly created for this
purpose, and Congress gave it these powers to ameliorate small businesses’ financial difficulties
while “mobiliz[ing] the productive facilities of small business in the interest of successful
prosecution of the war.”11 The SWPC’s subcontracting authority expired along with the SWPC at
the end of the World War II. However, in 1951, at the start of the Korean War, Congress created
the Small Defense Plants Administration (SDPA), which was generally given the same powers
that the SWPC had exercised.12 Two years later, in 1953, Congress transferred the SDPA’s
subcontracting authorities, among others, to the newly created SBA,13 with the intent that the
SBA would exercise these powers in peacetime, as well as in wartime.14 When the Small Business
Act of 1958 transformed the SBA into a permanent agency, this subcontracting authority was
included in Section 8(a) of the act.15 At its inception, the SBA’s subcontracting authority was not
limited to small businesses owned and controlled by the socially and economically

10 SBA, OIG, Report on the Most Serious Management and Performance Challenges in Fiscal Year 2017, p. 12.
11 P.L. 77-603, Small Business Mobilization Act, §4(f), 56 Stat. 351 (June 11, 1942).
12 P.L. 82-96, An Act To amend and extend the Defense Production Act of 1950 and the Housing and Rent Act of
1947, as amended, §110, 65 Stat. 131 (July 31, 1951).
13 P.L. 83-163, Reconstruction Finance Corporation Liquidation Act, §207(c)-(d), 67 Stat. 230 (July 30, 1953).
14 See U.S. Congress, House Committee on Banking and Currency, Small Business Act of 1953, report to accompany
H.R. 5141, 83rd Cong., 1st sess., May 28, 1953, H.Rept. 83-494 (Washington: GPO, 1953), p. 2 (stating that the SBA
would “continue many of the functions of the [SDPA] in the present mobilization period and in addition would be
given powers and duties to encourage and assist small-business enterprises in peacetime as well as in any future war or
mobilization period”); and U.S. Congress, Senate Committee on Banking and Currency, Small Business Act, report to
accompany H.R. 7963, 85th Cong., 2nd sess., June 16, 1958, pp. 9, 10 (stating that the act would “put the procurement
assistance program on a peacetime basis”).
15 P.L. 85-536, as amended, §8(a)(1)-(2), 72 Stat. 384 (July 18, 1958).
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SBA’s “8(a) Program”: Overview, History, and Current Issues

disadvantaged. Under the original Section 8(a), the SBA could contract with any “small-business
concerns or others,”16 but it reportedly seldom, if ever, employed this subcontracting authority,
focusing instead upon its loan and other programs.17
Federal Programs for Racial and Ethnic Minorities
Federal programs for racial and ethnic minorities began developing at approximately the same
time as those for small businesses, although there was initially no explicit overlap between them.
The earliest programs were created by executive orders, beginning with President Franklin
Roosevelt’s order on June 25, 1941, requiring that all federal agencies include a clause in
defense-related contracts prohibiting contractors from discriminating on the basis of “race, creed,
color, or national origin.”18 Subsequent Presidents followed Roosevelt’s example, issuing a
number of executive orders seeking to improve the employment opportunities for various racial
and ethnic groups.19 These executive branch initiatives took on new importance after the Kerner
Commission’s report on the causes of the 1966 urban riots concluded that African Americans
would need “special encouragement” to enter the economic mainstream.20
Presidents Lyndon Johnson and Richard Nixon laid foundations for the present 8(a) Program in
the hope of providing such “encouragement.” Johnson created the President’s Test Cities Program
(PTCP), which involved a small-scale use of the SBA’s authority under Section 8(a) to award
contracts to firms willing to locate in urban areas and hire unemployed individuals, largely
African Americans, or sponsor minority-owned businesses by providing capital or management
assistance.21 However, under the PTCP, small businesses did not have to be minority-owned to
receive subcontracts under Section 8(a).22 Nixon’s program was larger and focused more
specifically on minority-owned small businesses.23 During the Nixon Administration, the SBA

16 P.L. 85-536, as amended, §8(a)(1)-(2), 72 Stat. 384 (July 18, 1958).
17 Thomas Jefferson Hasty, III, “Minority Business Enterprise Development and the Small Business Administration’s
8(a) Program: Past, Present, and (Is There a) Future?,” 145 Military Law Review pp. 1, 8 (Summer 1994). (“[B]ecause
the SBA believed that the efforts to start and operate an 8(a) program would not be worthwhile in terms of developing
small business, the SBA’s power to contract with other government agencies essentially went unused. The program
actually lay dormant for about fifteen years until the racial atmosphere of the 1960s provided the impetus to wrestle the
SBA’s 8(a) authority from its dormant state.”)
18 Executive Order No. 8802, “Reaffirming Policy of Full Participation in the Defense Program by All Persons,
Regardless of Race, Creed, Color, or National Origin, and Directing Certain Action in Furtherance of Said Policy,” 6
Federal Register 3109, June 25, 1941. Similar requirements were later imposed on nondefense contracts. See Executive
Order No. 9346, “Further Amending Executive Order No. 8802 by Establishing a New Committee on Fair Employment
Practice and Defining its Powers and Duties,” 8 Federal Register 7182, May 29, 1943.
19 See Executive Order No. 10308, “Improving the Means for Obtaining Compliance With the Nondiscrimination
Provisions of Federal Contracts,” 16 Federal Register 12303, December 3, 1951 (Truman); Executive Order No.
10557, “Approving the Revised Provision in Government Contracts Relating to Nondiscrimination in Employment,” 19
Federal Register 5655, September 3, 1954 (Eisenhower); Executive Order No. 10925, “Establishing the President’s
Committee on Equal Employment Opportunity,” 26 Federal Register 1977, March 6, 1961 (Kennedy); and Executive
Order No. 11458, “Prescribing Arrangements for Developing and Coordinating a National Program for Minority
Business Enterprise,” 34 Federal Register 4937, March 7, 1969 (Nixon).
20 The National Advisory Commission on Civil Disorders (known as the Kerner Commission after its chair, Governor
Otto Kerner Jr. of Illinois), Report of the National Advisory Commission on Civil Disorders (U.S. GPO, 1968), p. 21.
21 See Thomas Jefferson Hasty, III, “Minority Business Enterprise Development and the Small Business
Administration’s 8(a) Program: Past, Present, and (Is There a) Future?,” 145 Military Law Review, pp. 11, 12.
22 See Jonathan J. Bean, Big Government and Affirmative Action: The Scandalous History of the Small Business
Administration (Lexington, KY: University Press of Kentucky, 2001), p. 66.
23 See Executive Order No. 11625, “Prescribing Additional Arrangements for Developing and Coordinating a National
Program for Minority Business Enterprise,” 36 Federal Register 19967, October 13, 1971.
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promulgated its earliest regulations for the 8(a) Program. In 1970, the first of these regulations
articulated the SBA’s policy of using Section 8(a) to “assist small concerns owned by
disadvantaged persons to become self-sufficient, viable businesses capable of competing
effectively in the market place.”24 A later regulation, promulgated in 1973, defined disadvantaged
persons as including, but not limited to, “black Americans, Spanish-Americans, oriental
Americans, Eskimos, and Aleuts.”25 However, the SBA lacked explicit statutory authority for
focusing its 8(a) Program on minority-owned businesses until 1978,26 although courts generally
rejected challenges alleging that SBA’s implementation of the program was unauthorized because
it was “not specifically mentioned in statute.”27
1978 Amendments to the Small Business Act and Subsequent Regulations
In 1978, Congress amended the Small Business Act to give the SBA express statutory authority
for its 8(a) Program for minority-owned businesses.28 Under the 1978 amendments, the SBA can
only subcontract under Section 8(a) with “socially and economically disadvantaged small
business concerns,”29 or businesses that are least 51% owned by one or more socially and
economically disadvantaged individuals and whose management and daily operations are
controlled by such individual(s).30
The 1978 amendments established a basic definition of socially disadvantaged individuals, which
included those who have been “subjected to racial or ethnic prejudice or cultural bias because of
their identity as a member of a group without regard to their individual qualities.”31 They also
included congressional findings that “Black Americans, Hispanic Americans, Native Americans,
and other minorities” are socially disadvantaged.32 Thus, if an individual was a member of one of

24 13 C.F.R. §124.8-1(b) (1970).
25 13 C.F.R. §124.8(c) (1973).
26 U.S. Congress, Senate Select Committee on Small Business, Amending the Small Business Act and the Small
Business Investment Act of 1958, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-1070 (Washington: GPO, 1978), p.
14 (“One of the underlying reasons for the failure of this effort is that the program has no legislative basis.”); and U.S.
Congress, House Committee on Small Business, Amending the Small Business Act and the Small Business Investment
Act of 1958, report to accompany H.R. 11318, 95th Cong., 2nd sess., March 13, 1978, H.Rept. 95-949 (Washington:
GPO, 1978), p. 4 (“Congress has never extended legislative control over the activities of the 8(a) program, save through
indirect appropriations, thereby permitting program operations.… [The] program is not as successful as it could be.”).
27 See Ray Billie Trash Hauling, Inc. v. Kleppe, 477 F.2d 696, 703-05 (5th Cir. 1973). In this case, the court particularly
noted that the SBA’s program was supported by congressional and presidential mandates issued after enactment of the
Small Business Act in 1958.
28 P.L. 95-507, To amend the Small Business Act and the Small Business Investment Act of 1958, 92 Stat. 1757
(October 24, 1978).
29 P.L. 95-507, To amend the Small Business Act and the Small Business Investment Act of 1958, §202.
30 P.L. 95-507, To amend the Small Business Act and the Small Business Investment Act of 1958, §202 (codified at 15
U.S.C. §637(a)(4)(A)-(B)). Firms that are owned and controlled by Indian tribes, ANCs, or NHOs were later included
within the definition of a “socially and economically disadvantaged small business concern.”
31 P.L. 95-507, To amend the Small Business Act and the Small Business Investment Act of 1958, §202 (codified at 15
U.S.C. §637(a)(5)).
32 P.L. 95-507, To amend the Small Business Act and the Small Business Investment Act of 1958, §202 (codified, as
amended, at 15 U.S.C. §631(f)(1)(C)). The meaning of socially disadvantaged individuals was the subject of much
debate at that time. Some Members of Congress viewed the 8(a) Program as a program for African Americans and
would have defined social disadvantage accordingly. See Parren J. Mitchell, “Federal Affirmative Action for MBE’s:
An Historical Analysis,” 1 National Bar Association Magazine 46 (1983). (Mitchell was a Member of the U.S. House
of Representatives and leader of the Congressional Black Caucus at that time.). Others favored including both African
Americans and Native Americans arguing that only those who did not come to the United States seeking the “American
dream” should be deemed socially disadvantaged. See U.S. Congress, House Committee on Small Business, Minority
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these groups, he or she was presumed to be socially disadvantaged. Otherwise, the amendments
were generally seen to grant the SBA discretion to recognize additional groups or individuals as
socially disadvantaged based upon criteria promulgated in regulations.33 Under these regulations,
which include a three-part test for determining whether minority groups not mentioned in the
amendment’s findings are disadvantaged,34 the SBA recognized the racial or ethnic groups listed
in Table 1 as socially disadvantaged for 8(a) purposes.35 The regulations also established
standards of evidence to be met by individuals demonstrating personal disadvantage and
procedures for rebutting the presumption of social disadvantage accorded to members of
recognized minority groups.36

Enterprise and General Oversight, General Review of Major SBA Programs and Activities, 95th Cong., 2nd sess., June
20, 1978, H721-41 (Washington: GPO, 1978), p. 21. Yet others suggested that groups that are not racial or ethnic
minorities, such as women, should be able to qualify as “socially disadvantaged,” or that individuals ought to be able to
prove they are personally socially disadvantaged even if they are not racial or ethnic minorities. See U.S. Congress,
House Committee on Small Business, Amending the Small Business Act and the Small Business Investment Act of 1958,
report to accompany H.R. 11318, 95th Cong., 2nd sess., March 13, 1978, H.Rept. 95-949 (Washington: GPO, 1978), p.
9. The House-passed version of the bill defined socially disadvantaged individuals, in part, by establishing a rebuttable
presumption that African Americans and Hispanic Americans are socially disadvantaged, but the Senate-passed bill did
not reference any racial or ethnic groups in defining social disadvantage. See U.S. Congress, House Committee of
Conference, Amending the Small Business Act and the Small Business Investment Act of 1958, report to accompany
H.R. 11318, 95th Cong., 2nd sess., October 4, 1978, Conf. Rept. 95-1714 (Washington: GPO, 1978), p. 20; and U.S.
Congress, Senate Select Committee on Small Business, Amending the Small Business Act and the Small Business
Investment Act of 1958, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-1070 (Washington: GPO, 1978), pp. 13-16.
The conference committee reconciling the House and Senate versions ultimately arrived at a definition of socially
disadvantaged individuals that included “those who have been subjected to racial or ethnic prejudice or cultural bias
because of their identity as a member of a group.” See P.L. 95-507, at §202. The conference committee also included
congressional findings that “Black Americans, Hispanic Americans, Native Americans, and other minorities” are
socially disadvantaged. See P.L. 95-507, at §201.
Congress subsequently added “Asian Pacific Americans” (P.L. 96-302, An original bill to provide authorizations for
the Small Business Administration, and for other purposes), “Indian tribes” (P.L. 99-272, the Consolidated Omnibus
Budget Reconciliation Act of 1985 (Title XVIII—Small Business Programs), and “Native Hawaiian Organizations”
(P.L. 100-656, the Business Opportunity Development Reform Act of 1988) to the groups whom it finds to be socially
disadvantaged. See 15 U.S.C. §631(f)(1)(C)). For additional information concerning the SBA’s administrative
decisions on groups seeking to be presumed socially disadvantaged, see George R. LaNoue, and John C. Sullivan,
“Presumptions for Preferences: The Small Business Administration’s Decisions on Groups Entitled to Affirmative
Action,” Journal of Policy History, vol. 6, no. 4 (1994), at https://www.cambridge.org/core/journals/journal-of-policy-
history/article/presumptions-for-preferences-the-small-business-administrations-decisions-on-groups-entitled-to-
affirmative-action/99AFFC9D3FF1C1F1D520D9D3600B1E32.
33 P.L. 95-507, at §201 (stating that the groups Congress finds to be socially disadvantaged include, but are not limited
to, those specified here); P.L. 95-507, at §202 (authorizing the award of contracts to socially disadvantaged
individuals); and U.S. Congress, House Committee on Small Business, Amending the Small Business Act and the Small
Business Investment Act of 1958, report to accompany H.R. 11318, 95th Cong., 2nd sess., March 13, 1978, H.Rept. 95-
949 (Washington: GPO, 1978), p. 9 (expressing the view that §201 and §202 of the bill provide “sufficient discretion
… to allow SBA to designate any other additional minority group or persons it believes should be afforded the
presumption of social … disadvantage”).
34 See 13 C.F.R. §124.103(d)(2)(i)-(iii)(1980).
35 13 C.F.R. §124.103(b). Different groups are sometimes recognized as socially disadvantaged for purposes of other
programs, such as those of the Department of Commerce’s Minority Business Development Agency (MBDA). See 15
C.F.R. §1400.1(b). The SBA has rejected petitions from certain groups, including Hasidic Jews, women, disabled
veterans, and Iranian-Americans. See George R. La Noue and John C. Sullivan, “Gross Presumptions: Determining
Group Eligibility for Federal Procurement Preferences,” 41 Santa Clara Law Review 103, 127-129 (2000). However,
Hasidic Jews are eligible to receive assistance from the MBDA, whereas women are deemed to be disadvantaged for
purposes of the Department of Transportation’s Disadvantaged Business Enterprise (DBE) program. See 49 U.S.C.
§47113(a)(2) (DBE program); and 15 C.F.R. §1400.1(c) (MBDA program).
36 13 C.F.R. §124.103(c)(2) (standards of evidence for showing personal disadvantage); and 13 C.F.R. §124.103(b)(3)
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Table 1. Groups Presumed to Be Socially Disadvantaged
Group
Countries of Origin Included Within Group
Black Americans
n/a
Hispanic Americans
n/a
Native Americans
n/a
(including American
Indians, Eskimos, Aleuts,
Native Hawaiians)
Asian Pacific Americans
Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China (including Hong
Kong), Taiwan, Laos, Cambodia, Vietnam, Korea, The Philippines, U.S. Trust Territory
of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands, Federated
States of Micronesia, Commonwealth of the Northern Mariana Islands, Guam, Samoa,
Macao, Fiji, Tonga, Kiribati, Tuvalu, Nauru
Subcontinent Asian
India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands, Nepal
Americans
Source: Congressional Research Service, based on 13 C.F.R. §124.103(b).
The 1978 amendments also defined economically disadvantaged individuals, for purposes of the
8(a) Program, as “those socially disadvantaged individuals whose ability to compete in the free
enterprise system has been impaired due to diminished capital and credit opportunities as
compared to others in the same business area who are not socially disadvantaged.”37 Initially, the
SBA determined economic disadvantage by examining
 the applicant’s personal financial condition (including their personal net worth,
personal income for at least the past two years, and the total fair market value of
their assets);
 the applicant’s access to credit and capital;
 the business’s financial condition; and
 the business’s access to credit, capital, and markets.38
Over the years, many small business owners and others recommended that the SBA create
objective monetary thresholds for determining how the applicant’s personal financial condition
affects economic disadvantage. In response, in 1989, the SBA announced in the Federal Register
that applicants needed personal net worth of less than $250,000 (excluding ownership in the 8(a)
firm and equity in his or her primary residence) at the time of entry into the program, and less
than $750,000 for continuing eligibility.39 Objective monetary thresholds for personal income and
total assets were not added.

(mechanisms for overcoming the presumption of social disadvantage).
37 P.L. 95-507, at §202.
38 SBA, “Minority Small Business and Capital Ownership Development Program: Final Rule,” 54 Federal Register
34719, August 21, 1989.
39 SBA, “Minority Small Business and Capital Ownership Development Program: Final Rule,” 54 Federal Register
34696, August 21, 1989 (codified, as amended, at 13 C.F.R. §124.104(c)). Some commentators have estimated that
80% to 90% of Americans are economically disadvantaged under the SBA’s net-worth requirements. See La Noue and
Sullivan, “Gross Presumptions: Determining Group Eligibility for Federal Procurement Preferences,” 41 Santa Clara
Law Review, p. 108.
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In 2011, the SBA announced in the Federal Register that it would no longer count funds invested
in an official retirement account that are unavailable to the applicant without a significant penalty
in determining the applicant’s net worth. Also, the SBA announced that the applicant’s average
adjusted gross income over the preceding three years generally cannot exceed $250,000 at the
time of application and $350,000 for continuing eligibility. In addition, the fair market value of
the applicant’s assets (excluding funds invested in an official retirement account that are
unavailable to the applicant without a significant penalty) cannot exceed $4 million at entry and
$6 million for continued eligibility.40
On May 11, 2020, the SBA announced in the Federal Register that, as of July 15, 2020, personal
net worth of less than $750,000, both at the time of entry into the 8(a) program and for continuing
eligibility, will constitute economic disadvantage.41 The SBA indicated that it was eliminating the
$250,000 personal net worth threshold at the time of entry into the 8(a) program to bring the 8(a)
program into conformity with the personal net worth threshold used for determining the status of
economically disadvantaged women-owned small businesses (EDWOSBs) in the SBA’s Women-
Owned Small Business (WOSB) federal contracting program.42 That program uses less than
$750,000 in personal net worth for determining economic disadvantage. The SBA noted that a
small business applying for EDWOSB and 8(a) program status simultaneously
could thus be found economically disadvantaged for EDWOSB purposes, but not
economically disadvantaged for the 8(a) BD [Business Development] program. This result
would introduce unnecessary confusion and uncertainty into the application and
certification process. To remedy this, this final rule makes economic disadvantage
consistent across programs.43
The SBA also announced that
 funds invested in an official retirement account will not be considered in
determining net worth (eliminating the requirement that the funds are subject to a
significant withdrawal penalty);
 the applicant’s average adjusted gross income over the three preceding years
cannot exceed $350,000 (eliminating the $250,000 personal income threshold at
the time of application); and
 the fair market value of the applicant’s assets (excluding funds invested in an
official retirement account) cannot exceed $6 million (eliminating the $4 million
asset threshold at entry).44

40 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8229-8231, February 11, 2011.
41 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85 Federal Register 27650-27665, May 11, 2020.
42 For additional information and analysis of the Women-Owned Small Business (WOSB) federal contracting program,
see CRS Report R46322, SBA Women-Owned Small Business Federal Contracting Program, by Robert Jay Dilger.
43 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85 Federal Register 27650, May 11, 2020.
44 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85 Federal Register 27660, May 11, 2020.
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Adding “Disadvantaged” Groups
Although the 8(a) Program was originally established for the benefit of disadvantaged
individuals, in the 1980s, Congress expanded the program to include small businesses owned by
four disadvantaged groups.
The first owner-group to be included was Community Development Corporations (CDCs). A
CDC is
a nonprofit organization responsible to residents of the area it serves which is receiving
financial assistance under part A of this subchapter [42 U.S.C. §§9805 et seq.] and any
organization more than 50 percent of which is owned by such an organization, or otherwise
controlled by such an organization, or designated by such an organization for the purpose
of this subchapter [42 U.S.C. §§9801 et seq.].45
Congress created CDCs with the Community Economic Development Act of 1981 and instructed
the SBA to issue regulations ensuring that CDCs could participate in the 8(a) Program.46
In 1986, two additional owner-groups, Indian tribes and Alaska Native Corporations (ANCs),
became eligible for the program when Congress passed legislation providing that firms owned by
Indian tribes, which include ANCs, were to be deemed socially disadvantaged for 8(a) Program
purposes.47 In 1992, ANCs were further deemed to be “economically disadvantaged.”48
The final owner-group, Native Hawaiian Organizations (NHOs), was recognized in 1988.49 An
NHO is defined as
any community service organization serving Native Hawaiians in the State of Hawaii
which (A) is a nonprofit corporation that has filed articles of incorporation with the director
(or the designee thereof) of the Hawaii Department of Commerce and Consumer Affairs,
or any successor agency, (B) is controlled by Native Hawaiians, and (C) whose business
activities will principally benefit such Native Hawaiians.50
Program Requirements
Detailed statutory and regulatory requirements govern 8(a) Program eligibility, set-aside and sole-
source awards, and related issues. These requirements are generally the same for all 8(a) firms,

45 42 U.S.C. §9802.
46 P.L. 97-35, Omnibus Budget Reconciliation Act of 1981, Ch. 8, Subchapter A, 95 Stat. 489 (August 13, 1981)
(codified at 42 U.S.C. §§9801 et seq.); and P.L. 97-35, Omnibus Budget Reconciliation Act of 1981, at §626, 95 Stat.
496 (codified at 42 U.S.C. §9815(a)(2)). (“Not later than 90 days after August 13, 1981, the Administrator of the Small
Business Administration, after consultation with the Secretary, shall promulgate regulations to ensure the availability to
community development corporations of such programs as shall further the purposes of this subchapter, including
programs under §637(a) of title 15.”)
47 P.L. 99-272, Consolidated Omnibus Budget Reconciliation Act of 1985, §18015, 100 Stat. 370 (April 7, 1986)
(codified at 15 U.S.C. §637(a)(13) and 15 U.S.C. §637(a)(4)).
48 P.L. 102-415, Alaska Land Status Technical Corrections Act of 1992, §10, 106 Stat. 2115 (October 14, 1992)
(codified at 43 U.S.C. §1626(e)).
49 P.L. 100-656, Business Opportunity Development Reform Act of 1988, at §207, 102 Stat. 3861 (November 15, 1988)
(codified at 15 U.S.C. §637(a)(4)).
50 P.L. 100-656, Business Opportunity Development Reform Act of 1988, at §207 (codified at 15 U.S.C. §637(a)(15)).
A Native Hawaiian is “any individual whose ancestors were natives, prior to 1778, of the area which now comprises
the State of Hawaii.” 13 C.F.R. §124.3.
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although there are instances where there are “special rules” for group-owned 8(a) firms.51 An
Appendix to this report compares the requirements applicable to individual owners of 8(a) firms
to those applicable to groups owning 8(a) firms (i.e., ANCs, CDCs, NHOs, and Indian tribes).
General Requirements
Program Eligibility
As mentioned previously, 8(a) Program eligibility is limited to “small business[es] which [are]
unconditionally owned and controlled by one or more socially and economically disadvantaged
individuals who are of good character and citizens of and residing in the United States, and which
demonstrates potential for success.”52 Each of these terms is defined by the Small Business Act;
SBA regulations; and judicial and administrative decisions.53 The eligibility requirements are the
same at the time of entry into the program and throughout the program unless otherwise noted.54
Business
Except for small agricultural cooperatives, a business is a for-profit entity that has a place of
business located in the United States and operates primarily within the United States or makes a
significant contribution to the U.S. economy by paying taxes or using American products,
materials, or labor.55 For 8(a) Program purposes, businesses are individual proprietorships,
partnerships, limited liability companies, corporations, joint ventures, associations, trusts, or
cooperatives.56
Small
A business is small if it is independently owned and operated; is not dominant in its field of
operations; and meets any definitions or standards established by the SBA Administrator.57 These
standards focus primarily upon the size of the business as measured by the number of employees
or average annual receipts (gross income for sole proprietorships), but they also take into account
the size of other businesses within the same industry.58 For example, businesses in the field of

51 13 C.F.R. §124.109(a) (“Special rules for ANCs. Small business concerns owned and controlled by ANCs are
eligible for participation in the 8(a) program and must meet the eligibility criteria set forth in §124.112 to the extent the
criteria are not inconsistent with this section.”) (emphasis in original).
52 13 C.F.R. §124.101. The Office of Legal Counsel at the Department of Justice has opined that SBA regulations
limiting eligibility for the 8(a) Program to citizens do not deprive resident aliens of due process in violation of the Fifth
Amendment to the U.S. Constitution. See U.S. Department of Justice, Office of Legal Counsel, Constitutionality of 13
C.F.R. §124.103 Establishing Citizenship Requirement for Participation in 8(a) Program, 20 Op. O.L.C. 85 (1996).
53 The SBA’s Office of Hearings and Appeals has, for example, developed a seven-part test for determining whether a
small business is unusually reliant on a contractor that is used in determining affiliation. See Valenzuela Eng’g, Inc. &
Curry Contracting Co., Inc., SBA-4151 (1996).
54 13 C.F.R. §124.112(a).
55 13 C.F.R. §121.105(a)(1). “Business” is separately defined for small agricultural cooperatives. See 13 C.F.R.
§121.105(a)(2).
56 13 C.F.R. §121.105(b).
57 15 U.S.C. §632(a)(1)-(2)(A).
58 13 C.F.R. §§121.101-121.109. The number of employees is the average number in each pay period for the preceding
12 calendar months. Receipts means total income (or in the case of a sole proprietorship, gross income) plus cost of
goods sold as these terms are defined and reported on Internal Revenue Service tax return forms. Where possible,
receipts are based on the average for the last three completed fiscal years. It includes all revenues, not just those from
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scheduled passenger air transportation are small if they have 1,500 or fewer employees, whereas
those in the data processing field are small if they have average annual receipts of $32.5 million
or less.59
Affiliations among businesses, or relationships allowing one party control or the power of control
over another, generally count in size determinations, with the SBA considering “the receipts,
employees, or other measure of size of the concern whose size is at issue and all of its domestic
and foreign affiliates, regardless of whether the affiliates are organized for profit.”60 Businesses
can thus be determined to be other than small because of their involvement in joint ventures,
subcontracting arrangements, or franchise or license agreements, among other things, provided
that their income or personnel numbers, plus those of their affiliate(s), are over the pertinent size
threshold.61
Unconditionally Owned and Controlled
8(a) firms must be “at least 51% unconditionally and directly owned by one or more socially and
economically disadvantaged individuals who are citizens of the United States” unless they are
owned by an ANC, CDC, NHO, or Indian tribe.62 Ownership is unconditional when it is not
subject to any conditions precedent or subsequent, executory agreements, voting trusts,
restrictions on or assignments of voting rights, or other arrangements that could cause the benefits
of ownership to go to another entity.63 Ownership is direct when the disadvantaged individuals
own the business in their own right and not through an intermediary (e.g., ownership by another
business entity or by a trust that is owned and controlled by one or more disadvantaged
individuals).64 Nondisadvantaged individuals and nonparticipant businesses that own at least 10%
of an 8(a) business may generally own no more than 10% to 20% of any other 8(a) firm.65
Nonparticipant businesses that earn the majority of their revenue in the same or similar line of
business are likewise barred from owning more than 10% (increasing to 20%-30% in certain
circumstances) of another 8(a) firm.66
In addition, 8(a) firms must be controlled by one or more disadvantaged individuals.67 “Control is
not the same as ownership” and includes both strategic policy setting and day-to-day management
and administration of business operations.68 Management and daily business operations must be
conducted by one or more disadvantaged individuals unless the 8(a) business is owned by an
ANC, CDC, NHO, or Indian tribe.69 These individuals must have managerial experience “of the
extent and complexity needed to run the concern” and generally must devote themselves full-time

the firm’s primary industry. See 13 C.F.R. §121.104.
59 13 C.F.R. §121.201.
60 13 C.F.R. §121.103(a)(6).
61 13 C.F.R. §121.103(h); 13 C.F.R. §121.103(h)(4); and 13 C.F.R. §121.103(i).
62 13 C.F.R. §124.105 (defining unconditional ownership). See also 15 U.S.C. §637(a)(4)(A)(i)-(ii) (requiring at least
51% unconditional ownership).
63 13 C.F.R. §124.3.
64 13 C.F.R. §124.105(a).
65 13 C.F.R. §124.105(h)(1). Ownership is limited to 10% when the 8(a) firm in is the developmental stage of the 8(a)
Program and 20% when it is in the transitional stage.
66 13 C.F.R. §124.105(h)(2).
67 15 U.S.C. §637(a)(4)(A)(i)-(ii) (requiring control of management and business operations); 13 C.F.R. §124.106.
68 13 C.F.R. §124.106.
69 13 C.F.R. §124.106.
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to the business “during the normal working hours of firms in the same or similar line of
business.”70 A disadvantaged individual must hold the highest officer position within the
business.71 Nondisadvantaged individuals may otherwise be involved in the management of an
8(a) business, or may be stockholders, partners, limited liability members, officers, or directors of
an 8(a) business.72 However, nondisadvantaged individuals may not exercise actual control or
have the power to control the firm or its disadvantaged owner(s), or receive compensation greater
than that of the highest-paid officer (usually the chief executive officer or president) without the
SBA’s approval.73
Socially Disadvantaged Individual
Socially disadvantaged individuals are “those who have been subjected to racial or ethnic
prejudice or cultural bias within American society because of their identities as members of
groups and without regard to their individual qualities.”74 Members of designated groups, listed in
Table 1, are entitled to a rebuttable presumption of social disadvantage for 8(a) Program
purposes, although this presumption can be overcome with “credible evidence to the contrary.”75
Individuals who are not designated-group members must prove they are socially disadvantaged
by a preponderance of the evidence.76 Such individuals must show (1) at least one objective
distinguishing feature that has contributed to social disadvantage (e.g., race, ethnic origin, gender,
physical handicap, long-term residence in an environment isolated from mainstream American
society); (2) personal experiences of substantial and chronic social disadvantage in American
society; and (3) negative impact on entry into or advancement in the business world.77 In
assessing the third factor, the SBA will consider all relevant evidence the applicant produces, but
must consider the applicant’s education, employment, and business history to see if the totality of
the circumstances shows disadvantage.78 Groups not included in Table 1 may obtain eligibility by
demonstrating disadvantage by a preponderance of the evidence.79
Economically Disadvantaged Individual
Economically disadvantaged individuals are “socially disadvantaged individuals whose ability to
compete in the free enterprise system has been impaired due to diminished capital and credit
opportunities as compared to others in the same or similar line of business who are not socially
disadvantaged.”80 Individuals claiming economic disadvantage must submit financial
documentation for eligibility purposes.81 As mentioned, the SBA examines the individual’s

70 13 C.F.R. §124.106 & §124.106(a)(3).
71 13 C.F.R. §124.106(a)(2).The individual must also be physically located in the United States.
72 13 C.F.R. §124.106(e).
73 13 C.F.R. §124.106(e)(1) & (3).
74 13 C.F.R. §124.103(a). See also 15 U.S.C. §637(a)(5).
75 13 C.F.R. §124.103(b)(3).
76 13 C.F.R. §124.103(c)(1).
77 13 C.F.R. §124.103(c)(2)(i)-(iii).
78 13 C.F.R. §124.103(c)(2)(iii).
79 13 C.F.R. §124.103(d)(4). Groups petitioning for recognition as socially disadvantaged do not always obtain it. Over
the years, the SBA has rejected petitions from Hasidic Jews, women, disabled veterans, and Iranian-Americans. See
supra note 35.
80 13 C.F.R. §124.104(a). See also 15 U.S.C. §637(a)(6)(A).
81 13 C.F.R. §124.104(b)(1).
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personal income for the past three years, their net worth, and the fair market value of their
assets.82 To be economically disadvantaged, an individual must have a net worth of less than
$750,000 (excluding ownership interest in the applicant’s business, equity in their primary
personal residence, and funds invested in an official retirement account), no more than $350,000
in average adjusted gross income over the preceding three years, and no more than $6 million in
assets (excluding funds invested in an official retirement account).
Good Character
In determining whether an applicant to, or participant in, the 8(a) Program possesses good
character, the SBA considers any criminal conduct, violations of SBA regulations, current
debarment or suspension from government contracting, managers or key employees who lack
business integrity, and the knowing submission of false information to the SBA.83
Demonstrated Potential for Success
For a firm to have demonstrated potential for success, it generally must have been in business in
its primary industry classification for at least two full years immediately prior to the date of its
application to the 8(a) Program.84 However, the SBA may grant a waiver allowing firms that have
been in business for less than two years to enter the program under specified circumstances.85
Set-Asides and Sole-Source Awards Under Section 8(a)
Section 8(a) of the Small Business Act authorizes agencies to award contracts for goods or
services, or to perform construction work, to the SBA for subcontracting to 8(a) firms. The act
also authorizes the SBA to delegate the function of executing contracts to the procuring agencies
and often does so.86
A set-aside award is a contract awarded in which only certain contractors may compete, whereas
a sole-source award is a contract awarded, or proposed for award, without competition.87 The
Competition in Contracting Act (CICA) generally requires federal agencies to allow full and open
competition through the use of competitive procedures when procuring goods or services.
However, set-aside and sole-source awards to 8(a) firms are permissible under CICA under
certain circumstances. In fact, an 8(a) set-aside is a recognized competitive procedure.88 Agencies

82 13 C.F.R. §124.104(c). See also 15 U.S.C. §637(a)(6)(E)(i)-(ii).
83 13 C.F.R. §124.108(a)(1)-(5).
84 13 C.F.R. §124.107.
85 A waiver to the two-year requirement may be granted when (1) the disadvantaged individual(s) upon whom
eligibility is based have substantial business management experience; (2) the business has demonstrated the technical
experience necessary to carry out its business plan with a substantial likelihood of success; (3) the firm has adequate
capital to sustain its operations and carry out its business plan; (4) the firm has a record of successful performance on
contracts in its primary field of operations; and (5) the firm presently has, or can demonstrate its ability to timely
obtain, the personnel, facilities, equipment, and other resources necessary to perform 8(a) contracts. See 13 C.F.R.
§124.107(b)(1)(i)-(v).
86 13 C.F.R. §124.501(a); Partnership Agreement Between the U.S. Small Business Administration and the U.S.
Department of Defense, January 7, 2013, at http://www.sba.gov/sites/default/files/files/
Department%20of%20Defense.pdf.
87 Set-asides may be total or partial. See 48 C.F.R. §19.501(a).
88 10 U.S.C. §2304(b)(2), 41 U.S.C. §3303(b) (the Competition in Contracting Act (CICA) provisions authorizing set-
asides for small businesses); and 48 C.F.R. §§6.203-6.207 (set-asides for small business generally, 8(a) small
businesses, Historically Underutilized Business Zone [HUBZone] small businesses, service-disabled veteran-owned
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are effectively encouraged to subcontract through the 8(a) Program because there are
government-wide and agency-specific goals regarding the percentage of procurement dollars
awarded to small disadvantaged businesses, which include 8(a) firms (the current government-
wide goal is 5% of all small business eligible federal contracts).89
Discretion to Subcontract Through the 8(a) Program
There are few limits on agency discretion to subcontract through the 8(a) Program.90 However,
the SBA is prohibited by regulation from accepting procurements for award under Section 8(a)
when
1. the procuring agency issued a solicitation for or otherwise expressed publicly a
clear intent to reserve the procurement as a set-aside for small businesses not
participating in the program prior to offering the requirement to the SBA for
award as an 8(a) contract;91
2. the procuring agency competed the requirement among 8(a) firms prior to
offering the requirement to the SBA and receiving the SBA’s acceptance of it;92
or
3. the SBA makes a written determination that “acceptance of the procurement for
8(a) award would have an adverse impact on an individual small business, a
group of small businesses located in a specific geographical location, or other
small business programs.”93

small businesses, and women-owned small businesses). CICA authorizes competitions excluding all sources other than
small businesses when such competitions assure that a “fair proportion of the total purchases and contracts for property
and services for the Federal Government shall be placed with small business concerns.” 41 U.S.C. §3104. CICA also
permits sole-source awards when such awards are made pursuant to a procedure expressly authorized by statute, or
when special circumstances exist (e.g., urgent and compelling circumstances). See 10 U.S.C. §2304(c)(1) (defense
agency procurements) and 41 U.S.C. §§3301 and 3304(a) (civilian agency procurements).
89 13 C.F.R. §124.1002 (defining “small disadvantaged business”).
The federal government uses aspirational procurement goals instead of requiring federal agencies to award specific
percentages of federal contracts to various types of small businesses primarily to avoid legal challenges under the equal
protection component of the Fifth Amendment’s Due Process Clause. See, for example, City of Richmond v. J.A.
Croson Co., 488 U.S. 469 (1989) (finding unconstitutional a municipal ordinance that required the city’s prime
contractors to award at least 30% of the value of each contract to minority subcontractors) and Adarand Constructors,
Inc. v. Pena 515 U.S. 200 (1995) (finding that all racial classifications, whether imposed by federal, state, or local
authorities, must pass strict scrutiny review).
90 AHNTECH, Inc., B-401092 (April 22, 2009) (“The [Small Business] Act affords the SBA and contracting agencies
broad discretion in selecting procurements for the 8(a) program.”).
91 Even in this situation, SBA may accept the requirement under “extraordinary circumstances.” 13 C.F.R. §124.504(a);
Madison Services, Inc., B-400615 (December 11, 2008) (finding that extraordinary circumstances existed when the
agency’s initial small business set-aside was erroneous and did not reflect its intentions).
92 However, offers of requirements below the simplified acquisition threshold (generally $150,000) are assumed to
have been accepted if SBA does not reply within two days. 13 C.F.R. §124.503(a)(4)(i). See also Eagle Collaborative
Computing Services, Inc., B-401043.3 (January 28, 2011) (finding that an agency properly awarded a sole-source
contract valued below the simplified acquisition threshold even though the SBA never formally accepted the
requirements).
93 13 C.F.R. §124.504(a)-(c). The third provision applies only to preexisting requirements. It generally does not apply
to new contracts, follow-on or renewal contracts, or procurements conducted using simplified acquisition procedures.
Also, under its regulations, the SBA must presume an adverse impact when “(A) The small business concern has
performed the specific requirement for at least 24 months; (B) The small business is performing the requirement at the
time it is offered to the 8(a) ... program, or its performance of the requirement ended within 30 days of the procuring
activity’s offer of the requirement to the 8(a) ... program; and (C) The dollar value of the requirement that the small
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In addition, the SBA is barred from awarding an 8(a) contract, either via a set-aside or on a sole-
source basis, “if the price of the contract results in a cost to the contracting agency which exceeds
a fair market price.”94
Otherwise, agency officials may offer contracts to the SBA “in [their] discretion,” and the SBA
may accept requirements for the 8(a) Program “whenever it determines such action is necessary
or appropriate.”95 The courts and the Government Accountability Office (GAO) will generally not
hear protests of agencies’ determinations regarding whether to procure specific requirements
through the 8(a) Program unless it can be shown that government officials acted in bad faith or
contrary to federal law.96
Monetary Thresholds and Subcontracting Mechanisms
Once the SBA has accepted a contract for the 8(a) Program, the contract is awarded through
either a set-aside or on a sole-source basis, with the contract amount generally determining the
acquisition method used. When the contract’s anticipated total value, including any options, is
less than $4.5 million ($7.5 million for manufacturing contracts), the contract is normally
awarded without competition.97 In contrast, when the contract’s anticipated value exceeds these
thresholds, the contract generally must be awarded via a set-aside with competition limited to 8(a)
firms so long as there is a reasonable expectation that at least two eligible and responsible 8(a)
firms will submit offers and the award can be made at fair market price.98 Sole-source awards of
contracts valued at $4.5 million ($7.5 million or more for manufacturing contracts) may be made
only when (1) there is not a reasonable expectation that at least two eligible and responsible 8(a)
firms will submit offers at a fair market price or (2) the SBA accepts the requirement on behalf of
an 8(a) firm owned by an Indian tribe, an ANC or, in the case of Department of Defense
contracts, an NHO.99 Requirements valued at more than $4.5 million ($7.5 million for

business is or was performing is 25 percent or more of its most recent annual gross sales (including those of its
affiliates).” See 13 C.F.R. §124.504(c)(1)(i)(A)-(C).
94 15 U.S.C. §637(a)(1)(A); 48 C.F.R. §19.806(b). Fair market price is estimated by looking at recent prices for similar
items or work, in the case of repeat purchases, or by considering commercial prices for similar products or services,
available in-house cost estimates, cost or pricing data submitted by the contractor, or data from other government
agencies, in the case of new purchases. 15 U.S.C. §637(a)(3)(B)(i)-(iii); 48 C.F.R. §19.807(b) & (c).
95 15 U.S.C. §637(a)(1)(A).
96 See Rothe Computer Solutions, LLC, B-299452 (May 9, 2007).
97 15 U.S.C. §637(a)(16)(A). A noncompetitive award may be made under this authority so long as (1) the firm is
determined to be a responsible contractor for performance of the contract; (2) the award of the contract would be
consistent with the firm’s business plan; and (3) award of the contract would not result in the firm exceeding the
percentage of revenue from 8(a) sources forecast in its annual business plan. 15 U.S.C. §637(a)(16)(A)(i)-(iii).
98 15 U.S.C. §637(a)(1)(D)(ii); 48 C.F.R. §19.805-1(a). However, competitive awards for contracts whose anticipated
value is less than $4.5 million ($7.5 million for manufacturing contracts) can be made with the approval of the SBA’s
Associate Administrator for 8(a) Business Development. 15 U.S.C. §637(a)(1)(D)(i)(I)-(II); 48 C.F.R. §19.805-1(d).
99 48 C.F.R. §19.805-1(b)(1)-(2) (sole-source awards to tribally or ANC-owned firms); and 48 C.F.R. §219.805-
1(b)(2)(A)-(B) (sole-source awards to NHO-owned firms). Prior to enactment of P.L. 111-84, the National Defense
Authorization Act (NDAA) for FY2010, contracting officers making sole-source awards in reliance on the second
exception did not have to justify such awards or obtain approval of them from higher-level agency officials. The
NDAA changed this by requiring justifications, approvals, and notices for sole-source contracts in excess of $20
million awarded under the authority of §8(a) analogous to those required for sole-source contracts awarded under the
general contracting authorities. The $20 million threshold was increased through a regulatory update to $22 million,
effective October 1, 2015, to account for inflation and to $100 million by P.L. 116-92, the National Defense
Authorization Act for Fiscal Year 2020.
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manufacturing contracts) cannot be divided into several acquisitions at lesser amounts in order to
make sole-source awards.100
In addition, the Federal Acquisition Regulatory Council has the responsibility of adjusting each
acquisition-related dollar threshold (including those for the 8(a) Program), on October 1, of each
year that is evenly divisible by five.101 The next adjustment for inflation will take place on
October 1, 2025.
Other Requirements
Other key 8(a) Program requirements include the following:
 Inability to protest an 8(a) firm’s eligibility for an award. When the SBA
makes or proposes an award to an 8(a) firm, the firm’s eligibility cannot be
challenged or protested as part of the solicitation or proposed contract award.
Instead, information concerning a firm’s eligibility must be submitted to the SBA
in accordance with separate requirements contained in Section 124.517 of Title
13 of the Code of Federal Regulations.102
Nine-year maximum participation. Firms may participate in the program for no
more than nine years from the date of their admission, although they may be
terminated or graduate from the program before nine years have passed.103
In an effort to assist small businesses adversely affected by the novel coronavirus
(COVID-19) pandemic, P.L. 116-260, the Economic Aid to Hard-Hit Small
Businesses, Nonprofits, and Venues Act (Division N, Title III of the Consolidated
Appropriations Act of 2021), provides businesses participating in the 8(a)
program on or before September 9, 2020, the option to extend their participation
in the program for one year.104
 One-time eligibility. Once a firm or a disadvantaged individual upon whom a
firm’s eligibility was based has exited the program after participating in it for any

100 48 C.F.R. §19.805-1(c).
101 13 C.F.R. §124.506 (a); and 41 U.S.C. §1980.
102 48 C.F.R. §19.805-2(d).
103 15 U.S.C. §636(j)(15) (nine-year term); 15 U.S.C. §637(a)(9) (termination and early graduation); 13 C.F.R.
§124.301 (exiting the program); 13 C.F.R. §124.302 (early graduation); and 13 C.F.R. §124.303 (termination).
H.R. 6395, the National Defense Authorization Act for Fiscal Year 2021, which has been passed by the House and
Senate, would allow firms participating in the All Small Mentor-Protégé Program on or before September 9, 2020, to
elect to extend their nine-year participation for up to an additional year.
104 The SBA has determined by rule that this “extension authority does not extend to business concerns that graduated
from or otherwise left the 8(a) BD [Business Development] program prior to March 13, 2020, or to business concerns
that were admitted to the 8(a) BD program after September 9, 2020.” Any extension under the act will be added to the
participant’s transitional stage of participation in the program. The SBA selected March 13, 2020, as the beginning date
for the eligibility for an additional year in the program because the COVID-19 pandemic was declared a national
disaster on that date. The SBA indicated that “it is SBA’s understanding that Congress extended the term of
participation in the 8(a) BD program because it believed that the pandemic adversely affected 8(a) concerns and their
ability to participate in and receive the full benefits of the program. Thus, it is reasonable to conclude that any firms
participating in the program as of the date the national disaster was declared due to the pandemic (i.e. March 13, 2020)
should receive the program term extension authorized by Congress.” Also, the extension will not apply to businesses
that were participants in the 8(a) program at any point from March 13, 2020, through September 9, 2020, but were
terminated, early graduated, or voluntarily withdrew from the program in lieu of being terminated or early graduated.
See SBA, “Extension of Participation in 8(a) Business Development Program,” 86 Federal Register 2530, January 13,
2021.
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length of time, neither the firm nor the individual is generally eligible to
participate in the program again.105 Firms are considered identical for purposes of
program eligibility when at least 50% of the assets of one firm are the same as
those of another firm.106
 Ownership limitations on family members of current or former 8(a) firm
owners. Individuals generally may not use their disadvantaged status to qualify a
firm for the program if the individual has an immediate family member who is
using, or has used, the disadvantaged status to qualify a firm for the program.107
 Award Limitations. In general, 8(a) firms may not receive additional 8(a) sole-
source awards once they have been awarded a combined total of competitive and
sole-source awards in excess of $100 million, in the case of firms whose size is
based on their number of employees, or in excess of an amount equivalent to the
lesser of (1) $100 million or (2) five times the size standard for the industry, in
the case of firms whose size is based on their revenues.108 In addition, 8(a) firms
in the transitional stage, or the last five years of participation, must achieve
annual targets for the amount of revenues they receive from non-8(a) sources.109
These targets increase over time, with firms required to attain 15% of their
revenue from non-8(a) sources in the fifth year, 25% in the sixth year, 30% in the
seventh year, 40% in the eight year, and 50% in the ninth year.110 Firms that do
not display the relevant percentages of revenue from non-8(a) sources are
ineligible for sole-source 8(a) contracts “unless and until” they correct the
situation.111
 Subcontracting Limitations. Federal subcontracting limitations require small
businesses receiving contracts under set-asides to perform work that equals
certain minimum percentages of the amount paid under the contract.112
Specifically, small businesses must generally perform at least 50% of the costs of
the contract incurred for personnel with its own employees, in the case of service
contracts; and at least 50% of the cost of manufacturing supplies or products
(excluding the cost of materials), in the case of manufacturing contracts.113

105 15 U.S.C. §636(j)(11)(B)-(C); and 13 C.F.R. §124.108(b).
106 13 C.F.R. §124.108(b)(4).
107 13 C.F.R. §124.105(g)(1). SBA may waive this prohibition if the firms have no connections in terms of ownership,
control, or contractual relationships and certain other conditions are met.
108 13 C.F.R. §124.519(a)(1)-(2). Contracts less than $100,000 are not counted in determining whether a firm has
reached the applicable limit. 13 C.F.R. §124.519(a)(3). The SBA Administrator may waive this requirement if the
procuring agency’s head determines that a sole-source award to a firm is necessary “to achieve significant interests of
the Government.” 13 C.F.R. §124.519(e). Even after firms have received a combined total of competitive and sole-
source awards in excess of $100 million, or other applicable amount, they may still receive competitive contracts under
the 8(a) Program. 13 C.F.R. §124.519(b).
109 15 U.S.C. §636(j)(10)(I)(i)-(iii); 13 C.F.R. §124.509(b)(1).
110 13 C.F.R. §124.509(b)(2); and SBA, “Extension of Participation in 8(a) Business Development Program,” 86
Federal Register 2533, January 13, 2021.
111 13 C.F.R. §124.509(d)(1). This prohibition may be waived if the Office of Business Development’s director
determines that denial of a sole-source contract would cause severe economic hardship for the firm, potentially
jeopardizing its survival, or if extenuating circumstances beyond the firm’s control caused it to miss its target. 13
C.F.R. §125.509(e).
112 15 U.S.C. §637(a)(14)(A)-(B); 15 U.S.C. §644(o); 13 C.F.R. §125.6; and 48 C.F.R. §52.219-14.
113 15 U.S.C. §657s(a)(1)&(2); and 13 C.F.R. §125.6(a)(1)-(2). There are separate provisions regarding the percentage
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Requirements for Tribally, ANC-, NHO-, and CDC-Owned Firms
Tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs) or
Community Development Corporations (CDCs) themselves generally do not participate in the
8(a) Program. Rather, businesses that are at least 51% owned by such entities participate in the
program,114 although the rules governing their participation are somewhat different from those for
the program generally.115
Program Eligibility
Small
Firms owned by Indian tribes, ANCs, NHOs, and CDCs must be deemed small under the SBA’s
size standards.116 However, certain affiliations with the owning entity or other business
enterprises of that entity are excluded in size determinations unless the SBA Administrator
determines that a small business owned by an ANC, CDC, NHO, or Indian tribe “[has] obtained,
or [is] likely to obtain, a substantial unfair competitive advantage within an industry category”
because of such exclusions.117 Other affiliations of small businesses owned by ANCs, CDCs,
NHOs, and Indian tribes may be included in size determinations, and ANC-owned firms, in
particular, have been subjected to early graduation from the 8(a) Program because they exceeded
size standards.118
Business
Firms owned by ANCs, CDCs, NHOs, and Indian tribes must be “businesses” under the SBA’s
definition.119 Although ANCs themselves may be for-profit or nonprofit, ANC-owned businesses
must be for-profit to participate in the program.120

of work to be performed under construction contracts. See generally 13 C.F.R. §125.6(a)(3)-(4).
114 13 C.F.R. §124.109(c)(3)(i) (tribally and ANC-owned firms); 13 C.F.R. §124.110 (b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
115 13 C.F.R. §§124.109-124.111.
116 13 C.F.R. §124.109(c)(2) (tribally and ANC-owned firms); 13 C.F.R. §124.110(b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
117 13 C.F.R. §124.109(c)(2)(iii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
118 See Valenzuela Eng’g, Inc. & Curry Contracting Co., Inc., SBA-4151 (1996) (rejecting a challenge to the size of an
ANC-owned firm because its subcontractor performed less than 25% of the work on the contract and was not its
affiliate); and U.S. Government Accountability Office (GAO), Increased Used of Alaska Native Corporations’ Special
8(a) Provisions Calls for Tailored Oversight, GAO-06-399, April 27, 2006, p. 29, at http://www.gao.gov/new.items/
d06399.pdf (describing “early graduation” of ANC-owned 8(a) firms).
119 13 C.F.R. §124.109(a) and (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with the special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
120 13 C.F.R. §124.109(a)(3).
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Unconditionally Owned and Controlled
Firms owned by ANCs, CDCs, NHOs, or Indian tribes must be unconditionally owned and
substantially controlled by the ANC, CDC, NHO, or Indian tribe, respectively.121 However, under
SBA regulations, tribally or ANC-owned firms may be managed by individuals who are not
members of the tribe or Alaska Natives if the firm can demonstrate:
that the Tribe [or ANC] can hire and fire those individuals, that it will retain control of all
management decisions common to boards of directors, including strategic planning, budget
approval, and the employment and compensation of officers, and that a written
management development plan exists which shows how Tribal members will develop
managerial skills sufficient to manage the concern or similar Tribally-owned concerns in
the future.122
NHO-owned firms must demonstrate that the NHO controls the board of directors.123 However,
the individual who is responsible for the NHO-owned firm’s day-to-day management need not
establish personal social and economic disadvantage.124 CDCs are to be managed and have their
daily operations conducted by individuals with “managerial experience of an extent and
complexity needed to run the [firm].”125
Socially Disadvantaged
As owners of prospective or current 8(a) firms, Indian tribes, ANCs, NHOs, and CDCs are all
presumed to be socially disadvantaged.126
Economically Disadvantaged
By statute, ANCs are deemed to be economically disadvantaged, and CDCs are similarly treated
as economically disadvantaged.127 In contrast, Indian tribes and NHOs must establish economic
disadvantage. Indian tribes must present data on, among other things, the number of tribe

121 13 C.F.R. §124.109(a) and (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with the special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
122 13 C.F.R. §124.109(c)(4)(B).
123 13 C.F.R. §124.110(d).
124 13 C.F.R. §124.110(d).
125 13 C.F.R. §124.111(b).
126 13 C.F.R. §124.109(b)(1) (tribally and ANC-owned firms); 15 U.S.C. §637(a)(4)(A)(i)(II) (NHO-owned firms); 13
C.F.R. §124.110(a) (same); 13 C.F.R. §124.111(a) (CDC-owned firms); and Small Disadvantaged Business
Certification Application: Community Development Corporation (CDC) Owned Concern, OMB Approval No. 3245-
0317 (“A Community Development Corporation (CDC) is considered to be a socially and economically disadvantaged
entity if the parent CDC is a nonprofit organization responsible to residents of the area it serves which has received
financial assistance under 42 U.S.C. 9805, et seq.”). The SBA’s authority to designate CDCs as socially and
economically disadvantaged derives from Section 9815(a)(2) of Title 42 of the United States Code, which required
SBA to “promulgate regulations to ensure the availability to community development corporations of such programs as
shall further the purposes of this subchapter, including programs under §637(a) of title 15.”
127 43 U.S.C. §1626(e)(1) (“For all purposes of Federal law, a Native Corporation shall be considered to be a
corporation owned and controlled by Natives and a minority and economically disadvantaged business enterprise if the
Settlement Common Stock of the corporation and other stock of the corporation held by holders of Settlement Common
Stock and by Natives and descendants of Natives, represents a majority of both the total equity of the corporation and
the total voting power of the corporation for the purposes of electing directors.”); 13 C.F.R. §124.109(a)(2) (similar);
and 13 C.F.R. §124.111(a).
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members; the tribe members’ unemployment rate and per capita income; the percentage of the
local Indian population above the poverty level; the tribe’s access to capital and assets as
disclosed in current financial statements; and all businesses wholly or partially owned by tribal
enterprises or affiliates, as well as their primary industry classification.128 Effective August 24,
2016, NHOs establish economic disadvantage in the same manner as Indian tribes.129 Prior to this
revision, the SBA considered “the individual economic status of NHO’s members,” the majority
of whom had to qualify as economically disadvantaged, under the same standards as individual
applicants to the program.130
Once a tribe or NHO has established that it is economically disadvantaged for purposes of one
8(a) business, it need not reestablish economic disadvantage in order to have other businesses
certified for the program unless the Director of the Office of Business Development requires it to
do so.131
Good Character
The SBA’s regulations governing tribally and ANC-owned 8(a) firms explicitly state that the
good character requirement applies only to officers or directors of the firm, or shareholders
owning more than a 20% interest.132 NHO-owned firms may be subject to the same requirements
in practice.133 With CDC-owned firms, the firm itself and “all of its principals” must have good
character.134
Demonstrated Potential for Success
Firms owned by ANCs, CDCs, NHOs, and Indian tribes may provide evidence of potential for
success in several ways:
1. The firm has been in business for at least two years, as shown by individual or
consolidated income tax returns for each of the two previous tax years showing
operating revenues in the primary industry in which the firm seeks certification.
2. The individuals who will manage and control the firm’s daily operations have
substantial technical and management experience; the firm has a record of
successful performance on government or other contracts in its primary industry
category; and the firm has adequate capital to sustain its operations and carry out
its business plan.

128 15 U.S.C. §637(a)(6)(A); and 13 C.F.R. §124.109(b)(2)(i)-(vii).
129 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48571, July 25, 2016.
130 13 C.F.R. §124.110(c)(1). Specifically, for the first 8(a) applicant owned by a particular NHO, individual NHO
members had to meet the same initial eligibility economic disadvantage thresholds as individually-owned 8(a)
applicants. For any additional 8(a) applicant owned by the NHO, individual NHO members had to meet the economic
disadvantage thresholds for continued 8(a) eligibility. If the NHO had no members, then a majority of the members of
the board of directors had to qualify as economically disadvantaged.
131 13 C.F.R. §124.109(b).
132 13 C.F.R. §124.109(c)(7)(ii).
133 The regulations as to NHOs do not appear to address “good character.” However, in practice, when this has
happened in the past, NHO-owned firms have often been treated the same as firms owned by Indian tribes.
134 13 C.F.R. §124.111(g).
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3. The owner-group has made a firm written commitment to support the firm’s
operations and has the financial ability to do so.135
The first of these ways for demonstrating potential for success is the same for individually owned
firms, and the second arguably corresponds to the circumstances in which the SBA may waive the
requirement that individually owned firms have been in business for at least two years.136 There is
no equivalent to the third way for individually owned firms, and some commentators have
suggested that this provision could “benefit ANCs [and other owner groups] by allowing more
expeditious and effortless access to 8(a) contracts for new concerns without having to staff new
subsidiaries with experienced management.”137
Report of Benefits for Firms Owned By ANCs, Indian Tribes, NHOs, and CDCs
8(a) firms owned by ANCs, CDCs, NHOs, and Indian tribes must submit information with its
annual financial statement to the SBA showing
how the Tribe, ANC, NHO or CDC has provided benefits to the Tribal or native members
and/or the Tribal, native or other community due to the Tribe’s/ANC’s/NHO’s/CDC’s
participation in the 8(a) … program through one or more firms. This data includes
information relating to funding cultural programs, employment assistance, jobs,
scholarships, internships, subsistence activities, and other services provided by the Tribe,
ANC, NHO or CDC to the affected community.138
Set-Asides and Sole-Source Awards
Similar to other participants, firms owned by ANCs, CDCs, NHOs, and Indian tribes are eligible
for 8(a) set-asides and may receive sole-source awards valued at less than $4.5 million ($7.5
million for manufacturing contracts). However, firms owned by ANCs and Indian tribes can also

135 13 C.F.R. §124.109(c)(6)(i)-(iii) (ANC- and tribally-owned firms); 13 C.F.R. §124.110(g)(1)-(3) (NHO-owned
firms); and 13 C.F.R. §124.111(f)(1)-(3) (CDC-owned firms).
136 13 C.F.R. §124.107; and 13 C.F.R. §124.107(b)(1)(i)-(v).
137 Daniel K. Oakes, “Inching Toward Balance: Reaching Proper Reform of the Alaska Native Corporations’ 8(a)
Contracting Preferences,” 40 Public Contract Law Journal 777 (2011).
138 13 C.F.R. §124.604. SBA regulations promulgated in February 2011 provided that this reporting requirement would
be effective “as of September 9, 2011, unless SBA further delays implementation through a Notice in the Federal
Register.” SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations: Final Rule,” 76 Federal Register 8222-8264 (February 11, 2011). The SBA subsequently delayed the
reporting requirement through at least five such notices. See SBA, “8(a) Business Development Program Regulations;
Tribal Consultations,” 76 Federal Register 12273, 12274 (March 7, 2011); SBA, “8(a) Business Development Program
Regulations; Tribal Consultations,” 76 Federal Register 27859, 27860 (May 13, 2011); SBA, “Data Collection
Available for Public Comments and Recommendations: 60 Day Notice and Request for Comments,” 76 Federal
Register 63983, 63984 (October 14, 2011); SBA, “Data Collection Available for Public Comments and
Recommendations: 60 Day Notice and Request for Comments,” 77 Federal Register 73509, 73510 (December 10,
2012); and SBA, “Data Collection Available for Public Comments and Recommendations; Notice: Extension of
Comment Period for New 8(a) Business Development Program Reporting Requirements,” 78 Federal Register 9447
(February 8, 2013). GAO reports that until 2016 compliance with this reporting requirement varied because the SBA
did not have an OMB-approved standard form to collect the data. In 2011, the SBA developed a seven page form, but
after receiving comments that the form was too burdensome it was not adopted. After consultations with OMB, ANCs,
and other groups, in June 2015, the SBA proposed a new one-page form. OMB approved the form on March 3, 2016.
See SBA, “Data Collection Available for Public Comments: 60 Day Notice and Request for Comments,” 80 Federal
Register 31444, 31445 (June 2, 2015); SBA, “Reporting and Recordkeeping Requirements Under OMB Review: 30
Day Notice,” 80 Federal Register 73035, 73036 (November 23, 2015); and GAO, Alaska Native Corporations:
Oversight Weaknesses Continue to Limit SBA’s Ability to Monitor Compliance with 8(a) Program Requirements,
GAO-16-113, March 21, 2016, p. 36, at http://www.gao.gov/assets/680/675905.pdf.
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receive sole-source awards in excess of $4.5 million ($7.5 million for manufacturing contracts)
even when contracting officers reasonably expect that at least two eligible and responsible 8(a)
firms will submit offers and the award can be made at fair market price.139 NHO-owned firms
may receive sole-source awards from the Department of Defense under the same conditions.140
Other Requirements
Firms owned by ANCs, CDCs, NHOs, and Indian tribes are governed by the same regulations as
other 8(a) firms in which certain of the “other requirements” are involved, including (1) inability
to protest an 8(a) firm’s eligibility for an award;141 (2) maximum of nine years in the program (for
individual firms);142 and (3) limits on subcontracting.143 However, requirements for such firms
differ somewhat from those for other 8(a) firms, including the one-time eligibility for the 8(a)
Program; limits on majority ownership of 8(a) firms; and limits on the amount of 8(a) contracts
that a firm may receive. Firms owned by ANCs, CDCs, NHOs, and Indian tribes may participate
in the 8(a) Program only one time.144 However, unlike the disadvantaged individuals upon whom
other firms’ eligibility for the 8(a) Program is based, ANCs, CDCs, NHOs, and Indian tribes may
confer program eligibility upon firms on multiple occasions and for an indefinite period.145 In
addition, ANCs, CDCs, NHOs, and Indian tribes may not own 51% or more of another firm that
“either at the time of application or within the previous two years,” obtains the majority of its
revenue from the same “primary” industry as the applicant. However, there are no limits on the
number of firms they may own that operate in other primary industries.146 Moreover, ANCs,
CDCs, NHOs, and Indian tribes may own multiple firms that earn less than 50% of their revenue
in the same “secondary” industries.147 Finally, firms owned by ANCs, CDCs, NHOs, and Indian

139 P.L. 100-656, §602(a), 102 Stat. 3887-88 (November 15, 1988) (codified at 15 U.S.C. §637 note); and 48 C.F.R.
§19.805-1(b)(2).
140 DOD’s authority to make sole-source awards to NHO-owned firms of contracts valued at more than $4.5 million
($7.5 million for manufacturing contracts) even if contracting officers reasonably expect that offers will be received
from at least two responsible small businesses existed on a temporary basis in 2004-2006 and became permanent in
2006. See P.L. 109-148, Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in
the Gulf of Mexico, and Pandemic Influenza Act of 2006, §8020, 119 Stat. 2702-03 (December 30, 2005) (“[Provided]
[t]hat, during the current fiscal year and hereafter, businesses certified as 8(a) by the Small Business Administration
pursuant to section 8(a)(15) of Public Law 85-536, as amended, shall have the same status as other program
participants under section 602 of P.L. 100-656 ... for purposes of contracting with agencies of the Department of
Defense.”); 48 C.F.R. §219.805-1(b)(2)(A)-(B).
141 48 C.F.R. §19.805-2(d).
142 13 C.F.R. §124.109(a) & (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
143 15 U.S.C. §644(o); 15 U.S.C. §657s; 13 C.F.R. §125.6; and 48 C.F.R. §52.219-14.
144 13 C.F.R. §124.109(a) & (b) (ANC- and tribally-owned firms); 13 C.F.R. §124.110(a) (NHO-owned firms); and 13
C.F.R. §124.111(a) (CDC-owned firms).
145 15 U.S.C. §636(j)(11)(B)-(C).
146 13 C.F.R. §124.109(c)(3)(ii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(e) (NHO-owned firms); and 13
C.F.R. §124.111(d) (CDC-owned firms). These regulations also provide that an 8(a) firm owned by an ANC, CDC,
NHO, or Indian tribe may not, within its first two years in the 8(a) Program, receive a sole-source contract that is a
follow-on to an 8(a) contract currently performed by an 8(a) firm owned by that entity, or previously performed by an
8(a) firm owned by that entity that left the program within the past two years. In addition, there are restrictions on the
percentage of work that may be performed by any non-8(a) venturer(s) in joint ventures involving 8(a) firms. See
generally 13 C.F.R. §124.513.
147 13 C.F.R. §124.109(c)(3)(ii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(e) (NHO-owned firms); 13
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tribes may continue to receive additional sole-source awards even after they have received a
combined total of competitive and sole-source 8(a) contracts in excess of the dollar amount set
forth in Section 124.519 of Title 13 of the Code of Federal Regulations. Individually owned firms
may not exceed this threshold.148 However, firms owned by any of these four types of entities are
subject to the same requirements regarding the percentages of revenue received from non-8(a)
sources at various stages of their participation in the program as other 8(a) firms.149
Organizational Structure
The SBA’s Office of Business Development (BD), housed within the Office of Government
Contracts and Business Development, oversees the 8(a) Program. BD has three offices: the Office
of Certification and Eligibility (OCE), the Office of Management and Technical Assistance
(OMTA); and the Office of Program Review (OPR). Their functions are provided in the footnote
below.150
Applications for the 8(a) Program are processed at one of two central office duty stations
(CODS), one located in San Francisco, CA, and the other in Philadelphia, PA.151 Applicants apply
to the CODS that serve the territory where the applicant’s principal place of business is located.

C.F.R. §124.111(d) (CDC-owned firms).
148 13 C.F.R. §124.519(a).
149 13 C.F.R. §124.509.
150 The Office of Certification and Eligibility (OCE) provides program participants recommendations concerning initial
and continuing program eligibility. OCE’s functions include, but are not limited to, analyzing and processing: (1)
applications for initial program participation, (2) requests for reconsideration of decisions declining initial program
applications; (3) requests to graduate early or to terminate, voluntarily withdraw, or suspend program participation; (4)
changes of ownership, business structure, business name, and/or management; (5) annual continuing eligibility review
issues; and (6) general questions concerning eligibility and application processes. OCE also provides technical
assistance and support to SBA district offices (DOs) regarding outreach to potential program participants, eligibility
issues, and waivers for outside employment.
The Office of Management and Technical Assistance (OMTA) administers most of the services that are not provided
by DOs and reviews certain actions recommended by DOs. These services include (1) servicing sole-source,
competitive, and multiple-award contracts; (2) analyzing and processing termination waivers, requests for competition
below the competitive thresholds, requests for sole source above the thresholds, requests for waivers of sole source
prohibition, bona fide office determinations, and mentor/protégé applications and reconsiderations; (3) subcontracting
assistance; (4) overseeing and coordinating 7(j) technical and management training assistance; (5) overseeing and
executing national and local seminars, conferences, and other similar activities; (6) outreach to prime contractors,
federal agencies, and the 8(a) program community; (7) reciprocating with other certification entities; and (8)
promoting, training, and assisting the DOs with their overall program objectives and initiatives.
The Office of Program Review (OPR) supports both 8(a) headquarters and field office staff by (1) evaluating and
responding to external program reviews that may be conducted by the SBA’s Office of Inspector General (OIG), Office
of Government Contracting (for agency surveillance reviews), Office of Field Operations (for SBA DO reviews), and
the U.S. Government Accountability Office (GAO); (2) responding to agency controlled correspondence from the
public and congressional offices, Freedom of Information Act requests from the public, and clearance requests from
other SBA offices; (3) gaining approval of agency partnership agreements and providing training for buying activities;
(4) creating marketing products and updating the 8(a) program web page; (5) managing all activities associated with the
surplus property program; (6) maintaining program data on firm participation; and (7) preparing the annual report to
Congress on program participation and contracting.
See SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, pp. 29-31, at https://www.sba.gov/sites/default/files/sops/
SOP_80_05_5_.pdf.
151 The San Francisco, California CODS screens and processes all applications submitted by Alaska Native
Corporations (ANCs), regardless of where the concern is located.
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Business Opportunity Specialists (BOSs) work directly with 8(a) firms in district offices under
the general supervision of the SBA’s Office of Field Operations (OFO). Although BOSs report to
the SBA’s OFO, they interact extensively with BD, which is located in the SBA’s headquarters
building in Washington, DC. As will be discussed, GAO and others have argued that this
overlapping organizational structure may “create programmatic challenges.”152
The Application Process
Prior to applying for certification, firms must complete all requirements for contracting with the
federal government (e.g., get a free D-U-N-S number—a unique nine-digit identification number
of each physical business location from Dun and Bradstreet; obtain a free tax identification
number or employer identification number from the Internal Revenue Service; create a profile in
the federal System for Award Management, and get a free SBA general login system user ID).153
The SBA’s district office staff generally encourage potential 8(a) Program applicants “to attend
an information session to obtain information regarding the program and its eligibility criteria
prior to filing an application … [and] also refer the applicant to SBA’s website for forms, specific
eligibility criteria, pertinent regulatory sections in the Code of Federal Regulations, and overall
information on the program.”154
In an attempt to encourage more applicants, the SBA revised and streamlined the 8(a) Program’s
application process in 2016 by accepting online applications only (hard copy applications are no
longer accepted) and eliminating the requirement for a wet signature application; a completed
IRS Form 4506T, Request for Copy or Transcript of Tax Form, in every case; and narrative
statements in support of the applicants’ claims of economic disadvantage. That determination is
now based solely on an analysis of objective financial data relating to the individual’s net worth,
income and total assets.155 In addition, to prevent what it viewed as unnecessary delays for minor
infractions that may have “occurred many years ago” and may have “nothing to do with the
individual’s business integrity,” the SBA made optional the automatic suspension of consideration
and referral to the SBA OIG of all applications with adverse information regarding the applicant’s
or any of its principals’ possible criminal conduct.156
Despite these changes, applicants still have a relatively long list of supporting documents (and
required SBA Forms)157 that they must submit, including the following:
 Signed and dated federal income tax returns for the firm and all individuals that
either own more than 10% of the firm or have a key position in the firm for the

152 GAO, Small Business Administration: Leadership Attention Needed to Overcome Management Challenges, GAO-
15-347, September 22, 2015, p. 59, at http://www.gao.gov/assets/680/672648.pdf.
153 SBA, “Steps to Applying to the 8(a) Program,” at https://www.sba.gov/contracting/government-contracting-
programs/8a-business-development-program/how-apply. D-U-N-S is the data universal number system that businesses
are required to register with the federal government when competing for contracts or grants.
154 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, p. 35, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
155 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48569, July 25, 2016.
156 SBA, “Small Business Mentor Protégé Program,” p. 48570.
157 Firms must submit SBA Form 1010, 8(a) Business Development (BD) Program Application along with supporting
documentation. Individuals must submit SBA Form 1010-IND, Individual Information; SBA Form 912, Statement of
Personal History; any individual who responds ‘Yes’ to questions 7, 8 or 9 on the SBA Form 912 must submit a
completed SBA Fingerprint Card (FD 258, Fingerprint Card); and SBA Form 413, Personal Financial Statement. See
SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,” SOP
80 05 5, effective September 23, 2016, pp. 37-39, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
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past three years preceding the date of application (including all forms,
statements, schedules and attachments).
 The firm’s financial statements, balance sheet, and profit and loss statements for
the past three years (including the most recent balance sheet, current within 90
days of application).
 A completed personal financial statement form (from all principals and their
spouses), including a list of all assets, liabilities, real estate and other personal
property, including transferred assets, information on delinquent federal
obligations, past due taxes or liens, bankruptcy filings and pending civil lawsuits,
and a list of any SBA loans for the firm and other businesses owned by the
principal(s).
 A list or chart of the firm’s current and past federal and nonfederal contracts
within the most recently completed fiscal year.
 A list of any lease agreements.
 Proof of signature authority on the firm’s bank account(s) (i.e., signature card(s)
for firm bank account(s) or letter from the bank).
 Documented proof of contributions: (1) used to acquire ownership (for each
owner), (2) of any transfer of assets to or from the firm, and (3) of any transfer of
assets to or from any of the firm’s owners over the past two years.
 State filings (signed, dated and stamped by the state where the firm does
business) and certificate of good standing.158
 List of any foreign corporation filings.
 Articles of incorporation, articles of organization, any DBA (“doing business as”)
filings, governing documents signed by the principals, bylaws, operating
agreements, partnership agreements, and meeting minutes.
 Any stock certificates and ledgers.
 Proof of social disadvantage from majority owners and firm managers.
 Background information and personal information from all principals, including
a resume, a completed Statement of Personal History form, proof of U.S.
citizenship or naturalization, duties within the firm and time devotion, a list of
other business interests and time devotion, and the nature of outside employment
and time devotion.159
 Documentation addressing how the firm meets specified objectives, if it is
applying for a two-year waiver.160

158 A certificate of good standing is issued by the Secretary of State’s Office evidencing that a business has complied
with the applicable provisions of the laws of the state, is in good standing, and authorized to transact business or to
conduct affairs within the state.
159 Principals include owner(s) of more than 10%, officers, directors, members, partners, and key employees.
160 The specified objectives are “substantial demonstration of business management experience; demonstrated technical
expertise to carry out its business plan; adequate capital; record of successful performance on contracts (including
copies of contracts that will reflect the different sizes the firm can handle); and ability to obtain the personnel, facilities,
equipment, and any other requirements to perform on contracts. Applicants seeking this waiver must also provide a list
of the different services/products provided by the firm; billing invoices and bank statements reflecting deposit of
receipts; and letters of reference from the firm’s clients.” See SBA, “8(a) Application Checklist,” at
https://sbaone.atlassian.net/wiki/spaces/CKB/pages/96370728/8+a+Initial+Application+Document+Checklist.
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As mentioned, applications are processed at the San Francisco or Philadelphia CODS. In general,
the SBA processes an application and issues a decision letter within 90 days of the receipt of an
application package. The processing time will be suspended only if an applicant is referred to the
SBA OIG, for a formal size determination, or both.161
Applicants are notified within 15 days of receipt whether the application package is complete or
incomplete. The SBA will not process an incomplete application.162 Complete means that the
application is ready to be processed.
A BOS, at one of the CODS, initially reviews the application. If, during the eligibility review
process, it is determined that an application is incomplete, the BOS may request additional
information or clarification “via a delivery method that tracks delivery and provides return receipt
capability.”163 The applicant must provide the requested information within five calendar days of
receipt of the request. Failure to meet the deadline may result in the applicant’s ineligibility to
participate in the program. However, a request for additional information does not stop the 90-day
processing clock. “Once the requested information is provided, the case may require priority
handling in order for the CODS to complete the eligibility review within the required
timeframe.”164
After the initial review, the BOS submits the case file, the BOS analysis, and a decision letter to
the CODS’ chief for review. The chief examines the BOS analysis and decision letter to verify
that all required steps and regulations have been properly applied. Upon completing the
examination, the chief returns the case file and attachments to the BOS along with any applicable
comments and recommendations.165
The BOS then makes any changes or corrections to the analysis or decision letter as requested by
the chief. The chief then signs and returns the case file to the processing BOS. The chief makes
his or her recommendation in the electronic application system (which is equivalent to
transmitting it to the OCE’s director, who approves or declines the application largely based on
the CODS’ review).166
After the OCE review, the associate administrator for Business Development (AA/BD) ultimately
approves or declines the application in writing.167 The electronic application system notifies the
firm by issuing an approval or declination letter. All declination letters must clearly explain the
reason(s) why the firm was found to be ineligible, including a direct reference to regulatory
provisions that the applicant failed to satisfy. The letter must also include the applicant’s right to

161 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, p. 73, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf;
and 13 C.F.R. §124.204(a).
162 13 C.F.R. §124.204(a).
163 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, p. 73, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
164 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, p. 73.
165 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, p. 75.
166 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, p. 75.
167 13 C.F.R. §124.204(f).
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request reconsideration and, if applicable, to appeal the decision to the SBA’s Office of Hearings
and Appeals.168
As discussed below in the “Current Issues” section, the SBA and others have identified the
application process, and its relatively high rate of rejection, as an impediment to the 8(a)
Program’s growth.
Business Opportunity Specialists and Reporting
Requirements
BOSs assist both prospective and existing 8(a) firms with questions related to the application
process, required forms, and the program’s various eligibility, reporting, and performance
requirements. BOSs also provide general business development assistance, assist with the firm’s
planning and establishment of goals, work with the firm as it develops and submits its required
business plan, and ensure that the firm is on track regarding anticipated business growth.169 BOSs
“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.”170 As directed, BOSs accomplish this by (1) helping the firm
identify its strengths and weaknesses; (2) providing advice, counsel, and guidance in the areas of
marketing to the federal government, prime contracting, and contract administration; (3) referring
the firm to appropriate internal and external resources for assistance in technical, management,
and financial matters; and (4) monitoring the firm’s progress in the program and its compliance
with program requirements.171
8(a) firms must demonstrate program compliance by reporting specific information to the SBA on
an as needed, periodic, or requested basis. Much of the reporting is accomplished through the
required annual review, which focuses on the firm and its business development, and the
continuing eligibility review.172

168 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, p. 74, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf;
SBA, Office of Inspector General, “SBA’s 8(a) Business Development Program Eligibility,” Audit Report, Number 16-
13, April 7, 2016, p. 2, at https://www.sba.gov/sites/default/files/oig/16-
13_SBAs_8a_Business_Development_Program_Eligibility.pdf; 13 C.F.R. §124.205; and 13 C.F.R. §124.206.
169 SBA, Office of Government Contracting and Business Development, “Supplemental Workbook, May 2013, Module
3 Winning Contracts Pre-8(a) Business Development Program Training Series,” at https://www.sba.gov/content/pre-8a-
business-development-program-training-series.
170 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, pp. 131, 132, at https://www.sba.gov/sites/default/files/sops/
SOP_80_05_5_.pdf.
171 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, p. 132.
172 SBA, Office of Government Contracting and Business Development, “Pre-8(a) Business Development Program
Module 4—Business Planning and Operational Management, transcript,” February 2015, p. 9, at https://www.sba.gov/
sites/default/files/Pre8a_module4_transcript.pdf; and SBA, Office of Business Development, Standard Operating
Procedure for the Office of Business Development,” SOP 80 05 5, effective September 23, 2016, p. 212, at
https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf. …Continuing eligibility reviews are conducted by the
District Office and OCE. …OCE conducts continuing eligibility review on 8(a) Participant firms that are considered
high risk/complex and those that are requested from the field staff. See SBA, Office of Business Development,
“Standard Operating Procedure for the Office of Business Development,” SOP 80 05 5, effective September 23, 2016,
p. 212, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
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The annual review requires numerous forms and documentation, including the following:
 Form 1450—8(a) Annual Update Review (information about the firm, including
its tenure in the program, current financial data, business development targets,
loans and other sources of capital, and applicable bonding information);
 Form 1623—Certification Regarding Debarment, Suspension, and Other
Responsibility Matters Primary Covered Transactions (detailed information
regarding any debarments, suspensions, or other potentially adverse matters);
 Form 1790—Representatives Used and Compensation Paid for Services in
Connection with Obtaining Federal Contracts (required semiannually, includes a
list of any agents, representatives, accountants, consultants, etc. that receive fees,
commissions, or compensation of any kind to assist the firm in obtaining or
seeking federal contracts);
 Form 912—Statement of Personal History (information related to claiming
disadvantaged status for all officers, directors, general partners, managing
members, and holders of more than 10% ownership in the firm); and
 Form 413—Personal Financial Statement (information concerning the owner’s
and their spouse’s personal net worth).173
8(a) firms are also required to provide any updates or modifications to their business plan.174 If
the firm participates in the All Small Mentor-Protégé Program (see below) it must provide “a
narrative report detailing the contracts it has had with its mentor and benefits it has received from
the mentor/protégé relationship.”175 In addition, the firm must provide a report for each 8(a)
contract performed during the year “explaining how the performance of work requirements are
being met for the contract, including any 8(a) contracts performed as a joint venture.”176
In 2010, GAO reported that the district staff’s “dual role of advocacy for and monitoring of the
firms may have contributed in part to the retention of ineligible firms.”177 In response, in 2012,
the SBA shifted responsibility for processing the continued eligibility portion of the required
annual review from BOSs located in the SBA district offices to its Washington, DC, office. While
BOSs continue to perform other components of the annual review, “shifting the responsibility for
processing continued eligibility to headquarters was designed to eliminate conflict of interest for
district offices associated with performing both assistance and oversight roles.”178

173 SBA, Office of Government Contracting and Business Development, “Pre-8(a) Business Development Program
Module 4—Business Planning and Operational Management, transcript,” February 2015, pp. 9, 10, at
https://www.sba.gov/sites/default/files/Pre8a_module4_transcript.pdf.
174 SBA, Office of Government Contracting and Business Development, “Pre-8(a) Business Development Program
Module 4—Business Planning and Operational Management, transcript,” p. 10.
175 13 C.F.R. §124.112(b)(6).
176 13 C.F.R. §124.112(b)(8).
177 GAO, Small Business Administration: Steps Have Been Taken to Improve Administration of the 8(a) Program, but
Key Controls for Continued Eligibility Need Strengthening, GAO-10-353, March 30, 2010, pp. 9, 10, 26, at
http://www.gao.gov/assets/310/302582.pdf.
178 GAO, Small Business Administration: Leadership Attention Needed to Overcome Management Challenges, GAO-
15-347, September 22, 2015, p. 63, at http://www.gao.gov/assets/680/672648.pdf. …a. Upon completion of the
analysis, the District Office BOS will forward the completed annual review to the District Director through the
Assistant District Director for final disposition; b. After the review of the District Office BOS recommendation, the
District Director must then enter his/her recommendation in the 8(a) electronic tracking system to complete the Annual
Review reporting. …The District Office will send a letter to the 8(a) Participant notifying the firm that their annual
review is complete and that the Participant continues to be eligible to participate in the 8(a) BD Program. See SBA,
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8(a) firms may leave the program by any of the following means:
 voluntary withdrawal;
 voluntary early graduation (where the firm voluntarily decides to leave the
program after the SBA has determined that the firm has substantially achieved its
business plan’s targets, objectives, and goals and has demonstrated the ability to
compete in the marketplace without program assistance);
 involuntary early graduation (where the SBA requires a firm to leave the program
because it has determined that the firm has substantially achieved its business
plan’s targets, objectives, and goals and has demonstrated the ability to compete
in the marketplace without program assistance; or one or more of the
disadvantaged owners upon whom the firm’s eligibility is based are no longer
economically disadvantaged);179
 termination for good cause;180
 expiration of the program term (maximum of nine years) without meeting the
SBA’s graduation requirements;181 or
 graduation at the expiration of the program term.

Office of Business Development, Standard Operating Procedure for the Office of Business Development,” SOP 80 05
5, effective September 23, 2016, p. 200, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
179 13 C.F. R. §124.302. “In determining whether a Participant has substantially achieved the targets, objectives and
goals of its business plan and in assessing the overall competitive strength and viability of a Participant, SBA considers
the totality of circumstances, including the following factors: (1) Degree of sustained profitability; (2) Sales trends,
including improved ratio of non-8(a) sales to 8(a) sales since program entry; (3) Business net worth, financial ratios,
working capital, capitalization, and access to credit and capital; (4) Current ability to obtain bonding; (5) A comparison
of the Participant’s business and financial profiles with profiles of non-8(a) BD businesses having the same primary
four-digit SIC code as the Participant; (6) Strength of management experience, capability, and expertise; and (7) Ability
to operate successfully without 8(a) contracts.” See 13 C.F. R. §124.302(b).
180 Examples of termination for good cause include submission of false information in the firm’s application materials;
failure to maintain eligibility for program participation; failure, for any reason, to maintain ownership, full-time day-to-
day management, and control by disadvantaged individuals; failure to obtain prior written approval from the SBA for
any changes in ownership or business structure, management or control; failure to disclose the extent to which
nondisadvantaged persons or firms participate in the firm’s management; failure by the concern or one or more of the
concern’s principals to maintain good character; failure to provide required financial statements, requested tax returns,
reports, updated business plans, information requested by the SBA’s Office of Inspector General, or other requested
information or data within 30 days of the request; cessation of business operations; failure to pursue competitive and
commercial business in accordance with its business plan, or failure in other ways to make reasonable efforts to
develop and achieve competitive viability; a pattern of inadequate performance of awarded Section 8(a) contracts;
failure to pay or repay significant financial obligations owed to the federal government; failure to obtain and keep
current any and all required permits, licenses, and charters needed to operate the business; excessive withdrawals that
are detrimental to the achievement of the targets, objectives, and goals contained in the participant’s business plan;
unauthorized use of SBA direct or guaranteed loan proceeds or violation of an SBA loan agreement; submission by or
on behalf of a participant of false information to the SBA; debarment, suspension, voluntary exclusion, or ineligibility
of the concern or its principals pursuant to 2 C.F.R. parts 180 and 2700 or FAR subpart 9.4 (48 C.F.R. part 9, subpart
9.4); conduct by the concern, or any of its principals, indicating a lack of business integrity; willful failure to comply
with applicable labor standards and obligations; material breach of any terms and conditions of the 8(a) participation
agreement; willful violation by a concern, or any of its principals, of any SBA regulation pertaining to material issues.
See 13 C.F.R. 124.303(a)(1-20) and (b).
181 13 C.F. R. §124.2.
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7(j) Management and Technical Assistance Program
The SBA’s 7(j) Management and Technical Assistance Program assists 8(a) firms by providing
management and technical assistance training. The program’s origin dates back to 1970 when the
SBA issued regulations creating the 8(a) contracting program to “assist small concerns owned by
disadvantaged persons to become self-sufficient, viable businesses capable of competing
effectively in the market place.”182 Using its statutory authority under Section 7(j) of the Small
Business Act to provide management and technical assistance through contracts, grants, and
cooperative agreements to qualified service providers, the regulations specified that “the SBA
may provide technical and management assistance to assist in the performance of the
subcontracts.”183
On October 24, 1978, P.L. 95-507, To amend the Small Business Act and the Small Business
Investment Act of 1958, provided the SBA explicit statutory authority to extend financial,
management, technical, and other services to socially and economically disadvantaged small
businesses. The SBA’s current regulations indicate that the 7(j) Management and Technical
Assistance Program will, “through its private sector service providers [deliver] a wide variety of
management and technical assistance to eligible individuals or concerns to meet their specific
needs, including: (a) counseling and training in the areas of financing, management, accounting,
bookkeeping, marketing, and operation of small business concerns; and (b) the identification and
development of new business opportunities.”184 Eligible individuals and businesses include “8(a)
certified firms, small disadvantaged businesses, businesses operating in areas of high
unemployment or low income, or small businesses owned by low income individuals.”185
As shown in Table 2, 9,941 small businesses received 7(j) program assistance in FY2020. The
SBA has been marketing the 7(j) program to 8(a) firms in an effort increase awareness of the
program, to help those small businesses “better prepare themselves for federal contracting
opportunities,” and to retain 8(a) firms in the 8(a) program.186
Table 2 also shows the amount of total administrative resources the SBA provides the 7(j)
program each year.
Table 2. 7(j) Management and Technical Assistance Program Statistics,
FY2010-FY2020
Actual Total Administrative Resources
Fiscal Year
Number of Small Businesses Assisted
(Program Cost; $ in millions)
2020
9,941
$5.139
2019
8,032
$4.591
2018
6,483
$4.098

182 13 C.F.R. §124.8-1(b) (1970); and Notes, “Minority Enterprise, Federal Contracting, and the SBA’s 8(a) Program:
A New Approach to an Old Problem,” Michigan Law Review, vol. 71, no. 2 (December 1972), pp. 377, 378.
183 13 C.F.R. §124.8-1(d) (1970).
184 13 C.F.R. §124.702.
185 SBA, FY2017 Congressional Budget Justification and FY2015 Annual Performance Report, p. 50, at
https://www.sba.gov/sites/default/files/FY17-CBJ_FY15-APR.pdf, and SBA, FY2019 Congressional Budget
Justification and FY2017 Annual Performance Report, pp. 73, 74, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/SBA_FY_19_508Final5_1.pdf.
186 SBA, FY2017 Congressional Budget Justification and FY2015 Annual Performance Report, p. 50, at
https://www.sba.gov/sites/default/files/FY17-CBJ_FY15-APR.pdf.
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Actual Total Administrative Resources
Fiscal Year
Number of Small Businesses Assisted
(Program Cost; $ in millions)
2017
4,100
$3.081
2016
5,245
$2.422
2015
5,360
$4.444
2014
4,104
$5.614
2013
3,913
$5.793
2012
3,272
$5.356
2011
3,550
$6.502
2010
3,480
$5.478
Source: U.S. Small Business Administration, FY2017 Congressional Budget Justification and FY2015 Annual
Performance Report, p. 101, at https://www.sba.gov/sites/default/files/FY17-CBJ_FY15-APR.pdf (number assisted
and program cost); and U.S. Small Business Administration, FY2022 Congressional Budget Justification and FY2020
Annual Performance Report, p. 73, https://www.sba.gov/document/report-congressional-budget-justification-annual-
performance-report.
Note: The 7(j) program is funded through a combination of directed appropriations, typically in the language
accompanying annual appropriations measures, and the SBA’s salaries and expenses (operating) budget account.
All Small Mentor-Protégé Program187
On July 30, 1998, the SBA established the 8(a) Mentor-Protégé Program to “enhance the
capabilities” of 8(a) firms and “improve [their] ability to successfully compete for contracts.”188
The program, which was merged into the SBA’s All Small Mentor-Protégé Program on
November 16, 2020, provided various forms of assistance, including technical or management
training, financial assistance in the form of equity investments or loans, subcontracts, trade
education, and assistance in performing prime contracts with the federal government through
joint venture agreements.189 The All Small Mentor-Protégé Program’s requirements and benefits
are essentially identical to those that were in place for the 8(a) Mentor-Protégé Program. The only
major difference is that the All Small Mentor-Protégé Program is available to all small businesses,
whereas the 8(a) Mentor-Protégé Program was limited to firms participating in the 8(a) program.
The SBA merged the programs in an effort to “eliminate confusion regarding perceived
differences between the two programs, remove unnecessary duplication of functions within SBA,
and establish one, unified staff to better coordinate and process mentor-protégé applications.”190

187 For additional information and analysis of federal Mentor-Protégé Programs, see CRS Report R41722, Small
Business Mentor-Protégé Programs, by Robert Jay Dilger.
188 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations; Rules of Procedure Governing Cases Before the Office of Hearings and Appeals: Final Rule,” 63
Federal Register 35739, June 30, 1998.
189 13 C.F.R. §124.520(a). See also GAO, Small Business: SBA Could Better Focus Its 8(a) Program to Help Firms
Obtain Contracts, GAO/RCED-00-196, July 20, 2000, p. 14, at http://www.gao.gov/new.items/rc00196.pdf; and SBA,
“Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments,” 85 Federal Register
66146-66199, October 16, 2020.
190 SBA, “Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments,” 84 Federal
Register 60846, November 8, 2019; and SBA, “Consolidation of Mentor-Protégé Programs and Other Government
Contracting Amendments,” 85 Federal Register 66146-66199, October 16, 2020.
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The SBA’s Office of Business Development (BD) administers the All Small Mentor-Protégé
Program. This makes it somewhat different from agency-specific mentor-protégé programs,
which are generally administered by the agency’s Office of Small and Disadvantaged Business
Utilization (OSDBU) and may involve coordination with agency contracting offices.191
SBA regulations govern various aspects of the All Small Mentor-Protégé Program, including who
may qualify as a mentor or protégé, the content of written agreements between mentors and
protégés, and the SBA’s evaluation of the mentor-protégé relationship. For example, a protégé
must
 be a small business with industry experience,
 have a proposed mentor prior to applying for the program,
 be organized for profit or as an agricultural cooperative, and
 have no more than two mentors in the business’s lifetime.192
A mentor must
 be organized for profit or as an agricultural cooperative,
 demonstrate that it is capable of carrying out its responsibilities to assist the
protégé,
 possess good character and a favorable financial position,
 not be on the federal list of debarred or suspended contractors or affiliated with
the protégé at the time of application or for any reason other than the mentor-
protégé agreement, and
 have no more than three protégés at a time.193
The SBA must determine that the mentor-provided assistance will promote real developmental
gains for the protégé and not be merely a vehicle to receive federal small business set-asides and
sole source contracts.194
Protégé benefits include
 guidance on internal business management systems, accounting, marketing,
manufacturing, and strategic planning;
 financial assistance in the form of equity investments (of up to 40% of the
protégé’s business), loans, and bonding;
 assistance navigating federal contract bidding, acquisition, and performance
process;
 education about international trade, strategic planning, and finding markets;

191 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require
Postagreement Tracking, GAO-11-548R, June 15, 2011, p. 3, at http://www.gao.gov/new.items/d11548r.pdf. GAO
identified mentor-protégé programs in 13 federal agencies.
192 SBA, “All Small Mentor-Protégé program,” at https://www.sba.gov/federal-contracting/contracting-assistance-
programs/all-small-mentor-protege-program. For additional information concerning the All Small Mentor-Protégé
Program’s requirements, see 13 C.F.R. §125.9.
193 13 C.F.R. §125.9; and SBA, “All Small Mentor-Protégé program.”
194 SBA, “All Small Mentor-Protégé program.”
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 business development, including strategy and identifying contracting and
partnership opportunities; and
 general and administrative assistance, such as human resource sharing or security
clearance support.195
Mentor-protégé agreements may last for no more than six years, and any changes to the
agreement must be approved by the SBA in advance.
The primary benefit for mentors is that they may form joint ventures with their protégés that
qualify for small business set-aside contracts for which the small business is eligible, including
contracts set aside for 8(a) program participants, service-disabled veteran-owned small
businesses, women-owned small businesses, and HUBZone small businesses.196
As of July 1, 2021, there were 1,237 active All Small Mentor-Protégé Program mentor-protégé
agreements, including 492 agreements with 8(a) firms.197
Program Statistics
As shown in Table 3, the number of 8(a) firms assisted by SBA Business Opportunity Specialists
(BOS) generally declined from FY2005 through FY2014 and has generally increased in recent
years, reaching a high of 11,150 in FY2020. The number of federal contracts awarded to 8(a)
firms has also increased in recent years, as has the amount of federal contracts awarded with an
8(a) preference. The 8(a) program’s administrative costs have varied somewhat, with increases in
some years and decreases in others.
Table 3. 8(a) Program Statistics,
Selected Years
Number of 8(a)
Amount of
Small Businesses
Federal
Assisted by SBA
Number of 8(a)
Contracts
SBA
Business
Firms Awarded
Awarded with an
Administrative
Opportunity
Federal
8(a) Preference
Costs ($ in
Fiscal Year
Specialists
Contracts
($ in millions)
millions)
2020
11,150
NA
$20.471
$50.002
2019
7,958
3,871
$18.558
$63.117
2018
6,789
3,709
$18.514
$71.456
2017
6,655
3,421
$17.369
$54.099
2016
8,010
NA
$17.432
$47.281
2015
6,948
NA
$16.747
$55.600
2014
6,660
NA
$17.151
$53.824
2013
6,661
NA
$14.689
$51.649
2012
7,388
NA
$16.570
$60.855
2011
7,814
NA
$17.397
$58.274

195 13 C.F.R. §125.9; and SBA, “All Small Mentor-Protégé program.”
196 13 C.F.R. §125.9; and SBA, “All Small Mentor-Protégé program.”
197 SBA, “Active mentor-protégé agreements,” July 1, 2021, at https://www.sba.gov/document/support-active-mentor-
protege-agreements.
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Number of 8(a)
Amount of
Small Businesses
Federal
Assisted by SBA
Number of 8(a)
Contracts
SBA
Business
Firms Awarded
Awarded with an
Administrative
Opportunity
Federal
8(a) Preference
Costs ($ in
Fiscal Year
Specialists
Contracts
($ in millions)
millions)
2010
8,442
NA
$18.718
$56.817
2005
9,458
NA
$11.790
$31.387
2000
6,383
NA
$5.780
$31.741
1995
6,002
2,755
$5.820
$32.668
1990
3,645
2,054
$3.830
$25.656
1987
2,938
1,713
$3.014
$20.788
1980
2,138
1,391
$1.600
$6.008
1977
1,482
1,044
$0.533
$3.916
Source: U.S. Congress, Senate Committee on Appropriations, Subcommittee on State, Justice, Commerce, the
Judiciary, and Related Agencies, Departments of State, Justice, and Commerce, the Judiciary, and Related Agencies
Appropriations for Fiscal Year 1978, Part 3-Justifications, hearing, 95th Cong., 1st sess., January 1, 1977 (Washington:
GPO, 1977), p. 889; U.S. Congress, Senate Committee on Appropriations, Subcommittee on State, Justice,
Commerce, the Judiciary, and Related Agencies, Departments of State, Justice, Commerce, the Judiciary, and Related
Agencies Appropriations for Fiscal Year 1979, Part 3-Justifications, hearing, 95th Cong., 2nd sess., January 1, 1978
(Washington: GPO, 1978), pp. 1154, 1155; U.S. Congress, House Committee on Appropriations, Subcommittee
on the Departments of State, Justice, and Commerce, the Judiciary, and Related Agencies, Departments of State,
Justice, and Commerce, the Judiciary, and Related Agencies Appropriations for 1980, Part 6, hearing, 96th Cong., 1st
sess., March 27, 1979 (Washington: GPO, 1979), pp. 606, 629; U.S. General Accounting Office, The SBA 8(a)
Procurement Program—A Promise Unfulfilled, CED-81-55, April 8, 1981, pp. 7, 28, at
https://www.gao.gov/products/ced-81-55; U.S. Congress, House Committee on Appropriations, Subcommittee
on Commerce, Justice, State, and the Judiciary, Departments of Commerce, Justice, and State, the Judiciary, and
Related Agencies Appropriations for 1982, Part 7, hearing, 97th Cong., 1st sess., March 16, 1981 (Washington: GPO,
1981), p. 74; U.S. General Accounting Office, Small Business Administration: Status, Operations, and Views on the 8(a)
Procurement Program, GAO/RCED-88-148BR, May 24, 1988, pp. 2, 11, 12, at https://www.gao.gov/products/rced-
88-148br; U.S. Congress, House Committee on Appropriations, Subcommittee on the Departments of
Commerce, Justice, and State, the Judiciary, and Related Agencies, Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations for Fiscal Year 1992, Part 6-Related Agencies, hearing, 102nd Cong., 1st
sess., March 14, 1991 (Washington: GPO, 1991), p. 283; U.S. General Accounting Office, Small Business: Problems
in Restructuring SBA’s Minority Business Development Program, GAO/RCED-92-68, January 31, 1992, p. 30, at
https://www.gao.gov/products/rced-92-68; U.S. General Accounting Office, Small Business: Status of SBA’s 8(a)
Minority Business Development Program, GAO/RCED-96-259, September 18, 1996, pp. 2, 4, at
https://www.gao.gov/products/t-rced-96-259; U.S. Congress, House Committee on Appropriations,
Subcommittee on the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies,
Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations for Fiscal Year 1997,
Part 4-Justification of the Budget Estimates, hearing, 104th Cong., 2nd sess., January 1, 1996 (Washington: GPO,
1996), p. 770; U.S. Congress, House Committee on Small Business, Small Business: Opportunity Denied, Scorecard
III, Democratic Committee Staff Report, 107th Cong., 2nd sess. May 15, 2002, pp. 7, 11; U.S. Small Business
Administration, FY2005 Congressional Performance Budget Request, pp. 91, 95; U.S. General Services
Administration, Sam.Gov, Data Bank, “FY2005 Small Business Goaling Report,” at
https://sam.gov/reports/awards/static; U.S. Small Business Administration, FY2017 Congressional Budget Justification
and FY2015 Annual Performance Report, pp. 47, 101, at https://www.sba.gov/sites/default/files/FY17-CBJ_FY15-
APR.pdf; U.S. Small Business Administration, FY2022 Congressional Budget Justification and FY2020 Annual
Performance Report, p. 73, at https://www.sba.gov/document/report-congressional-budget-justification-annual-
performance-report;. and U.S. General Services Administration, “Sam.Gov data bank: ad hoc report,” August 2,
2021, at https://sam.gov/reports/awards/adhoc (contract award data with an 8(a) preference generated for
FY2010-FY2020).
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As shown in Table 4, in FY2020, 8(a) firms were awarded $34.045 billion in federal contracts
(5.11% of all federal contracts awarded). Of that amount, these firms received $9.335 billion
through an 8(a) set-aside award, $11.136 billion through an 8(a) sole-source award, and $13.574
billion through either open competition ($2.209 billion) or with another small business preference
applied (e.g., small business set-aside and HUBZone set-aside or sole-source award) ($11.364
billion).
From FY2010 through FY2020, 8(a) firms were awarded, on average, approximately 5.46% of
the total amount of federal contracts awarded, ranging from a low of 5.09% of all federal
contracts in FY2011 to a high of 6.16% in FY2014.
During this period, 8(a) firms received about $313.962 billion in federal contracts: $88.642
billion through an 8(a) set-aside (28.2% of all 8(a) contracts), $104.971 billion through an 8(a)
sole-source award (33.4% of all 8(a) contracts), and $120.347 billion through either open
competition or with another small business preference applied (38.3% of all 8(a) contracts).
Table 4. Federal Contract Amount Awarded to 8(a) Firms,
by Award Type, FY2010-FY2020
($ in billions)
8(a) Total as a % of
Fiscal
8(a) Set-
8(a) Sole-
Other 8(a)
All Federal
Year
Aside
Source
Awards
8(a) Total
Contracts Awarded
2020
$9.335
$11.136
$13.574
$34.045
5.11% of $665.733
2019
$8.625
$9.932
$11.859
$30.418
5.15% of $590.162
2018
$9.208
$9.306
$11.633
$30.147
5.43% of $555.402
2017
$8.671
$8.697
$10.623
$27.992
5.48% of $510.668
2016
$8.601
$8.832
$10.290
$27.722
5.83% of $475.286
2015
$8.174
$8.573
$9.741
$26.488
6.02% of $440.205
2014
$8.002
$9.149
$10.358
$27.509
6.16% of $446.220
2013
$6.875
$7.813
$9.897
$24.585
5.31% of $463.425
2012
$7.158
$9.411
$12.055
$28.625
5.50% of $520.787
2011
$6.892
$10.505
$10.091
$27.487
5.09% of $539.775
2010
$7.101
$11.617
$10.226
$28.944
5.36% of $540.121
Total
$88.642
$104.971
$120.347
$313.962
5.46% of $5,747.784
Source: Data generated using U.S. General Services Administration, “Sam.Gov data bank: ad hoc report,”
August 2, 2021, at https://sam.gov/reports/awards/adhoc (for FY2020).
Notes: Other 8(a) awards include contracts awarded through open competition or with other small business
preferences applied (e.g., small business set-aside and HUBZone set-aside or sole-source award). The Federal
Procurement Data System̶ (FPDS), which is accessed through Sam.Gov, is the most comprehensive data system
available for federal contract awards and is updated continuously.
Current Issues
The SBA faces several challenges concerning the 8(a) Program, including a recent decline in
participation, reported variation in program service delivery, disagreements related to the
program’s financial thresholds used to determine economic disadvantage, and concerns related to
the performance measures used to evaluate the program’s success.
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Addressing Previous Declining Participation
Noting that the number of certified 8(a) firms had declined from 2010 to 2015, the SBA
announced in 2015 that it was establishing a goal to “increase the number of approved firms” in
the program by 5% in FY2016 and FY2017.198 In an effort to achieve this goal and increase 8(a)
Program retention, the SBA
 initiated a pilot program to streamline the program’s application process;
 increased its marketing of the 7(j) Management and Training Assistance Program
to 8(a) firms; and
 increased its efforts to expand the 8(a) Mentor-Protégé Program by streamlining
that program’s application process, shortening its application response time from
45 days to 10 days, and initiating an annual mentor-protégé conference to help
8(a) firms become more knowledgeable about the potential benefits of joint
ventures and the various rules and compliance requirements for mentor-protégé
agreements.199
The SBA presented four reasons to streamline the program’s application process:
1. Although regulatory guidance provides the SBA approximately 90 days to
process a complete application, several firms endured delays that extended
anywhere from 6 months to several years.
2. Nearly three-quarters of 8(a) applications are initially rejected due to incomplete
or missing documentation.
3. Less than half of complete applications are approved.
4. The SBA’s low rate of approval has led to an industry of third-party firms that
charge 8(a) applicants from $5,000 to $75,000 to prepare the application and
respond to the SBA’s processors. The SBA argued that some of these firms are
taking advantage of applicants, and regardless of the amount paid, there is no
guaranteed approval because the approval rate is consistently less than 50%.200
The SBA reported that it certified 568 applicants to the 8(a) Program in FY2015 (before the
streamlined process), 911 in FY2016 (after the streamlined process was instituted on a pilot
basis), and 557 in FY2017.201 The agency declared the pilot streamlined application process a
success. However, the SBA’s OIG has argued that shortening the review process by eliminating
required documents may erode core safeguards that prevented questionable firms from entering
the program:
Federal prosecutors have told OIG that it would be difficult for them to describe SBA, the
procuring agency, or honest 8(a) competitors as fraud victims when SBA is perceived not

198 SBA, FY2017 Congressional Budget Justification and FY2015 Annual Performance Report, p. 52, at
https://www.sba.gov/sites/default/files/FY17-CBJ_FY15-APR.pdf.
199 SBA, FY2017 Congressional Budget Justification and FY2015 Annual Performance Report, p. 50.
200 John Shoroka, SBA Office of Government Contracting and Business Development and Jackquline L. Robinson-
Burnette, SBA Office of Government Contracting and Business Development, “Grow the number of 8(a)-certified
disadvantaged small businesses,” at https://www.performance.gov/content/grow-number-8a-certified-disadvantaged-
small-businesses.
201 John Shoroka and Jackquline L. Robinson-Burnette, “Grow the number of 8(a)-certified disadvantaged small
businesses;” and SBA, FY2019 Congressional Budget Justification and FY2017 Annual Performance Report, p. 72, at
https://www.sba.gov/sites/default/files/aboutsbaarticle/SBA_FY_19_508Final5_1.pdf.
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to have exercised proper due diligence in admitting firms’ into the 8(a) Program. Although
SBA’s efforts to increase the participation in the 8(a) Program is commendable, SBA still
needs to ensure that only eligible firms are admitted into the program, and the
documentation supporting 8(a) Program application approvals is maintained in a method
ensuring clear eligibility of the applicant.202
As indicated in Table 3, the SBA has increased the number of 8(a) firms assisted by SBA BOSs
in recent years, including a significant increase from 7,958 in FY2019 to 11,150 in FY2020. The
SBA attributed this increase to (1) expanded outreach to federal agencies, including the provision
of a list of 8(a) participants who had not yet been awarded federal contracts; (2) continued growth
in the 7(j) program; (3) the streamlined application process; and (4) the reopening of the economy
during the COVID-19 pandemic.203
In a related development, a recent SBA OIG audit of the 8(a) Program’s application
determination process found that the SBA did not always document why the AA/BD approved
applications even though lower-level “reviewers [had] identified one or more eligibility issues”
with the applications.204 The OIG concluded that this lack of documentation resulted in
“potentially ineligible firms” being accepted into the program. To address this situation, the SBA
agreed with the OIG’s recommendation to clearly document, in its Business Development
Management Information System (BDMIS) which tracks 8(a) Program applications, justifications
for approval when they differ from that of lower-level reviewers. The SBA asserted that this lack
of documentation was not an indication that ineligible firms were being certified into the program
without adequate review.
Reported Variation in Service Delivery
Witnesses at congressional hearings have reported that common Business Opportunity Specialists
(BOS) practices, including the interpretation and implementation of standardized policies and
procedures, vary from SBA district office to SBA district office and across state lines.205 Some
Members of Congress have argued that “many of the problems with … BOS advocates are
compounded by the fact that” the position’s responsibilities are not laid out in statute.206 Instead,
they argue, the position’s responsibilities “have been left to develop with SOPs [Standard
Operating Procedures] and common practices.”207 They have also asserted that BOSs are “often

202 SBA, OIG, Report on the Most Serious Management and Performance Challenges in Fiscal Year 2017, Report
Number 17-02, October 14, 2016, p. 11, at https://www.sba.gov/sites/default/files/oig/FY_2017_-
_Management_Challenges_-_10_14_16_7.pdf.
203 SBA, FY2022 Congressional Budget Justification and FY2020 Annual Performance Report, pp. 73, 74, at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report.
204 SBA OIG, SBA’s 8(a) Business Development Program Eligibility, Report Number 16-13, April 7, 2016, p. 4, at
https://www.sba.gov/sites/default/files/oig/16-13_SBAs_8a_Business_Development_Program_Eligibility.pdf.
205 U.S. Congress, House Committee on Small Business, Defending America’s Small Contractors Act of 2016, report to
accompany H.R. 4341, 114th Cong., 2nd sess., July 25, 2016, H.Rept. 114-704 (Washington: GPO, 2016), pp. 10, 18.
206 U.S. Congress, House Committee on Small Business, Subcommittee on Contracting and Workforce, Supporting
Success: Empowering Small Business Advocates, 114th Cong., 1st sess., December 9, 2015, H.Comm.Doc 114-033
(Washington: GPO, 2015), p. 3.
207 U.S. Congress, House Committee on Small Business, Subcommittee on Contracting and Workforce, Supporting
Success: Empowering Small Business Advocates, p. 3. A new SOP for the 8(a) Program was released in 2016. See
SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,” SOP
80 05 5, effective September 23, 2016, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
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pulled by their district offices to help with other small business programs rather than overseeing
the 8(a) participants as intended.”208
During the 115th Congress, P.L. 115-91, the National Defense Authorization Act for Fiscal Year
2018, among other provisions, amended the Small Business Act to clarify the responsibilities of
Business Opportunity Specialists by providing them a statutory list of duties.209
Those concerned about variation in 8(a) Program service delivery also note that a 2010 GAO
report found a “breakdown in communication between SBA district offices and headquarters …
that resulted in inconsistencies in the way district offices delivered the program.”210 In addition, in
2015, GAO indicated that the SBA’s overlapping organizational structure may contribute to
variation in 8(a) Program service delivery:
SBA’s organizational structure often results in working relationships between headquarters
and field offices that differ from reporting relationships, potentially posing programmatic
challenges. District officials work with program offices at SBA’s headquarters to
implement the agency’s programs, but these officials report to regional administrators, who
themselves report to the Office of Field Operations. For example, … business opportunity
specialists in the district offices work with the Office of Government Contracting and
Business Development at SBA headquarters to assist small businesses with securing
government contracts but report to district office management.211
During the 114th Congress, legislation (H.R. 4341) was introduced to require GAO to review the
SBA’s Office of Government Contracting and Business Development (GCBD) and make

208 U.S. Congress, House Committee on Small Business, Subcommittee on Contracting and Workforce, Supporting
Success: Empowering Small Business Advocates, 114th Cong., 1st sess., December 9, 2015, H.Comm.Doc 114-033
(Washington: GPO, 2015), p. 3.
209 The act amended Section 4(g) of the Small Business Act by adding
(1) DUTIES.—The exclusive duties of a Business Opportunity Specialist employed by the
Administrator and reporting to the senior official appointed by the Administrator with
responsibilities under sections 8, 15, 31, and 36 (or the designee of such official) shall be to
implement sections 7, 8, and 45 and to complete other duties related to contracting programs under
this Act. Such duties shall include—(A) with respect to small business concerns eligible to receive
contracts and subcontracts pursuant to section 8(a)—(i) providing guidance, counseling, and
referrals for assistance with technical, management, financial, or other matters that will improve the
competitive viability of such concerns; (ii) identifying causes of success or failure of such
concerns; (iii) providing comprehensive assessments of such concerns, including identifying the
strengths and weaknesses of such concerns; (iv) monitoring and documenting compliance with the
requirements of sections 7 and 8 and any regulations implementing those sections; (v) explaining
the requirements of sections 7, 8, 15, 31, 36, and 45; and (vi) advising on compliance with
contracting regulations (including the Federal Acquisition Regulation) after award of such a
contract or subcontract; (B) reviewing and monitoring compliance with mentor-protégé agreements
under section 45; (C) representing the interests of the Administrator and small business concerns in
the award, modification, and administration of contracts and subcontracts awarded pursuant to
section 8(a); and (D) reporting fraud or abuse under section 7, 8, 15, 31, 36, or 45 or any
regulations implementing such sections.
210 GAO, Small Business Administration: Steps Have Been Taken to Improve Administration of the 8(a) Program, but
Key Controls for Continued Eligibility Need Strengthening, GAO-10-353, March 30, 2010, pp. 13, 14, 25, 26, at
http://www.gao.gov/assets/310/302582.pdf.
211 GAO, Small Business Administration: Leadership Attention Needed to Overcome Management Challenges, GAO-
15-347, September 22, 2015, p. 59, at http://www.gao.gov/assets/680/672648.pdf; and GAO, Major Management
Challenges and Program Risks: Small Business Administration, GAO-03-116, January 1, 2003, p. 27, at
http://www.gao.gov/assets/240/237003.pdf.
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recommendations to address several administrative concerns, including issues related to the
SBA’s organizational overlap.212
In a related development, GAO reported that a “skill gap” among BOSs may also contribute to
the possibility of variation in the program’s service delivery.
GAO noted that the SBA’s Office of Field Operations (OFO) revised its field office operations in
2012 following a 2010 review of all position descriptions to ensure that the descriptions aligned
with the SBA’s strategic plan and district office strategic plans. The SBA informed GAO that it
undertook this review because district office staff were given new responsibilities after the SBA
moved loan processing from district offices to loan processing centers in 2004. Before the review,
district office staff had two principal program delivery positions, lender relations specialist and
business development specialist. As a result of the review, descriptions for both of these positions
were rewritten and the business development position was split into two separate positions,
economic development specialist and business opportunity specialist. The skills and
competencies for the new position descriptions focused on the change in the district office’s
function from loan processing to program compliance and community outreach. Staff were
retrained for the rewritten positions.
The SBA reported that the change in the position descriptions created a “skill gap” because
employees who were originally required to have a financial background for loan processing were
now required to have different skills, such as a marketing background and interpersonal skills
needed for assisting and overseeing 8(a) firms and conducting outreach to small businesses.213
The SBA informed GAO that the skill gap was particularly pronounced among 885 employees in
two job series, GS-1101 and GS-1102, including BOSs, economic development specialists, and
procurement staff, and that despite its efforts to address this skill gap through training and
offering early retirement and separation incentives in FY2012 and FY2014 in an effort to
restructure its personnel, “the competency gap remains.”214 The SBA also noted that its skill gap
had been compounded by recent changes in job requirements and new initiatives that require new
skill sets for its employees. For example, P.L. 114-92, the National Defense Authorization Act of

212 H.R. 4341, the Defending America’s Small Contractors Act of 2016, at §505. GAO Review of the Office of
Government Contracting and Business Development of the Small Business Administration. (a) STUDY.—Not later
than 60 days after the date of the enactment of this act, the Comptroller General of the United States shall initiate a
review of the Office of Government Contracting and Business Development of the Small Business Administration.
Such review shall examine the extent to which the personnel of the Small Business Administration who carry out
procurement and business development programs report to the Office of Government Contracting and Business
Development; (2) whether greater efficiency and consistency in the certification process of procurement and business
development programs could be achieved by creating a single organizational unit of employees to process all
certifications required by procurement and business development programs; (3) whether greater efficiency and efficacy
in the performance of procurement and business development programs could be achieved by improving the alignment
of the field personnel assigned to such programs; (4) how the Office of Government Contracting and Business
Development could improve its staffing of regulatory drafting functions and its coordination with the Federal
Acquisition Regulatory Council to ensure timely rulemaking by the Small Business Administration; and (5) any other
areas in which the Comptroller General determines that the Small Business Administration could improve its
performance with respect to procurement and business development programs.
213 GAO, Small Business Administration: Leadership Attention Needed to Overcome Management Challenges, GAO-
15-347, September 22, 2015, pp. 44-46, at http://www.gao.gov/assets/680/672648.pdf; and GAO, Small Business
Administration: Views on the Operational Effects of Closing Regional Offices, GAO-15-369, September 22, 2015, p.
28, at http://www.gao.gov/assets/680/672679.pdf.
214 GAO, Small Business Administration: Leadership Attention Needed to Overcome Management Challenges, GAO-
15-347, September 22, 2015, pp. 44-46, at http://www.gao.gov/assets/680/672648.pdf.
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FY2016, requires BOSs to obtain federal acquisition certification in contracting as a prerequisite
for employment.215
Arguably, the SBA’s relatively recent issuance of a new 300-page SOP (effective September
2016) for the Office of Business Development, which oversees the 8(a) Program, may help to
address the reported skill gap. The new SOP provides all SBA staff, including BOSs, specific
guidance concerning their roles and responsibilities in 8(a) Program service delivery.
Oversight of 8(a) Program Participant’s Continuing Eligibility
As mentioned previously, two SBA offices, the GCBD and the OFO, share responsibility for
overseeing the 8(a) Program. Within GCBD, BOSs assigned to the Office of Certification and
Eligibility (OCE) evaluate all 8(a) program applications and conduct continuing eligibility
reviews of “high-risk” or “complex” 8(a) firms, including those firms with total 8(a) revenue
exceeding $10 million, are part of a joint venture, are party to a mentor-protégé agreement, or are
an entity-owned firm such as an Alaska Native Corporation, and those that are requested from
district office field staff.216 However, an SBA OIG audit found that the OCE reviewed the
continuing eligibility of less than half of the firms identified as high risk in FY2016 (352 of 859
firms, or 41%) and in FY2017 (350 of 798 firms, or 44%).217
Within OFO, BOSs in each of the SBA’s 68 district offices work directly with their assigned 8(a)
firms and, among other duties, conduct annual reviews of those firms’ progress toward achieving
the targets, objectives, and goals set forth in their business development plan. According to the
8(a) Program’s Standard Operating Procedures (SOP) manual, BOSs in each of the SBA’s 68
district offices conduct continuing eligibility reviews for all 8(a) firms not reviewed by the GCBD
to ensure their compliance with all continuing eligibility requirements during the annual review
process.218 However, in practice, the SBA OIG’s audit found that district office BOSs assess

215 P.L. 114-92, the National Defense Authorization Act of FY2016, at §865. Certification requirements for Business
Opportunity Specialists, commercial market representatives, and procurement center representatives.
(g) Certification Requirements for Business Opportunity Specialists-(1) IN GENERAL- Consistent
with the requirements of paragraph (2), a Business Opportunity Specialist described under section
7(j)(10)(D) shall have a Level I Federal Acquisition Certification in Contracting (or any successor
certification) or the equivalent Department of Defense certification, except that a Business
Opportunity Specialist who was serving on or before January 3, 2013, may continue to serve as a
Business Opportunity Specialist for a period of 5 years beginning on such date without such a
certification. (2) DELAY OF CERTIFICATION REQUIREMENT-(A) TIMING- The certification
described in paragraph (1) is not required for any person serving as a Business Opportunity
Specialist until the date that is one calendar year after the date such person is appointed as a
Business Opportunity Specialist. (B) APPLICATION- The requirements of subparagraph (A)
shall—(i) be included in any initial job posting for the position of a Business Opportunity
Specialist; and (ii) apply to any person appointed as a Business Opportunity Specialist after January
3, 2013.
216 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, Report Number 18-
22, September 7, 2018, pp. 1, 2, at https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report_18-22.pdf; and SBA,
Office of Business Development, “Standard Operating Procedure for the Office of Business Development,” SOP 80 05
5, effective September 23, 2016, p. 212, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
217 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, Report Number 18-
22, September 7, 2018, p. 4, at https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report_18-22.pdf.
218 SBA, Office of Business Development, “Standard Operating Procedure for the Office of Business Development,”
SOP 80 05 5, effective September 23, 2016, p. 212, at https://www.sba.gov/sites/default/files/sops/SOP_80_05_5_.pdf.
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continuing eligibility as part of the annual review process for all 8(a) firms, including those
deemed to be high risk or complex.219
The SBA is also required to review the participant’s continuing eligibility “upon receipt of
specific and credible information alleging that a participant no longer meets the eligibility
requirements.”220 Generally, the SBA receives this information from the SBA OIG’s Hotline.221
However, the SBA OIG’s audit found that the OCE did not conduct continuing eligibility reviews
for any of the 44 OIG Hotline complaints that were referred to the GCBD from October 1, 2015,
through May 4, 2017. In addition, GCBD did not inform district office BOSs of complaints filed
against firms within their purview. As a result, district office BOSs took no action regarding the
complaints.222
The SBA OIG’s audit reviewed the continuing eligibility of two samples of 8(a) firms to
determine whether the SBA’s continuing eligibility review process “consistently identify
ineligible firms enrolled in the program”: the 15 individually owned 8(a) firms with the highest
set-aside dollars in FY2016 that were scheduled to have continuing eligibility reviews within the
first half of FY2017 and 10 individually owned 8(a) firms that were identified as being ineligible
in Hotline complaints received between October 1, 2015, and May 4, 2017.223
The SBA OIG found that “despite OCE and district offices having shared responsibility for
assessing 8(a) firms’ continuing eligibility, they did not detect that 4 of the 15 individually-owned
8(a) firms we reviewed were ineligible for the 8(a) Program,” and “our review of the 10 firms
referred by the OIG Hotline revealed that they were all ineligible for the 8(a) program, based on
issues such as excessive income and lack of good character.”224 In addition, the SBA OIG found
that the SBA had identified eligibility concerns through its annual reviews and continuing
eligibility reviews for 6 of the 15 individually owned 8(a) firms the OIG had reviewed, but “did
not take timely action to remove these firms from the 8(a) Program or document resolution of
eligibility issues.”225
The SBA OIG concluded that 20 of the 25 firms it reviewed should have been removed from the
8(a) Program and made 11 recommendations “to improve the overall management and
effectiveness” of the 8(a) Program’s continuing eligibility review process.226 SBA management

219 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, Report Number 18-
22, September 7, 2018, p. 2, at https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report_18-22.pdf.
220 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, p. 2.
221 The SBA OIG’s Hotline is a web page that provides visitors the option of filing a written complaint by clicking on a
link on the web page or by sending the complaint to the SBA OIG by mail or courier. The Hotline also provides a toll-
free telephone number (800) 767-0385. See SBA, OIG, “Hotline,” at https://www.sba.gov/oig/hotline
222 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, Report Number 18-
22, September 7, 2018, p. 9, at https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report_18-22.pdf.
223 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, p. 14.
224 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, pp. 4, 9.
225 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, p. 7.
226 The recommendations are (1) Coordinate with the Associate Administrator for the Office of Field Operations to
improve the transfer of continuing eligibility review documents for high risk firms from the district offices to the Office
of Certification and Eligibility; (2) Revise its current process to ensure that it accurately identifies all high risk firms to
receive continuing eligibility reviews from the Office of Certification and Eligibility; (3) Establish and implement clear
policies and procedures for evaluating 8(a) continuing eligibility, including ensuring that district offices use
standardized analysis tools that conform with 8(a) continuing eligibility requirements found in 13 C.F.R. 124, and train
employees on these procedures; (4) Develop and implement a comprehensive oversight plan to ensure completion of
continuing eligibility reviews of all 8(a) firms, monitor the quality of continuing eligibility reviews, and eliminate
duplication between the Office of Certification and Eligibility and the district offices; (5) Conduct continuing eligibility
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agreed with seven of the recommendations, partially agreed to the other four recommendations,
and indicated that it would conduct continuing eligibility reviews for the firms identified in the
SBA OIG’s audit as ineligible and take appropriate action.227
Financial Thresholds for Economic Disadvantaged Status
Section 8(a)(6)(A) of the Small Business Act defines economically disadvantaged individuals as
“socially disadvantaged individuals whose ability to compete in the free enterprise system has
been impaired due to diminished capital and credit opportunities as compared to others in the
same business area who are not socially disadvantaged.” In determining the degree of diminished
credit and capital opportunities, Section 8(a)(6)(A) authorizes the SBA to “consider, but not be
limited to, the assets and net worth of such socially disadvantaged individual.”
The SBA uses a three-part test for determining economic disadvantage relating to the degree of
applicant’s diminished credit and capital opportunities: the applicant’s net worth, personal
income, and total assets. As mentioned, the SBA began transitioning to the use of objective
monetary thresholds to assess these personal financial characteristics in 1989. At that time, the
SBA established by regulation that the applicant’s personal net worth had to be less than
$250,000 at the time of entry into the program and less than $750,000 for continuing eligibility.228
In 2011, the SBA added monetary thresholds for the applicant’s personal income (generally
cannot exceed $250,000, averaged over the previous three years, at the time of application, and
$350,000, averaged over the previous three years, for continuing eligibility) and total assets
(cannot exceed $4 million at entry and $6 million for continued eligibility).229
On May 11, 2020, the SBA set the following monetary thresholds, which are currently in effect:
 net worth of less than $750,000 (excluding ownership interest in the applicant’s business,
equity in their primary personal residence, and funds invested in an official retirement
account);

reviews for the firms that we identified as ineligible that are still active in the 8(a) program, and take timely action to
remove firms found to be ineligible; (6) Develop and implement a centralized process to track and document all
adverse actions and voluntary withdrawals from the 8(a) program, from recommendation through resolution; (7)
Establish and implement clear policies and procedures that include timelines for sending Notices of Intent to Terminate
and to Graduate Early firms after eligibility issues are first identified; (8) Conduct continuing eligibility reviews for the
firms we identified as ineligible that are still active in the 8(a) program, and take timely action to remove firms found to
be ineligible; (9) Establish and implement clear policies and detailed procedures, consistent with 13 C.F.R. 124.112(c),
to timely and effectively review and address complaints regarding 8(a) continuing eligibility, including communicating
the content of the complaint to the district office, and train employees implementing the 8(a) program on the updated
procedures; (10) Develop a robust system for tracking complaints that are received regarding firms’ continuing
eligibility for the 8(a) program, and tracking the actions taken to address the complaints; and (11) Conduct continuing
eligibility reviews, including assessing the allegations in the 77 OIG Hotline complaints, for the firms that were the
subject of the complaints that are still active in the 8(a) program, and for which the complainant provided specific and
credible information, and, if necessary, take appropriate action to remove ineligible firms from the 8(a) program. See
SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, pp. 5, 6, 8, 11-13.
227 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, pp. 11-13. SBA
management concurred with recommendations (2), (3), (6), (7), (9), (10), and (11) and partially concurred with
recommendations (1), (4), (5), and (8) listed above.
228 SBA, “Minority Small Business and Capital Ownership Development Program: Final Rule,” 54 Federal Register
34692, August 21, 1989 (codified, as amended, at 13 C.F.R. §124.104(c)).
229 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8229-8231, February 11, 2011.
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 generally no more than $350,000 in average adjusted gross income over the preceding
three years; and
 no more than $6 million in assets (excluding funds invested in an official retirement
account).230
Prior to the SBA’s decision to eliminate the $250,000 personal net worth threshold at the time of
entry into the 8(a) program and increase the thresholds for personal income and total assets, some
Members of Congress had argued that the 8(a) program’s financial thresholds should be increased
or periodically adjusted for inflation. During the 112th Congress, H.R. 3754, the Not Too Small to
Succeed in Business Act of 2011, would have increased the net worth thresholds to $750,000 for
8(a) Program admission and $2.25 million for continued participation after admission. H.R. 2424,
the Expanding Opportunities for Main Street Act of 2011, would have amended Section
8(a)(6)(A) by inserting after “disadvantaged individual” the following: “For purposes of this
section, an individual having a net worth of more than $1,500,000 is not economically
disadvantaged.” Legislation with provisions similar to those in H.R. 2424 was also introduced
during the 113th Congress (H.R. 2550, the Minority Small Business Enhancement Act of 2013,
and H.R. 2551, the Expanding Opportunities for Main Street Act of 2013).
Advocates for increasing the program’s personal net worth threshold noted that the Department of
Transportation (DOT) increased the personal net worth threshold for determining eligibility for
the Disadvantaged Business Enterprise (DBE) program in 2011 to account for inflation. The DBE
threshold was increased from $750,000 (which was set by DOT in 1999, and was based on the
8(a) Program’s $750,000 threshold) to $1.32 million.231 DBE firms, which are provided special
consideration in the awarding of federal transportation contracts, argued that the limit penalized
success and imposed “a glass ceiling on the growth and competitiveness of DBE firms.”232
Opponents argued that the $1.32 million limit was too high and would include business owners
who were not truly disadvantaged and that raising the limit would favor larger, established, and
richer DBEs at the expense of smaller, start-up firms because the larger companies would be able
to stay in the program longer.233

230 SBA, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business
Certification,” 85 Federal Register 27650-27665, May 11, 2020.
231 U.S. Department of Transportation (DOT), Office of the Secretary, “Disadvantaged Business Enterprise: Program
Improvements,” 75 Federal Register 25817, May 10, 2010; and DOT, Office of the Secretary, “Disadvantaged
Business Enterprise: Program Improvements,” 76 Federal Register 5085, January 8, 2011 (codified at 49 C.F.R.
§26.67(a)(2)(i)).
The DBE program’s personal net worth inflation adjustment in 2011 used 1989 as the base year, even though DOT
adopted the personal net worth limit in 1999. DOT argued that it was appropriate to use 1989 as the base year because
the SBA’s standard, which DOT used, was adopted in 1989 and had not been adjusted for inflation at any time. See
DOT, Office of the Secretary, “Disadvantaged Business Enterprise: Program Improvements,” 76 Federal Register
5086, January 8, 2011.
232 U.S. Department of Transportation, Office of the Secretary, “Disadvantaged Business Enterprise: Program
Improvements,” 75 Federal Register 25817, May 10, 2010.… DBE regulations require state and local transportation
agencies that receive DOT financial assistance, to establish goals for the participation of DBEs. Each DOT-assisted
State and local transportation agency is required to establish annual DBE goals, and review the scopes of anticipated
large prime contracts throughout the year and establish contract-specific DBE subcontracting goals.… There has been,
since 1983, a statutory provision requiring DOT to ensure that at least 10% of the funds authorized for the highway and
transit financial assistance programs be expended with DBEs. DOT has established a single DBE goal, encompassing
both firms owned by women and minority group members. See U.S. Department of Transportation, “Disadvantaged
Business Enterprise (DBE) Program,” at https://www.transportation.gov/civil-rights/disadvantaged-business-enterprise.
233 U.S. Department of Transportation, Office of the Secretary, “Disadvantaged Business Enterprise: Program
Improvements,” 76 Federal Register 5085, January 8, 2011.
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More recently, the SBA’s OIG has argued that the SBA’s decision to exclude equity in a primary
residence from an individual’s net worth calculation “serves as a loophole allowing affluent
business owners to shelter wealth in personal real estate, while taking advantage of a program
designed to help the socially and economically disadvantaged.”234
Measuring Program Success
Pursuant to P.L. 100-656, the Business Opportunity Development Reform Act of 1988, the SBA
is required to “develop and implement a process for the systematic collection of data on the
operations of the [8(a)] Program” and to report this data, not later than April 30 of each year, to
Congress.235 The act requires the report to include the following:
 The average personal net worth of individuals who own and control concerns that
were initially certified for program participation during the immediately
preceding fiscal year and the dollar distribution of each of these individual’s net
worth, at $50,000 increments.
 A description and estimate of the benefits and costs that have accrued to the
economy and the federal government in the immediately preceding fiscal year
due to the operations of those business concerns that were performing 8(a)
contracts.
 A compilation and evaluation of those business concerns that have exited the
program during the immediately preceding three fiscal years, including the
number of concerns actively engaged in business operations, those that have
ceased or substantially curtailed operations, including the reasons for such
actions, and those concerns that have been acquired by other firms or
organizations owned and controlled by other than socially and economically
disadvantaged individuals. For those businesses that have continued operations
after they exited from the program, the SBA Administrator is required to
separately detail the benefits and costs that have accrued to the economy during
the immediately preceding fiscal year due to their operations.
 A listing of all program participants during the preceding fiscal year identifying,
by state and region, for each firm: the concern’s name, the race or ethnicity, and
gender of the disadvantaged owners, the dollar value of all contracts received in
the preceding year, the dollar amount of advance payments received by each
concern pursuant to contracts awarded under Section 8(a), and a description
including (if appropriate) an estimate of the dollar value of all benefits and loans
received during such year.
 The total dollar value of 8(a) contracts and options awarded during the preceding
fiscal year and such amount expressed as a percentage of total sales of all firms
participating in the program during such year; and of firms in each of the nine
years of program participation.

234 SBA, Office of Inspector General (SBA OIG), Report on the Most Serious Management and Performance
Challenges in Fiscal Year 2017, Report Number 17-02, October 14, 2016, p. 12, at https://www.sba.gov/sites/default/
files/oig/FY_2017_-_Management_Challenges_-_10_14_16_7.pdf.
235 P.L. 100-656, the Business Opportunity Development Reform Act of 1988, §408. Data Collection, 102 Stat. 3877,
15 U.S.C. §636(j)16(A)(B)(C).
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 A description of additional resources or program authorities required to provide
the types of services needed over the next two-year period to service the expected
portfolio of 8(a) certified firms.
 The total dollar value of 8(a) contracts and options, at such dollar increments as
the SBA Administrator deems appropriate, for each four digit standard industrial
classification code under which such contracts and options were classified.
The SBA’s FY2014 report (the latest one available) indicated that 8(a) firms “contributed an
estimated 158,018 jobs to the Nation’s economy,” and that 2,209 of the 2,288 firms that had
exited and completed the program during the three preceding fiscal years (October 1, 2010
through September 30, 2013) were still active, 45 had ceased operations, and 34 did not have data
available for determining their status as reported by Dun and Bradstreet. Of the active firms, “two
were acquired by another firm or organization owned and controlled by other than socially and
economically disadvantages individuals and 144 firms were substantially curtailed within the past
three years.”236 In addition, the 2,209 still active firms reported FY2014 revenue of approximately
$5.49 billion and provided jobs for approximately 70,330 persons.237
In 2000, GAO recommended that the SBA augment its data collection activities by periodically
surveying a nationwide sample of 8(a) firms. GAO argued that a survey would improve the
SBA’s ability to determine how well the program is working, further arguing that “at a minimum,
the survey should assess whether SBA assistance is meeting the firms’ expectations and needs.”238
Previously, the SBA contracted with a third party to conduct an annual client satisfaction survey
of small businesses that received management training and technical assistance from Small
Business Development Centers, SCORE, and Women Business Centers. The survey’s objective
was to measure these programs’ impact “on the creation, financial development and survival of
client firms.”239 The wording of many of that survey’s questions, which focused on client
satisfaction and the programs’ impact on client behavior and economic success, is available on
the SBA’s website and could prove useful should the SBA decide to conduct a nationwide survey
of 8(a) firms.240

236 SBA, Office of Business Development, “FY2014 408 Report to the Congress,” p. 4, at https://www.sba.gov/sites/
default/files/resources_articles/FY_14_408_Report.pdf.
237 SBA, Office of Business Development, “FY2014 408 Report to the Congress,” p. 4.
238 GAO, Small Business: SBA Could Better Focus Its 8(a) Program to Help Firms Obtain Contracts, GAO-RCED-00-
196, July 20, 2000, p. 23, at http://www.gao.gov/assets/240/230496.pdf.
239 SBA, “Impact Study of Entrepreneurial Dynamics: Office of Entrepreneurial Development Resource Partners’ Face-
to-Face Counseling,” Concentrance Consulting Group, Inc., September 2013, p. 1, at https://www.sba.gov/sites/default/
files/files/OED_ImpactReport_09302013_Final.pdf.
240 Concentrance Consulting Group, Inc, “Impact Study of Entrepreneurial Dynamics: Office of Entrepreneurial
Development Resource Partners; Face-to-Face Counseling,” September 2013, at https://www.sba.gov/sites/default/
files/2020-11/Impact_Study_of_Entrepreneurial_Development_Resources_2013_09.pdf. Previous reports can be found
at SBA, “Entrepreneurial Development Impact Report,” at https://www.sba.gov/document/report—entrepreneurial-
development-impact-report.
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Appendix. Comparison of the Requirements
Pertaining to Different Types of 8(a) Firms
Table A-1. Requirements for Different Types of 8(a) Firms
8(a) Firms
Category
Generally
Tribally Owned
ANC-Owned
NHO-Owned
CDC-Owned
“Small”
Independently
Independently
Independently
Independently
Independently
owned and
owned and
owned and
owned and
owned and
operated; not
operated; not
operated; not
operated; not
operated; not
dominant in
dominant in field of
dominant in field of
dominant in
dominant in
field of
operation; meets
operation; meets
field of
field of
operation;
size standards (15
size standards (15
operation;
operation;
meets size
U.S.C. §631(a))
U.S.C. §631(a))
meets size
meets size
standards (15
Affiliations based on
Affiliations based on
standards (15
standards (15
U.S.C. §631(a)) the tribe or tribal
the ANC or
U.S.C. §631(a))
U.S.C. §631(a))
All affiliations
ownership, among
ownership by the
Affiliations
Affiliations
count (13
others, do not count ANC, among others, based on the
based on the
C.F.R.
(15 U.S.C.
do not count (15
NHO or
CDC or
§121.103)
§636(j)(10)(J)(ii); 13
U.S.C.
ownership by
ownership by
C.F.R.
§636(j)(10)(J)(ii); 13
the NHO,
the CDC,
§124.109(c)(2))
C.F.R.
among others,
among others,
§124.109(c)(2))
do not count
do not count
(15 U.S.C.
(15 U.S.C.
§636(j)(10)(J)(ii); §636(j)(10)(J)(ii);
13 C.F.R.
13 C.F.R.
§124.110(c))
§124.111(c))
“Business”
For-profit
For-profit entity
For-profit entity
For-profit entity For-profit entity
entity with its
with its place of
with its place of
with its place of
with its place of
place of
business in the
business in the
business in the
business in the
business in the
United States;
United States;
United States;
United States;
United States;
operates primarily
operates primarily
operates
operates
operates
within the United
within the United
primarily within
primarily within
primarily
States or makes a
States or makes a
the United
the United
within the
significant
significant
States or makes
States or makes
United States
contribution to the
contribution to the
a significant
a significant
or makes a
U.S. economy (13
U.S. economy (13
contribution to
contribution to
significant
C.F.R.
C.F.R.
the U.S.
the U.S.
contribution
§121.105(a)(1))
§121.105(a)(1))
economy (13
economy (13
to the U.S.
Although ANC may
C.F.R.
C.F.R.
economy (13
be nonprofit, ANC-
§121.105(a)(1))
§121.105(a)(1))
C.F.R.
owned firms must
§121.105(a)
be for-profit to be
(1))
eligible for 8(a)
Program (13 C.F.R.
§124.109(a)(3))
“Unconditionally At least 51%
At least 51% tribally
At least 51% ANC-
At least 51%
At least 51%
owned and
unconditionally owned (13 C.F.R.
owned (13 C.F.R.
NHO-owned
CDC-owned
controlled”
and directly
§124.109(b))
§124.109(a)(3))
(13 C.F.R.
(13 C.F.R.
owned by one
Management may be
Management may be
§124.110(a))
§124.111(a))
or more
conducted by
conducted by
NHO must
Management
disadvantaged
individuals who are
individuals who are
control the
and daily
individuals
not members of the
not Alaska Natives
board of
business
who are U.S.
tribe provided that
provided that the
directors, but
operations to
citizens (13
the SBA determines
SBA determines that individual who
be conducted
Congressional Research Service

46

SBA’s “8(a) Program”: Overview, History, and Current Issues

8(a) Firms
Category
Generally
Tribally Owned
ANC-Owned
NHO-Owned
CDC-Owned
C.F.R.
that such
such management is
is responsible
by individuals
§124.105)
management is
necessary to assist
for day-to-day
having
Management
necessary to assist
the business’s
management
managerial
and daily
the business’s
development, among need not
experience of
business
development, among other things (13
establish
an extent and
operations
other things (13
C.F.R.
personal social
complexity
must be
C.F.R.
§124.109(c)(4)(B))
and economic
needed to run
conducted by
§124.109(c)(4)(B))
disadvantage
the firm (13
one or more
(13 C.F.R.
C.F.R.
disadvantaged
§124.110(d))
§124.111(b))
individuals (13
C.F.R.
§124.106)
“Socially
Members of
Indian tribes
ANCs presumed to
NHOs
CDCs
disadvantaged
designated
presumed to be
be socially
presumed to be
presumed to be
individual”
groups
socially
disadvantaged (43
socially
socially
presumed to
disadvantaged (43
U.S.C. §1626(e); 15
disadvantaged
disadvantaged
be socially
U.S.C. §1626(e); 15
U.S.C.
(43 U.S.C.
(42 U.S.C.
disadvantaged;
U.S.C.
§637(a)(4)(A)-(B);
§1626(e); 15
§9815(a)(2))
other
§637(a)(4)(A)-(B);
13 C.F.R.
U.S.C.
individuals may 13 C.F.R.
§124.109(b)(1))
§637(a)(4)(A)-
prove personal §124.109(b)(1))
(B); 13 C.F.R.
disadvantage
§124.109(b)
by a
(1))
preponderance
of the
evidence (13
C.F.R.
§124.103)
“Economically
Financial
Tribe must prove
Deemed to be
NHO must
CDCs
disadvantaged
information
economic
economically
prove economic presumed to be
individual”
(e.g., personal
disadvantage the
disadvantaged (43
disadvantage
economically
income,
first time a tribally
U.S.C. §1626(e); 13
the first time a
disadvantaged
personal net
owned firm applies
C.F.R.
NHO owned
(42 U.S.C.
worth, fair
to the 8(a) Program;
§124.109(a)(2))
firm applies to
§9815(a)(2))
market value
thereafter, a tribe
the 8(a)
of assets) must need only prove
Program;
show
economic
thereafter, a
diminished
disadvantage at the
NHO need only
financial capital request of the SBA
prove economic
and credit
(13 C.F.R.
disadvantage at
opportunities
§124.109(b)(2))
the request of
(13 C.F.R.
the SBA
§124.104)
(13 C.F.R.
§124.110(c)
Congressional Research Service

47

link to page 54 link to page 54 SBA’s “8(a) Program”: Overview, History, and Current Issues

8(a) Firms
Category
Generally
Tribally Owned
ANC-Owned
NHO-Owned
CDC-Owned
“Good
Criminal
Criminal conduct or
Criminal conduct or
Criminal
Criminal
character”
conduct or
violations of SBA
violations of SBA
conduct or
conduct or
violations of
regulations may
regulations may
violations of
violations of
SBA
result in denial of
result in denial of
SBA regulations
SBA regulations
regulations
participation; cannot
participation; cannot
may result in
may result in
may result in
be debarred or
be debarred or
denial of
denial of
denial of
suspended from
suspended from
participation;
participation;
participation;
government
government
cannot be
cannot be
cannot be
contracting (13
contracting (13
debarred or
debarred or
debarred or
C.F.R. §124.108(a))
C.F.R. §124.108(a))
suspended from suspended from
suspended
Requirement applies
Requirement applies
government
government
from
only to officers,
only to officers,
contracting (13
contracting (13
government
directors, and
directors, and
C.F.R.
C.F.R.
contracting
shareholders owning shareholders owning §124.108(a))
§124.108(a))
(13 C.F.R.
more than a 20%
more than a 20%
Regulations do
Requirements
§124.108(a))
interest in the
interest in the
not address to
apply to the
business, not to all
business, not to all
whom
firm and “all its
members of the
ANC shareholders
requirements
principals” (13
tribe (13 C.F.R.
(13 C.F.R.
applya
C.F.R.
§124.109(c)(7)(B)(ii)) §124.109(c)(7)(B)(ii))
§124.111(g))
“Demonstrated
Firm must
Firm must have
Firm must have
Firm must have
Firm must have
potential for
generally have
been in business in
been in business in
been in business been in business
success”
been in
primary industry for
primary industry for
in primary
in primary
business in
at least two full
at least two full
industry for at
industry for at
primary
years prior to date
years prior to date
least two full
least two full
industry for at
of application to 8(a) of application to 8(a) years prior to
years prior to
least two full
Program; individuals
Program; individuals
date of
date of
years prior to
who will manage the
who will manage the
application to
application to
date of
firm must have
firm must have
8(a) Program;
8(a) Program;
application to
substantial
substantial
individuals who
individuals who
8(a) Program
experience, and firm
experience, and firm
will manage the
will manage the
unless SBA
must have had
must have had
firm must have
firm must have
grants a
successful
successful
substantial
substantial
waiver; waiver
performance and
performance and
experience, and
experience, and
based on 5
adequate capital; or
adequate capital; or
firm must have
firm must have
conditions b
Tribe must have
ANC must have
had successful
had successful
(13 C.F.R.
made written
made written
performance
performance
§124.107)
commitment to
commitment to
and adequate
and adequate
support the firm and support the firm and capital; or NHO capital; or CDC
have the financial
have the financial
must have made must have made
ability to do so
ability to do so
written
written
(13 C.F.R.
(13 C.F.R.
commitment to
commitment to
§124.109(c)(6)(i)-(iii) §124.109(c)(6)(i)-(iii) support the
support the
firm and have
firm and have
the financial
the financial
ability to do so
ability to do so
(13 C.F.R.
(13 C.F.R.
§124.110 (g)(1)-
§124.111 (f)(1)-
(3)
(3)
Sole-source
With
Can be made with
Can be made with
Can be made
With contracts
awards
contracts
contracts valued at
contracts valued at
with
valued at over
valued at over
over $4.5 million
over $4.5 million
Department of
$4.5 million
$4.5 million
($7.5 million for
($7.5 million for
Defense
($7.5 million for
($7.5 million
manufacturing
manufacturing
contracts
manufacturing
for
contracts) even if
contracts) even if
valued at over
contracts), sole-
manufacturing
there is a reasonable there is a reasonable $4.5 million
source awards
Congressional Research Service

48

SBA’s “8(a) Program”: Overview, History, and Current Issues

8(a) Firms
Category
Generally
Tribally Owned
ANC-Owned
NHO-Owned
CDC-Owned
contracts),
expectation that at
expectation that at
($7.5 million for permissible only
sole-source
least two eligible
least two eligible
manufacturing
if there is not a
awards
8(a) firms will
8(a) firms will
contracts) even
reasonable
permissible
submit offers and
submit offers and
if there is a
expectation that
only if there is
the award can be
the award can be
reasonable
at least two
not a
made at fair market
made at fair market
expectation that eligible 8(a)
reasonable
price (15 U.S.C.
price (15 U.S.C.
at least two
firms will
expectation
§637(a)(1)(D)(i)-(ii);
§637(a)(1)(D)(i)-(ii);
eligible 8(a)
submit offers
that at least
48 C.F.R. §19.805-
48 C.F.R. §19.805-
firms will
and the award
two eligible
1(b)(1)-(2))
1(b)(1)-(2))
submit offers
can be made at
8(a) firms will
and the award
fair market
submit offers
can be made at
price (48 C.F.R.
and the award
fair market
§19.805-1(b)(1)-
can be made at
price (48 C.F.R.
(2))
fair market
§219.805-
price (48
1(b)(2)(A)-(B)).
C.F.R.
Otherwise
§19.805-
cannot be made
1(b)(1)-(2))
unless there is
not a
reasonable
expectation that
at least two
eligible 8(a)
firms will
submit offers
and the award
can be made at
fair market
price (48 C.F.R.
§19.805-1(b)(1)-
(2))
Inability to
Firm’s
Firm’s eligibility for
Firm’s eligibility for
Firm’s eligibility
Firm’s eligibility
protest eligibility eligibility for
award cannot be
award cannot be
for award
for award
for award
award cannot
challenged or
challenged or
cannot be
cannot be
be challenged
protested as part of
protested as part of
challenged or
challenged or
or protested
the solicitation or
the solicitation or
protested as
protested as
as part of the
proposed contract
proposed contract
part of the
part of the
solicitation or
award (48 C.F.R.
award (48 C.F.R.
solicitation or
solicitation or
proposed
§19.805-2(d))
§19.805-2(d))
proposed
proposed
contract
contract award
contract award
award (48
(48 C.F.R.
(48 C.F.R.
C.F.R.
§19.805-2(d))
§19.805-2(d))
§19.805-2(d))
Maximum of
Firm receives
Firm receives “a
Firm receives “a
Firm receives “a Firm receives “a
nine years in the “a program
program term of
program term of
program term
program term
8(a) Program
term of nine
nine years” but
nine years” but
of nine years”
of nine years”
years” but
could be terminated
could be terminated
but could be
but could be
could be
or graduated early
or graduated early
terminated or
terminated or
terminated or
(13 C.F.R. §124.2)
(13 C.F.R. §124.2)
graduated early
graduated early
graduated
One year extension
One year extension
(13 C.F.R.
(13 C.F.R.
early (13
available for firms
available for firms
§124.2)
§124.2)
C.F.R. §124.2)
participating in the
participating in the
One year
One year
One year
program from
program from
extension
extension
extension
March 13, 2020,
March 13, 2020,
available for
available for
available for
firms
firms
Congressional Research Service

49

SBA’s “8(a) Program”: Overview, History, and Current Issues

8(a) Firms
Category
Generally
Tribally Owned
ANC-Owned
NHO-Owned
CDC-Owned
firms
through September
through September
participating in
participating in
participating in
9, 2020
9, 2020
the program
the program
the program
from March 13,
from March 13,
from March
2020, through
2020, through
13, 2020,
September 9,
September 9,
through
2020
2020
September 9,
2020
One-time
Applies to
Applies only to
Applies only to
Applies only to
Applies only to
eligibility for
both
tribally owned firms,
ANC-owned firms,
NHO-owned
CDC-owned
8(a) Program
disadvantaged
not tribes (15 U.S.C. not ANCs (15
firms, not
firms, not
owners and
§636(j)(11)(B)-(C))
U.S.C.
NHOs (15
CDCs (15
firms (13
§636(j)(11)(B)-(C))
U.S.C.
U.S.C.
C.F.R.
§636(j)(11)(B)-
§636(j)(11)(B)-
§124.108(b))
(C))
(C))
Limits on the
No sole-
Can make sole-
Can make sole-
Can make sole-
Combined total
amount of 8(a)
source awards
source awards even
source awards even
source awards
of competitive
contracts that a
possible once
when a firm has
when a firm has
even when a
and sole-source
firm may receive the firm has
received combined
combined total of
firm has
8(a) contracts
received
total of competitive
competitive and
combined total
in excess of the
combined total and sole-source 8(a)
sole-source 8(a)
of competitive
dollar amount
of competitive
contracts in excess
contracts in excess
and sole-source
set forth in 13
and sole-
of the dollar amount of the dollar amount 8(a) contracts
C.F.R. §124.519
source 8(a)
set forth in 13
set forth in 13
in excess of the
not explicitly
contracts in
C.F.R. §124.519 (13
C.F.R. §124.519 (13
dollar amount
addressed in
excess of the
C.F.R. §124.519(a))
C.F.R. §124.519(a))
set forth in 13
regulation
dollar amount
Firms must receive
Firms must receive
C.F.R. §124.519
Firms must
set forth in 13
an increasing
an increasing
(13 C.F.R.
receive an
C.F.R.
percentage of
percentage of
§124.519(a))
increasing
§124.519 (13
revenue from non-
revenue from non-
Firms must
percentage of
C.F.R.
8(a) sources
8(a) sources
receive an
revenue from
§124.519(a))
throughout their
throughout their
increasing
non-8(a)
Firms must
participation in the
participation in the
percentage of
sources
receive an
8(a) Program (13
8(a) Program (13
revenue from
throughout
increasing
C.F.R. §124.509(b))
C.F.R. §124.509(b))
non-8(a)
their
percentage of
sources
participation in
revenue from
throughout
the 8(a)
non-8(a)
their
Program (13
sources
participation in
C.F.R.
throughout
the 8(a)
§124.509(b))
their
Program (13
participation in
C.F.R.
the 8(a)
§124.509(b))
Program (13
C.F.R.
§124.509(b))
Source: Congressional Research Service, based on 8(a) Program statutory and regulatory requirements.
a. The rules governing NHO- or CDC-owned firms do not address this issue, and although the general rules
apply where no “special rules” exist, it seems unlikely that NHO- or CDC-owned firms are treated
differently than tribally or ANC-owned firms in this regard.
b. These criteria include (1) the management experience of the disadvantaged individual(s) upon whom
eligibility is based; (2) the business’s technical experience; (3) the firm’s capital; (4) the firm’s performance
record on prior federal or other contracts in its primary field of operations; and (5) whether the firm
presently has, or can demonstrate its ability to timely obtain, the personnel, facilities, equipment, and other
resources necessary to perform contracts under Section 8(a).
Congressional Research Service

50

SBA’s “8(a) Program”: Overview, History, and Current Issues

Author Information

Robert Jay Dilger

Senior Specialist in American National Government

Acknowledgments
Kate Manuel, who has left CRS, authored a previous version of this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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Congressional Research Service
R44844 · VERSION 27 · UPDATED
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