| Q: A friend told me that as a woman of Native | | | | disadvantaged businesses; 5 percent of prime |
| American descent I might be eligible for a | | | | and subcontracts for women-owned small |
| special SBA program that will help me start a | | | | businesses; 3 percent of prime contracts for |
| small business. He said I could compete for | | | | HUBZone small businesses; and 3 percent of |
| government contracts through this program. | | | | prime and subcontracts for service-disabled |
| Can you tell me what SBA program he's | | | | veteran-owned small businesses. |
| referring to? | | | | |
| | | | A HUBZone (Historically Underutilized |
| -- Clara P. | | | | Business Zone) is a designated area within |
| | | | urban and rural communities that has been |
| A: Your friend is probably referring to the | | | | given preferential contract award |
| Small Business Administration's (SBA) 8(a) | | | | consideration in an effort to stimulate |
| Business Development (BD) Program. The 8(a) | | | | economic development. A company may qualify |
| Program (named after the section of the Small | | | | for HUBZone status if it is owned or |
| Business Act from which it comes) is an SBA | | | | controlled by one or more U.S. citizens, has |
| program created to help small disadvantaged | | | | at least 35 percent of employees who live |
| businesses better compete in the U.S. | | | | within the designated zone, and has a |
| marketplace and within the arena of | | | | principal office located there. HUBZones are |
| government procurement. The SBA provides | | | | a whole 'nother topic that we can discuss at |
| business development, technical assistance | | | | another time. Suffice it to say that a |
| and other services to the small businesses | | | | company that obtains both 8(a) and HUBZone |
| that are accepted into the 8(a) program. | | | | status may be entitled to double dip in the |
| | | | government procurement trough, that's why you |
| The 8(a) program is reserved for what the SBA | | | | often find a number of 8(a) companies |
| calls "socially disadvantaged individuals." | | | | specifically moving into HUBZone areas to |
| Socially disadvantaged individuals are | | | | take advantage of the perks both programs |
| defined as those who have been subjected to | | | | offer. |
| racial or ethnic prejudice or cultural bias | | | | |
| because of their membership in a | | | | The U.S. government purchases billions of |
| disadvantaged group. | | | | dollars in goods and services every year, |
| | | | everything from staples to those wonderfully |
| The SBA has designated the following groups | | | | expensive toilet seats. Obtaining 8(a) status |
| as socially disadvantaged: | | | | allows small businesses to compete for a |
| | | | portion of that business. |
| Black Americans Hispanic Americans Native | | | | |
| Americans (Native American Indians, Eskimos, | | | | The basic requirements for applying for 8(a) |
| Aleuts, and Native Hawaiians) Certain Asian | | | | status are your company must be a small |
| Pacific Americans Other individuals who can | | | | business as defined by the SBA, must be owned |
| prove that they meet the SBA's criteria to be | | | | and controlled by one or more socially and |
| considered socially disadvantaged | | | | economically disadvantaged individuals who |
| | | | are U.S. citizens, and must show a potential |
| One point where your friend is incorrect is | | | | for success. The SBA defines a small business |
| that the 8(a) program is for new companies. | | | | as "one that is independently owned and |
| The 8(a) program is primarily for companies | | | | operated, is organized for profit, and is not |
| that have been in business for a minimum of | | | | dominant in its field." |
| two years, though that rule may be waived if | | | | |
| your company is able to meet some pretty | | | | As expected, the 8(a) program has its fans |
| strict management, financial, and performance | | | | and its detractors. It's fans are those |
| criteria. | | | | companies that obtain 8(a) status and thereby |
| | | | get preferential treatment when competing for |
| Obtaining 8(a) status is no guarantee that a | | | | government procurement contracts. |
| company will be successful in obtaining | | | | |
| government or other contracts, but it | | | | The program's detractors are typically those |
| certainly doesn't hurt. The Small Business | | | | companies that fail to obtain 8(a) status or |
| Act mandates that all small businesses have | | | | that do not meet the definition of socially |
| the opportunity to provide goods and services | | | | disadvantaged, i.e. businesses owned my white |
| to the U.S. government. To help ensure that | | | | American males (that's a can of worms we |
| mandate, the SBA negotiates annual | | | | won't open this week). |
| procurement preference goals with every | | | | |
| Federal agency and reviews each agency's | | | | You can learn more at the SBA's website |
| results to make sure the goals were met. | | | | (sba.gov) or by calling your local SBA |
| | | | office. |
| The statutory goals are: 23 percent of all | | | | |
| prime contracts go to small businesses; 5 | | | | Here's to your success! |
| percent of prime and subcontracts for small | | | | |