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