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Answers to The Most Common 8(a) Questions

We get calls all the time from people and companies interested in registering for the Federal 8(a) Business Development program. Here are some of the most common questions about the 8(a) program. These are just some of the things you have to think about when looking to get 8(a) Certified, but they are some of the most common issues that come up with our clients and potential clients.

1. Can I get an 8(a) if I just started my business

By regulation, yes, but as a practical matter, no. By regulation you can file an 8(a) application immediately on starting a new business. But there is generally a requirement that demands two years of business history. You can request a waiver of that requirement, but in our experience those waivers are rarely if ever granted. We generally recommend that you file after two years of business. Waiting out the two years means you don’t have to request a waiver, which vastly simplifies the process. It also means you can address other issues you might have if you file right when you start the business. For example, the “full time working” for the 8(a) requirement, and the “more than one client” requirement.

2. My firm has one client, can I get my 8(a)?

No. You have to have no more than 70% of your revenue from any single client. SBA will accept evidence that you are soon going to have more than one client if you’ve just signed a contract for your second client, but generally, you should have two clients.

That also means that if you have just set up your consulting company, and you’re working for your former employer, you won’t meet this requirement. The 8(a) program is designed for companies, not for consultants who have decided it would be better to consult as a 1099. If you want to be 8(a) registered, go find more work, stop working on-site as a direct bill, and develop your business. It will be easier for you to successfully register as an 8(a), and you will be more successful in general as you develop your federal contracting business.

3. Does my husband’s / wife’s salary count towards my annual income?

Maybe. Does your spouse work in the 8(a) or has your spouse contributed to the 8(a)’s development, either as an officer, a director, a landlord, a client, or an employee? If so, your spouse’s salary may count towards your annual income. If not, it likely won’t.

4. I’m working full-time and have just started this business, can I get 8(a) certified?

No. You have to be working full-time for the 8(a), and while there are occasionally cases that suggest that your full-time 8(a) work could, maybe, not be 9-5, the general rule is that you have to work 9-5 for the 8(a) certified company.

This relates back to the question about having more than one client and the “I just set up the business” question. The 8(a) program is designed for small but growing businesses, not for consultants and not for startups. You’re better off focusing on growing your business so you can quit your full-time job and join that business, then applying for 8(a).

5. Does an 8(a) Certification mean I will get money from the Federal Government?

I’m surprised that we sometimes get this question. The answer is a resounding “No.” The 8(a) program is not a grant or a loan program. It is a certification program that will make your business more competitive in seeking out and winning federal contracts. BUT, being 8(a) certified doesn’t mean you get any contracts. It means that you should go out and find work, go out and develop business, and apply to win the contracts that you are entitled to compete for as a result of your certification status.

 

For more information about becoming 8(a) certified, contact us today.