8(a) Business Development Program
The 8(a) Business Development (BD) Program is part of the Small Business Act, and is intended to encourage the development of small businesses by assisting them in competing in the marketplace. Named for the applicable section of the Act, the 8(a) BD program is designed to assist small businesses in gaining a foothold in the Federal procurement arena, while encouraging both commercial development and eventual graduation beyond 8(a) status. Qualifying 8(a) companies have access to sole-source government contracts, the ability to form teams and partnerships to bid on larger contracts, mentoring, government loans, and other assistance. The 8(a) BD program is a one-time, temporary status that is designed to result in companies graduating from that status to compete in the regular procurement market. A number of current government contracting companies began under the 8(a) aegis.
In order to qualify as 8(a), a company must be owned and controlled by an individual who is a member of a socially and economically disadvantaged group or who can demonstrate evidence that he or she is economically and socially disadvantaged. Disadvantaged groups include ethnic minorities, gender-bias, physical handicap, long-term residence in an environment that is isolated from the mainstream of American society, or similar causes. Additionally, the owning individual must demonstrate economic disadvantage by providing a narrative and corroborating financial documents about their income, assets, and net worth.
The Historically Underutilized Business Zones (HUBZone) Empowerment Contracting program was enacted into law as part of the Small Business Reauthorization Act of 1997. The primary purpose of the HUBZone program is to revitalize depressed economic areas by encouraging the growth of businesses in the area. Businesses that obtain HUBZone certification are eligible for preferential access to Federal procurement opportunities.
To qualify for the HUBZone program, a business must be a small business by the definition of the Small Business Administration (SBA). It must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe. Its principle office and at least 35% of its employees must be located in a HUBZone. This would lead to more corporate and income tax money going to those distressed areas. The SBA website has a page containing HUBZone Maps which can be used to determine if your business or your employees are within a qualifying area.
Indian Incentive Program
The Indian Incentive Program (IIP) is a congressionally sponsored program that provides a 5% rebate back to the prime contractor on the total amount subcontracted to an Indian-Owned Economic Enterprise or Indian Organization, in accordance with DFARS Clause 252.226-7001. Through the generation of subcontracts to the above mentioned entities, the IIP fulfills its purpose as an economic multiplier for Native American communities. Department of Defense (DoD) prime contractors, regardless of size of contract, as well as sub-tier contractors who subcontract to an Indian-owned firm, are eligible for incentive payments.
For Native American businesses, the following requirements must be met in order to participate in the Indian Incentive Program:
- 51% Native American/Alaskan/Hawaiian Ownership—Indian ownership of the subcontractor or supplier cannot constitute less than 51% of the enterprise.
- Federally Recognized Tribal Enrollment:
- Native American—The subcontractor or supplier must be owned by a federally recognized tribe or a member of a federally recognized tribe.
- Native Alaskan—The subcontractor or supplier must be owned by a “native,” “native village,” or “native group” (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined by the Alaska Native Claims Settlement Act.
- Native Hawaiian—The owner of the Native Hawaiian-Owned subcontractor or supplier must be a recognized Native Hawaiian as defined by 23 USC 4221(9).
Service-Disabled Small Business Program
The Veteran's Benefits Act of 2003 established a procurement program for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC). This program sets aside 3% of all Federal prime contract and subcontract awards for sole-source or set-aside contracts to businesses owned and operated by veterans that became disabled during their military service. The purpose of this program is to assist veterans who have become disabled to establish their own businesses.
In order to be eligible for the SDVOSBC, the business must be owned by a Service-Disabled Veteran (SDV) that has a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense. The business must qualify as "small" under the North American Industry Classification System (NAICS) code assigned to the procurement. The SDV must own at least 51% of the business, and must control the management and operation of the business. The SDV must hold the highest officer position in the business. In the case of a severely and permanently disabled veteran, the veteran's spouse or permanent caregiver can control the management and daily operations of the business.
Woman-Owned Small Business Program
The Woman-Owned Small Business (WOSB) Federal contract program is designed to encourage and assist women to become business owners. Businesses that qualify for this program can apply for certain government contracts that have been designated as being restricted to WOSBs or Economically Disadvantaged WOSBs (EDWOSBs).
In order qualify as a WOSB, a business must be at least 51% owned and operated by women who are U.S. citizens. The business must qualify as a "small" business in its primary industry, as defined by the rules of the SBA for that industry. In order to qualify as an EDWOSB, a business must demonstrate economic disadvantage in addition to the other requirements for a WOSB.