R48190 — SBA’s 8(a) Business Development Program: Structure and Current Issues

To address discriminatory barriers in federal procurement markets for certain business owners, Congress has sought to help small “socially and economically disadvantaged” businesses through the 8(a) Business Development Program. Statutory authority for the program is contained in Sections 7(j), 8(a), and 8(d) of the Small Business Act. The program was explicitly authorized by the 1978 amendments to the Small Business Act, although program activities were previously conducted through Small Business Administration (SBA) regulations. For eligible businesses, the 8(a) program creates federal contracting preferences, such as contract set-asides and sole-source contracts. In addition to contracting preferences, the program provides participants with business development support, including mentorship, training, and counseling. These services are intended to enhance participants’ competitiveness and their long-term viability as businesses. A business may participate in the program for a total of nine years. A participating business may “graduate” from the program by reaching its business development goals or may exit the program after nine or fewer years. Once a participant has left the program, neither the firm nor the owner of that firm is eligible to participate in the program again. Although many program firms are owned by socially and economically disadvantaged individuals, participating businesses may also be owned by socially and economically disadvantaged groups, including an Alaska Native Corporation (ANC), Native Hawaiian Organization (NHO), Community Development Corporation (CDC), or Indian tribe. Firms owned by ANCs, CDCs, NHOs, and Indian tribes are governed by many of the same regulations as other 8(a) firms but also have unique program benefits and requirements. For example, group-owned firms may receive sole-source awards in excess of the cap on such awards for individually owned firms ($5.5 million or $8.5 million for manufacturing contracts). The SBA accepts procurements from other federal agencies and may then award contracts to program participants through either a set-aside or a sole-source award, typically depending on the value of the contract award. Agency purchasing officials may choose to award contracts under this program in order to reach annual statutory goals for contracting with small socially and economically disadvantaged businesses. Of recent issues affecting the 8(a) program that may be of interest to Congress are a 2023 legal challenge to SBA’s interpretation of social disadvantage when reviewing program applications, program eligibility oversight, and the status of group-owned firms relative to individually owned ones. This report provides an overview of 8(a) program eligibility and participation requirements, contracting preferences and business development resources for 8(a) program participants, as well as SBA’s administration of the program. It also briefly introduces issues of congressional interest.

Curated by CRS — every bill listed in this report's relatedMaterials. Edge type cited_in_report, gold confidence.

• HR 8511 — Ending Discrimination in Government Contracting Act · 119th Cong
• S 4390 — Ending Discrimination in Government Contracting Act · 119th Cong