How 8a Certification Helps Small Businesses in the Construction industry


If you own a small business in the construction industry and are worried about competing with big companies, 8a certification can give you a competitive edge.

8a certification is an invaluable asset to small businesses in the construction industry, providing them with increased opportunities for growth, improved access to capital and credit, enhanced credibility and visibility in the industry, and more business growth potential. With 8a certification, small businesses can establish a competitive edge over their larger counterparts, enabling them to succeed and thrive in the construction industry.

Let’s take a closer look at how 8a certification can help small businesses in the construction industry.

How it Helps Small Businesses in the Construction Industry

8a certification is a program run by the Small Business Administration (SBA) that provides special assistance to small disadvantaged businesses. It can help Small businesses in the construction industry in a number of ways.

Small Business Only

The 8a certification program is only open to small businesses. Larger businesses are not eligible to participate in the program.

This helps ensure that smaller businesses have a fair chance to compete for government contracts and business opportunities, without which they wouldn’t have been able to win without the program.

Socially and Economically Disadvantaged persons

 The 8(a) Program is typically only available to socially and economically disadvantaged persons. To be economically disadvantaged, an individual’s net worth must be less than $750,000 (not including ownership interest in the applicant’s business, equity in their primary personal residence, and funds invested in an official retirement account), they cannot have more than $350,000 in average adjusted gross income over the last three years, and no more than $6 million in assets (excluding retirement account funds).

It helps create opportunities for those businesses that may have a harder time accessing capital or other resources due to their background. This can be beneficial for small businesses that are owned by women, veterans, minorities, or any other disenfranchised groups.

Encourage New Small Business

The 8a certification not only encourages the development of new small businesses but also prevents organizations from reapplying if they have already been certified or have participated in the program before. This way, newcomers to the program are given a chance to apply and be successful.

Long-Term Contract

The 8(a) program is a nine-year program designed to support firms owned and controlled by socially and economically disadvantaged individuals. This help allows businesses to form stable, lasting relationships with the government and grow their business over time.

With this assistance, businesses can confidently bid on larger contracts and know that they will have the support they need to complete them successfully.

US Citizens Only

To be eligible for 8a certification, companies must be majority-owned and controlled by U.S. citizens or permanent residents. This ensures that the businesses awarded contracts are local and are contributing to the economy of the United States.

Applicants who identify as African-American, Native American, Hispanic American, Asian Pacific American, or Subcontinent Asian American are traditionally disadvantaged, but other individuals may also apply if they can prove social disadvantage through gender identity, disability status, ethnic origin race long-term residence outside of society or other qualifying factors.

Federal Government Contract

The 8a certification program provides access to federal government contracts that are typically reserved for larger, more established businesses. This helps level the playing field and encourages competition among small companies.

Small businesses can also use this program as a way to get their foot in the door when competing with larger businesses and increase their chances of success in the market.

Limited Competition

Only 6,500 out of 24 million businesses in the USA have obtained their 8a certification, which limited the field of competition for those bidding on federal contracts.

Consequently, 5% of all federal spending is earmarked for 8(a) firms–this equates to more than $34 billion annually! On average, this amounts to over $4 million per year in federal spending per firm.

Joint Venture/ Mentor-Protege programs

The 8a certification program also offers joint venture and mentor-protégé programs. The joint venture allows two or more companies to form a partnership in order to work on government contracts.

The mentor-protégé program pairs 8a certified businesses with larger companies for a period of time. This offers an opportunity for the smaller business to learn from the larger one and gain valuable experience.

Training and Development

The 8a program also provides training and development for small businesses. To participate in the program, businesses must complete a comprehensive business plan that includes financial projections as well as marketing plans. This helps to ensure that the businesses are prepared to compete effectively when they enter the federal contracting market.

Special Awards

The 8a certification program presents different award opportunities to small businesses that have been certified. These awards can help you bid on larger and more profitable contracts, which could ultimately help your business succeed in the long run.

For example, a set-aside award is an 8a contract in which only certain contractors may apply, whereas a sole-source award is a contract that is proposed for the award without competition.

In FY2020, 8(a) firms were awarded $34.0 billion in federal contracts, including $9.3 billion in 8(a) set-asides and $11.1 billion in 8(a) sole sources. Other programs provide similar assistance to small businesses owned by women, veterans with disabilities from their service, or those based within economically disadvantaged areas (‘HUBZone’).

Construction Contractor Friendly

The 8(a) program also offers assistance to construction contractors. Construction projects require a lot of paperwork, so 8(a) firms have access to resources that help them streamline the process and avoid costly delays. In addition, the SBA provides specialized technical support for small businesses bidding on construction contracts. This includes mentoring services and business development advice customized to each contractor’s unique needs.

Financial Assistance

The 8(a) program provides financial assistance to small businesses in the form of direct and indirect loans. They can also take advantage of loan guarantees and other beneficial programs that provide them with extra resources and support when they need it most. This can have a major impact on their ability to compete in the market against larger, more established companies.

Valet Works: An 8-a Certifed Government and Commercial Builder

Valet Works is an 8(a) certified government and commercial builder that can help you complete your construction project with ease. Our team of experts is dedicated to providing the highest quality service and results while staying within budget and adhering to all applicable regulations.

Plus, our 8(a) status makes us eligible for special awards that can help you get the best value for your project. Contact us today to learn more about our services and how we can help you turn your construction dreams into reality. Let Valet Works be your trusted partner in construction!

Scroll to Top