SBA 8(a) Firms Are Ready in Times of Crisis

April 15, 2020 Author: Roy Eduardo Kokoyachuk

During times of crisis, Federal contracts must be awarded as quickly and efficiently as possible. Federal contracting, however, is deliberately slow to ensure public funds are spent responsibly. There are, of course, contract vehicles that allow for quick awards during emergencies. But, these vehicles are generally limited to specific areas deemed critical when a disaster is declared. The pool of vendors who bid on these projects isn’t necessarily pre-screened, which would help determine their ability to meet the needs of the award.

With a crisis like COVID-19, the range of services needed quickly by the Federal Government is wide-ranging and ever-growing. The SBA’s 8(a) federal contracting program for small disadvantaged businesses can fill many of these critical needs in a fast, efficient, and cost-effective manner.

8(a) Firms are Ready

SBA 8(a) contractors are pre-screened and can be awarded contracts immediately on a sole-source basis. The 5,800 8(a) certified firms in the United States are stress-tested every year to ensure they have the resources to perform on potential contracts. This saves a lot of time and removes ambiguity about the firm’s capabilities.

For example, one industry that has seen increased demand during the current crises is Information Technology. The need for IT services has skyrocketed as more Americans shift from in-person communication to working remotely. Fortunately, the GSA 8(a) STARS II (Streamlined Technology Acquisition Resources for Services) contract has hundreds of well-qualified firms ready to step in and deliver those services. If fact, 8(a) firms are represented in every industry powering the economy and responding to this crisis, from medical services and emergency response to public information message testing and dissemination.

Ease of Contracting

Since the SBA has done the work of screening potential vendors, the 8(a) program is one of the fastest federal contract vehicles available. While standard contracting can take months to award (longer if there’s a protest), 8(a) Sole-Source contracts can be awarded immediately and require very few steps.

Steps to sole-source an 8(a) contract:

  1. The Government program manager develops a statement of work, prepares a cost estimate, and allocates the necessary funding.
  2. The program manager chooses an 8(a) firm to fulfill the needed service and submits a procurement request to their assigned contracting officer.
  3. The contracting officer loops in the SBA and sends an “Offer Letter” to the 8(a) company.
  4. The SBA processes the Offer Letter and returns it to the agency’s contracting officer.
  5. The contracting officer submits a Statement of Work or Performance Work Schedule and a Request for Proposal or Price Quote to the 8(a) firm.
  6. The 8(a) firm submits their response, which is evaluated and negotiated (if necessary) by the agency.
  7. The contract is awarded.

As a bonus, federal agencies get credit for work they issue to an 8(a) Disadvantaged Small Businesses. Win, win.

Small Businesses Create Jobs

Small businesses create 64% of new jobs in the United States. Minority-owned businesses, the most likely to take part in the 8(a) program, create nearly five million of those jobs. They are also among the firms that would most benefit from government contracts during a crisis since they can usually sustain their operations and staff with smaller dollar amount contracts. Awards can be made, however, for contracts of up to $4 million for goods and services and $6.5 million for manufacturing. Funds earned by 8(a) firms are more likely to be spent in their communities as opposed to being paid out as dividends to shareholders or invested overseas.

America’s economy is suffering. Quick action, however, can mitigate many of the adverse effects. As the Federal government rolls out its response to the crisis, it can count on its pool of 8(a) firms to deliver the goods and services the country needs.