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Friday, April 2, 2010

The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues

John R. Luckey
Legislative Attorney

Kate M. Manuel
Legislative Attorney

This report provides an overview of the Small Business Administration's (SBA's) Minority Small Business and Capital Ownership Development Program. Based upon authorities given to the SBA by Sections 7(j) and 8(a) of the Small Business Act of 1958, as amended, this program is commonly known as the "8(a) Program." The 8(a) Program provides participating small businesses with training, technical assistance, and contracting opportunities in the form of setasides and sole-source awards. A "set-aside" is an acquisition in which only certain contractors may compete, while a sole-source award is a contract awarded, or proposed for award, without competition. Eligibility for the 8(a) Program is generally limited to small businesses "unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States" that demonstrate "potential for success." However, small businesses owned by Indian tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs), and Community Development Corporations (CDCs) are eligible for the 8(a) Program under somewhat different terms. In FY2008, 9,462 firms participated in the 8(a) Program, and the federal government spent $6.3 billion on contracts with 8(a) firms. 

The report surveys the historical development of the 8(a) Program, as well as the legal requirements presently governing (1) eligibility for the 8(a) Program, (2) set-asides and solesource awards under Section 8(a), and (3) related matters. It also discusses potential developments in the 8(a) Program in light of recently proposed legislation, changes in executive branch policies, and legal challenges and decisions. It includes the changes that SBA proposed to the regulations governing the 8(a) Program on October 28, 2009. 

The 111th Congress is considering several bills that would modify various aspects of the 8(a) Program or otherwise promote contracting with 8(a) firms (e.g., H.R. 456, H.R. 2200, H.R. 2299, H.R. 2682, H.R. 3326, H.R. 3771, H.R. 4220, H.R. 4253, H.R. 4818, S. 1167, S. 2862).

Date of Report: March 18, 2010
Number of Pages: 42
Order Number: R40744
Price: $29.95

Document available electronically as a pdf file or in paper form.
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