GUAM – Successfully competing for Department of Defense and other U.S. Federal Government contracts need not be overwhelming. With the largest U.S. military buildup since World War II already underway in Guam, now is the time for local small businesses to take that first step towards qualifying for lucrative government work.
The series Federal Government Contracting 101 will demystify the seemingly overwhelming process of searching out government contracts and obtaining them. In Volume 1: Not Just for the Big Guys, GuamBuildupNews.com examined how the federal government sets aside certain contracts for small business owners and others.
Volume 2: What is an 8(a) Contractor or an 8(a) Set Aside?
To improve the volume of small business government contracting, some government agencies set aside a significant number of contracts that are exclusive to small businesses. These small business set-aside contracts exclude large businesses, opening wider the door for small businesses.
The U.S. Small Business Administration (SBA) defines a small business in its publication Small Business Size Standards. The SBA determines the maximum small business size by revenue or number of employees. To see if your business qualifies as a small business according to SBA guidelines, visit the SBA’s Table of Small Business Size Standards.
The 8(a) Business Development Program
The 8(a) program is designed to mentor and guide small businesses that wish to enter the world of government contracts. The program spans nine years, including a four-year development state and a five-year transition state.
Businesses in the program must undergo annual reviews, business planning, and systematic evaluations. The SBA provides specialized training, counseling, marketing assistance, and executive development to participants, and it also assists with accessing surplus government property and supplies.
Before applying for the 8(a) Program, the SBA encourages individuals to take an online training and self-evaluation course at the following site 8(a) Business Development Program Suitability.
If you are unsure whether your business would qualify for the 8(a) program or if you are unsure whether the 8(a) program is right for your business, the SBA offers an 8(a) Business Development Program Suitability Tool that will ask questions that will determine whether the 8(a) program is right for your business.
Generally, you may qualify for 8(a) certification if:
• The SBA considers you to be socially disadvantaged because you are Asian Pacific American — the majority of U.S. citizens on Guam qualify since most are Chamorro, Filipino and other American minority groups with Pacific Island and Asia roots. Other groups in this category are African-American, Hispanic American, American Indian, Eskimo, Aleut, or Native Hawaiian, and Subcontinent American; and
• Your business is run primarily (at least 51 percent) by a socially disadvantaged individual (for example, this applies to Guam’s Chamorros, Filipinos, Pacific Islanders and Asians with U.S. citizenship) or by an economically disadvantaged individual; and
• Your net worth (excluding business and primary residence) is $250,000 or less; and
• You have been in business for more than two years; and
• You offer a product or service needed by the government; and
• You can demonstrate effective management; and
• You meet specific size standards per SBA’s Small Business Size Standards.
8(a) Set Asides
Contracts specified as 8(a) set asides are part of the business development program for small disadvantaged businesses. Federal agencies offer 8(a) contracts, which are open only to 8(a) certified small businesses. Since the 8(a) program is a nine-year program, there is a small window of opportunity to apply for 8(a) contracts, and the pool of businesses is constantly changing. Only those small businesses within the 8(a) program may bid on 8(a) contracts.
Assistance on Guam
Small businesses that are 8(a) certified can look forward to many opportunities to participate in the multi-billion-dollar military construction program for the current Guam buildup. Guidance, workshops and assistance with qualifying for 8(a) status and federal set aside contracts are available through the Guam Procurement Technical Assistance Center (PTAC).
The Guam PTAC was established on October 1, 2008 and is funded in part by the Defense Logistics Agency. PTAC provides services needed to ensure that Guam small businesses are competitive in the local and federal marketplace. The center is staffed with trained professionals in business and government and is hosted by the University of Guam School of Business and Public Administration. For more information, call (671) 735-2552.
Sharla Torre Montvel-Cohen contributed to this story.