Graduation Day From 8(a)

Here are the steps you need to follow to survive the SBA program

firms employed more than 158,000 workers and received $5.3 billion in federal procurement awards. So, for many black-owned firms, it’s a wild ride worth taking. By following some commonsense approaches, such as doing your homework and developing strategic relationships with large companies, you can greatly increase the odds of your company’s future success. But you have to start mapping our your winning game plan. and the game starts well before your company becomes an 8(a) enterprise.

The SBA 8(a) program is a business development program designed to assist small firms to reach a point of “self-sufficiency and competitive viability” by obtaining federal government contracts, according; to the fact sheet issued by the SBA. Under the program, the SBA aces as a prime contractor and enters into various types of government contracts, including supply, services, construction, and research and development, with other government agencies. It then negotiates subcontracts for performance with small companies in the 8(a) program. To be an eligible participant, the company must be owned by an individual termed to be “socially disadvantaged.” This designation includes African Americans, Hispanics and Native Americans, among others. Every program participant is admitted for a nine-year term. That term consists of a four-year developmental stage and a five-year transitional stage.

For many, the move away from 8(a) is a difficult transition to make. Handy says her company struggled greatly to stay afloat after leaving the program. Her transition was turbulent despite being savvy enough to make sure only half of the business she did while in the program was 8(a)-related. The other business Tresp acquired was via open-bid or commercial contracts. Despite some forethought, Handy says she still rode through choppy wafers for some time.

“It was a difficult adjustment. Once you’re out of 8(a), chose contracts are no longer available, and it’s tough to adapt [to no longer having access to 8(a) contracts],” says Handy. “We lost a third of our staff, and that was substantial because we couldn’t continue to compete for contracts we’d had for eight years or more.”

To compensate, Handy did exactly what SBA officials say is critical — she relied heavily on the business connections she established while in the 8(a) program. “We knew those relationships would be key in these years, and we’ve taken advantage of them. Now we have connections with major corporations,” she says. “We’re just beginning to see the light of day again where it’s starting to look promising.” Today, Tresp’s major client base includes Lockheed Martin and NationsBank. They’re also automating the electric utility company in Dakar, Senegal. Handy estimates her company’s revenues at $16-$17 million for 1997.

Long before certification, entrepreneurs must take the time to thoroughly understand the federal marketplace, says Darryl Dennis, SBA’s counselor to the administrator. He recommends that CEOs begin this process by attending the numerous SBA-sponsored workshops held at business information centers throughout the country. He also suggests entrepreneurs personally visit the federal agencies to which they’re considering marketing their companies,

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