Graduation Day From 8(a)

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

products and services. This is critical because while every agency must follow federal acquisition guidelines, buying trends and cycles vary within each agency. “Selling to the federal government is a very detailed process,” Dennis cautions. “The more time you spend learning how it buys goods and services, the better served your firm will be.”

STEP 3 — MARKET YOUR COMPANY.
Based in North Miami Beach, Florida, Solo Construction Corp. (No. 66 on the BE INDUSTRIAL/SERVICE 100 list) has been an 8(a) firm for two years although CEO Randy Pierson has yet to receive a single contract as a result of his certification. The concern, which has been in business for 20 years, had revenues of $32.6 million in 1996. “We’ve had a problem here in that there’s not enough 8(a) work available,” says Pierson. “We’re in the process of being considered for some, but none of that has become real yet.”

Pierson believes the problem is twofold. First, Solo is extremely specialized in that it primarily does heavy construction work such as roads, highways, bridges and underground utilities. Since fewer opportunities for such projects are available, it means fewer of those contracts are available to 8(a) participants. Second, and perhaps most important, Pierson believes he dropped the ball by not fully marketing his company to potential clients.

“A lot of people expect once you’re certified the work will come pouring in, but it doesn’t work like that
,” he says. “You’ve got to go out to the agencies and really market your company. Find out what their budgets are and what they’re looking for. If you find out what they’re going to be building in the next fiscal year, you can earmark a project you think will be of interest to you.” And what does this have to do with graduating from the program? Success breeds success. This will also endear your smaller concern to larger enterprises that you can collaborate with after graduation.

STEP 4 — NEVER PUT ALL YOUR EGGS IN THE 8(A) BASKET.
One misconception is that 8(a) companies can bid only for 8(a)contracts while in the program. Wrong. The agency strongly encourages businesses to establish non-8(a) contracts while still in the program. The only requirement is that at least 51% of the business must be owned by a U.S. citizen who has been determined to be socially and economically disadvantaged.

“Many companies go into the program believing that set-asides are the only way they can do business,” says Handy. “While the program was very supportive in that it helped us survive and grow, it can be damaging if you depend on it too much.”

With that in mind, the SBA recently initiated steps to ensure 8(a) doesn’t become a crutch for small businesses that would be more of a hindrance than a help. One of the new rules states 8(a) firms must start identifying non-8(a) commercial opportunities by the fifth year of the program. By the end of year five, 15%20% of revenues should come from non8(a) accounts. And by the final year, that percentage should

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