SBA’s 8(a) Business Development Program: Structure and Current Issues
Congressional research reportMay 15, 2026
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SBA’s 8(a) Business Development Program:
Structure and Current Issues
Updated May 15, 2026
Congressional Research Service
https://crsreports.congress.gov
R48190
SUMMARY
SBA’s 8(a) Business Development Program:
Structure and Current Issues
To address discriminatory barriers in federal procurement markets for certain business owners,
Congress has sought to help small “socially and economically disadvantaged” businesses through
the 8(a) Business Development Program. Statutory authority for the program is contained in
Sections 7(j), 8(a), and 8(d) of the Small Business Act. The program was explicitly authorized by
the 1978 amendments to the Small Business Act, although program activities were previously
conducted through Small Business Administration (SBA) regulations.
R48190
May 15, 2026
R. Corinne Blackford
Analyst in Small Business
and Economic
Development Policy
For eligible businesses, the 8(a) program creates federal contracting preferences, such as contract set-asides and sole-source
contracts. In addition to contracting preferences, the program provides participants with business development support,
including mentorship, training, and counseling. These services are intended to enhance participants’ competitiveness and
their long-term viability as businesses. A business may participate in the program for a total of nine years. A participating
business may “graduate” from the program by reaching its business development goals or may exit the program after nine or
fewer years. Once a participant has left the program, neither the firm nor the owner of that firm is eligible to participate in the
program again.
Although many program firms are owned by socially and economically disadvantaged individuals, participating businesses
may also be owned by socially and economically disadvantaged groups, including an Alaska Native Corporation (ANC),
Native Hawaiian Organization (NHO), Community Development Corporation (CDC), or Indian tribe. Firms owned by
ANCs, CDCs, NHOs, and Indian tribes are governed by many of the same regulations as other 8(a) firms but also have
unique program benefits and requirements. For example, group-owned firms may receive sole-source awards in excess of the
cap on such awards for individually-owned firms ($5.5 million or $8.5 million for manufacturing contracts).
The SBA accepts procurements from other federal agencies and may then award contracts to program participants through
either a set-aside or a sole-source award, typically depending on the value of the contract award. Agency purchasing officials
may choose to award contracts under this program in order to reach annual statutory goals for contracting with small socially
and economically disadvantaged businesses.
Of recent issues affecting the 8(a) program that may be of interest to Congress are a 2023 legal challenge to SBA’s
interpretation of social disadvantage when reviewing program applications, program eligibility oversight, and the status of
group-owned firms relative to individually owned ones.
This report provides an overview of 8(a) program eligibility and participation requirements, contracting preferences and
business development resources for 8(a) program participants, as well as SBA’s administration of the program. It also briefly
introduces issues of congressional interest.
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SBA’s 8(a) Business Development Program: Structure and Current Issues
Contents
Introduction ..................................................................................................................................... 1
Program Structure............................................................................................................................ 1
Program Applicant and Participant Requirements .................................................................... 1
Program Eligibility Requirements ...................................................................................... 1
Program Features Unique to Group-Owned Firms ............................................................. 3
Program Participation Requirements .................................................................................. 4
Contracting Preferences for Program Participants .................................................................... 6
Set-Asides and Sole-Source Awards ................................................................................... 6
Business Development Resources for Participants ................................................................... 8
Technical Assistance Through the Empower to Grow Program ......................................... 8
SBA Mentor-Protégé Program ............................................................................................ 9
8(a) Program Administration ................................................................................................... 10
Procurement Through 8(a) Mechanisms ............................................................................ 11
Federal Agency Discretion to Use the 8(a) Program ............................................................... 12
Congressional Issues ..................................................................................................................... 13
Changes to Presumption of Social Disadvantage .................................................................... 13
Program Eligibility Oversight ................................................................................................. 14
Social Disadvantage ................................................................................................................ 15
Group-Owned Firm Status and Benefits ................................................................................. 16
Tables
Table 1. 8(a) Contract Award Method by Award Value Threshold ................................................. 11
Appendixes
Appendix A. Eligibility Requirements for 8(a) Firms ................................................................... 17
Appendix B. Participant Reporting Requirements ........................................................................ 24
Contacts
Author Information........................................................................................................................ 25
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SBA’s 8(a) Business Development Program: Structure and Current Issues
Introduction
Through the 8(a) Business Development Program,1 the Small Business Administration (SBA)
accepts procurements from other federal agencies and subcontracts agency requirements to small
businesses owned and controlled by socially and economically disadvantaged individuals and
entities.2 In addition to the federal contracting set-asides and sole-source awards for which the
program is best known, the program provides participants with business development support,
including mentorship, training, and counseling. These services are intended to enhance
participants’ competitiveness and their long-term viability as businesses. This report reviews the
general program structure and its implementation, including the application process and
participation requirements, and benefits and resources for firms accepted into the program. It also
presents issues of potential congressional interest. A detailed history of the program’s evolution is
available in CRS Report R44844, SBA’s 8(a) Business Development Program: Legislative and
Program History.
Program Structure
Program Applicant and Participant Requirements
Program participation involves a significant application process, completed through SBA’s
Certify platform at certify.sba.gov. The SBA revised and streamlined the 8(a) Program’s
application process in 2016 by accepting online applications only (hard copy applications are no
longer accepted).3 Once accepted, program participants must submit a variety of information to
SBA as part of an annual review process. More information on participant reporting and annual
review requirements is available in Appendix B.
Program Eligibility Requirements
Detailed statutory and regulatory requirements govern 8(a) program eligibility. These
requirements are generally the same for all 8(a) firms, although there are instances where there
are “special rules” for group-owned 8(a) firms, or firms owned by the following types of entities:
Community Development Corporations (CDCs), Alaska Native Corporations (ANCs), Native
Hawaiian Organizations (NHOs), and federally recognized Indian Tribes.4 Appendix A provides
detailed program eligibility criteria. In general, eligible firms
1
The program is named for Section 8(a) of the Small Business Act, under which it was authorized in 1978 by P.L. 95507, To Amend the Small Business Act and the Small Business Investment Act of 1958, 92 Stat. 1757 (October 24,
1978). The William J. Clinton Administration changed the program’s name from the Minority Small Business and
Capital Ownership Development Program to the 8(a) Business Development program in 1988 “to emphasize that
individuals need not be members of minority groups and to stress the importance of assisting participating firms in their
overall business development.” See Small Business Administration (SBA), “Small Business Size Regulations: 8(a)
Business Development/Small Disadvantaged Business Status Determinations; Rules of Procedure Governing Cases
Before the Office of Hearings and Appeals,” 63 Federal Register 35727, June 30, 1998.
2 The terms “socially disadvantaged” and “economically disadvantaged” are defined in the Small Business Act,
codified at 15 U.S.C. §637(a)(5) and 15 U.S.C. §637(a)(6)(A) respectively. Business owners may be individuals or
certain eligible group entities (see “Program Features Unique to Group-Owned Firms” for further discussion).
3 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48569, July 25, 2016.
4 13 C.F.R. §124.111 (CDCs); 13 C.F.R. §124.109 (Indian Tribes and ANCs); 13 C.F.R. §124.110 (NHOs).
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are small in size, according to size standards established by the SBA;5
are of “good character,” which relates to an applicant’s criminal conduct, their
incarceration, parole, or probation pursuant to crimes involving business
integrity, their violations of any SBA regulations, and their submission of false
information to the SBA;
demonstrate potential for success, which a firm can generally do by operating
and receiving contracts in the private or public sectors, in its primary industry, for
at least two full years immediately prior to applying for the program (although
the SBA may waive this two-year requirement under certain conditions); and
are at least 51% unconditionally and directly owned by one or more socially and
economically disadvantaged individuals who are citizens of the United States (or
owned by an ANC, NHO, CDC, or Indian tribe).6
Social and Economic Disadvantage
Program participants must be socially disadvantaged as well as economically disadvantaged. For
program purposes, socially disadvantaged individuals are those who have been subjected to racial
or ethnic prejudice or cultural bias within American society because of their identities as members
of groups and without regard to their individual qualities.7 Prior to a July 2023 ruling in a federal
district court case (Ultima Servs. Corp. v. U.S. Department of Agriculture), the SBA applied a
“presumption of social disadvantage” to individuals applying for its 8(a) program from the
following groups: Asian Pacific Americans, Black Americans, Hispanic Americans, Subcontinent
Asian Americans, and Native Americans. Due to the district court ruling that the SBA cannot
presume social disadvantage based on ethnic or racial group membership, the SBA stopped
presuming social disadvantage. All program applicants must now submit a personal narrative to
the SBA that demonstrates their social disadvantage, a procedure that had been required of
individuals who were not members of one of the racial groups listed above.8
Economically disadvantaged individuals are those whose ability to compete in the free enterprise
system has been impaired due to diminished capital and credit opportunities.9 They must have a
net worth of less than $850,000 and an adjusted gross income averaged over the three preceding
years of $400,000 or less.10 Funds invested in an Individual Retirement Account (IRA) or other
5 The SBA’s size standards table is available at https://www.sba.gov/document/support-table-size-standards or in
the Code of Federal Regulations at 13 C.F.R. §121.201. Firms may also look up their North American Industry
Classification System (NAICS) code in the table or use the SBA’s Size Standards Tool, available
at https://www.sba.gov/size-standards/index.html.
6 Eligibility criteria are described at 13 C.F.R. §124.109 for tribes and ANCs; at 13 C.F.R. §124.110 for NHOs; and at
13 C.F.R. §124.111 for CDCs.
7 15 U.S.C. §637(a)(5).
8 For more information on the SBA’s response to the legal challenge, see CRS Insight IN12245, SBA’s 8(a) Business
Development Program Responds to District Court Ruling, by R. Corinne Blackford. For information about the history
of the 8(a) program’s definition of socially disadvantaged, see CRS Report R44844, SBA’s 8(a) Business Development
Program: Legislative and Program History, by R. Corinne Blackford.
9 15 U.S.C. §637(a)(6)(A).
10 13 C.F.R. §124.104(c). These thresholds were established by SBA through regulations. They were most recently
revised in 2022 (see SBA, “Small Business Size Standards: Adjustment of Monetary-Based Size Standards,
Disadvantage Thresholds, and 8(a) Eligibility Thresholds for Inflation,” 87 Federal Register 69118-69154, November
17, 2022). For more information on the development of these thresholds, see CRS Report R44844, SBA’s 8(a) Business
Development Program: Legislative and Program History, by R. Corinne Blackford.
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official retirement account will not be considered in determining an individual’s net worth.
Ownership interest in the applicant firm and the equity in the individual’s primary personal
residence is excluded from net worth calculations as well. In addition, the fair market value of all
their assets (including their primary residence and the value of the applicant firm) must not
exceed $6.5 million.11
Small Disadvantaged Businesses and Disadvantaged Small Business Owners
Although all 8(a) program participants must be socially disadvantaged as well as economically disadvantaged,
participants may be either individuals (a person or people) or one of four types of group-owned entities:
Community Development Corporations (CDCs), Alaska Native Corporations (ANCs), Native Hawaiian
Organizations (NHOs), and federally recognized Indian Tribes. All program participating firms are known as “Small
Disadvantaged Businesses” (SDBs). SDB owners are known as either “disadvantaged individuals” or “disadvantaged
entities.” This report refers to “disadvantaged individuals” or to “group-owned firms” when discussing the
different types of owners of SDBs.
One-Time Eligibility and Limits on Family Participation
Other eligibility regulations include one-time eligibility for the program and limits on ownership
by family members of current or former 8(a) firm owners. Once a firm or a disadvantaged
individual upon whom a firm’s eligibility was based has exited the program after participating in
it for any length of time, neither the firm nor the individual is eligible to participate in the
program again.12 Firms are considered identical for purposes of program eligibility when at least
50% of the assets of one firm are the same as those of another firm.13 Individuals may not use
their disadvantaged status to qualify a firm for the program if the individual has an immediate
family member who is using, or has used, disadvantaged status to qualify a firm for the
program.14
Program Features Unique to Group-Owned Firms
Firms owned by ANCs, CDCs, NHOs, and Indian tribes are governed by many of the same
regulations as other 8(a) firms, including the maximum participation period of nine years.15
Requirements for group-owned firms differ somewhat from individually-owned 8(a) firms,
including with respect to one-time eligibility for the program. Any given firm owned by an ANC,
CDC, NHO, or Indian tribe may participate in the 8(a) program once, but these entities may own
multiple firms.16 This is because disadvantaged groups may confer their eligibility status upon
firms on multiple occasions, and for an indefinite period—with some conditions.17
11
13 C.F.R. §124.104(c).
12 15 U.S.C. §636(j)(11)(B)-(C); and 13 C.F.R. §124.108(b).
13 13 C.F.R. §124.108(b)(4).
14 13 C.F.R. §124.105(g)(1). SBA may waive this prohibition if the firms have no connections in terms of ownership,
control, or contractual relationships and certain other conditions are met.
15 13 C.F.R. §124.109(a) and (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
16 13 C.F.R. §124.109(a) and (b) (ANC- and tribally-owned firms); 13 C.F.R. §124.110(a) (NHO-owned firms); and 13
C.F.R. §124.111(a) (CDC-owned firms).
17 15 U.S.C. §636(j)(11)(B)-(C).
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The conditions of multi-firm ownership relate to who may perform day-to-day firm management
and in what industries firms may operate. The managers responsible for the “daily operations” of
an ANC-, NHO-, or tribally-owned firm may not manage more than two 8(a) firms at the same
time.18 Also, groups may not own 51% or more of another firm that “either at the time of [8(a)
program] application or within the previous two years,” obtains the majority of its revenue from
the same “primary” industry as another one of its firms.19 However, group-owned entities may
own multiple firms that “conduct secondary business” in the same industry,20 and that earn less
than 50% of their revenue in the same primary industry.21
Program Participation Requirements
Continuing Eligibility Certification
Once accepted into the program, participating firms must certify their continuing eligibility to
remain in the program through an annual review process.22 Participants submit a variety of
information to the SBA through their SBA District Office, including personal financial
information for each disadvantaged business owner and a report for each 8(a) contract performed
during the year.23 In addition to these requirements for participants, if the SBA receives “specific
and credible information alleging that a Participant no longer meets the eligibility requirements
for continued program eligibility,” the SBA is to review a participant’s eligibility.24
Program Stages and Revenue Targets
As they progress through the program, firms complete stages of business development that are
tied to non-8(a) revenue targets (i.e., revenue received outside of 8(a) contracts). Program
participation is divided into two stages, a “developmental stage” of four years and a “transitional
stage” of five years.25 In the transitional stage, program participants must actively pursue non-8(a)
contracts in order to reach required annual targets for non-8(a) revenue. These targets increase
over time: 15% of their revenue from non-8(a) sources in the fifth year, 25% in the sixth year,
30% in the seventh year, 40% in the eighth year, and 50% in the ninth year.26 The goal is for firms
to successfully compete for federal contracts without 8(a) program assistance after completing the
program by the ninth year, and “not [to] develop an unreasonable reliance on 8(a) awards, and to
18 13 C.F.R. §124.109(c)(4)(iii) (ANC- and tribally-owned firms); 13 C.F.R. 124.110(d)(3) (NHO-owned firms).
19 13 C.F.R. §124.109(c)(3)(ii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(f) (NHO-owned firms); and 13
C.F.R. §124.111(d) (CDC-owned firms). According to SBA regulations, sharing a primary industry means sharing a
primary six-digit NAICS code with the same corresponding size standard. There are no limits on the number of firms
group-owned entities may own that operate in other industries. Regulations also provide that an 8(a) firm owned by an
ANC, CDC, NHO, or Indian tribe may not, within its first two years in the 8(a) program, receive a sole-source contract
that is a follow-on to an 8(a) contract currently performed by an 8(a) firm owned by that entity, or previously
performed by an 8(a) firm owned by that entity that left the program within the past two years. In addition, there are
restrictions on the percentage of work that may be performed by any non-8(a) venturer(s) in joint ventures involving
8(a) firms (see 13 C.F.R. §124.513(d)).
20 13 C.F.R. §124.111(d).
21 13 C.F.R. §124.109(c)(3)(ii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(e) (NHO-owned firms); 13 C.F.R.
§124.111(d) (CDC-owned firms).
22 13 C.F.R. §124.112.
23 13 C.F.R. §124.112(b).
24 13 C.F.R. §124.112(c).
25 13 C.F.R. §124.404(a).
26 13 C.F.R. §124.509(b).
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ease their transition into the competitive marketplace after graduating.”27 Firms that do not
display the relevant percentages of revenue from non-8(a) sources are ineligible for sole-source
8(a) contracts “unless and until” they correct the situation.28 Group-owned firms are subject to the
same revenue targets at various stages of their participation in the program as other 8(a) firms.29
Participant Business Plans
Each program participant “must develop a comprehensive business plan setting forth its business
targets, objectives, and goals,” in order “to assist the SBA servicing office in determining the
business development needs of its portfolio [of program] Participants.”30 Business plans are due
“as soon as possible after program admission.”31 They may be modified and must be reviewed
annually with the SBA, as part of a process that includes forecasting a firm’s contracting needs.32
Program Withdrawals and Graduations
8(a) firms may leave the program by any of the following means, including through “graduation”
at the end of the program period. Firms may exit through
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voluntary withdrawal;
voluntary early graduation (where the firm voluntarily decides to leave the
program after the SBA has determined that the firm has substantially achieved its
business plan’s targets, objectives, and goals and has demonstrated the ability to
compete in the marketplace without program assistance);
involuntary early graduation (where the SBA requires a firm to leave the program
because it has determined that the firm has substantially achieved its business
plan’s goals, demonstrated the ability to compete in the marketplace without
assistance, exceeded the relevant size standard, or is no longer economically
disadvantaged);33
termination for good cause;34
27 13 C.F.R. §124.509(a)(1).
28 13 C.F.R. §124.509(d)(1). This prohibition may be waived if the Office of Business Development’s director
determines that denial of a sole-source contract would cause severe economic hardship for the firm, potentially
jeopardizing its survival, or if extenuating circumstances beyond the firm’s control caused it to miss its target (13
C.F.R. §125.509(e)).
29 13 C.F.R. §124.509.
30 13 C.F.R. §124.402(a).
31
13 C.F.R. §124.402(b).
32 13 C.F.R. 124.403(a)-(b). A contract forecast provides, in writing, a firm’s needs for contract awards for the next
program year, including the aggregate dollar value of 8(a) contracts to be sought, and the aggregate dollar value of non8(a) contracts to be sought.
33 13 C.F. R. §124.302.
34 Examples of termination for good cause include submission of false information in the firm’s application materials;
failure to maintain eligibility for program participation; failure to pursue competitive and commercial business in
accordance with its business plan, or failure in other ways to make reasonable efforts to develop and achieve
competitive viability; a pattern of inadequate performance of awarded Section 8(a) contracts; failure to pay or repay
significant financial obligations owed to the federal government; failure to obtain and keep current any and all required
permits, licenses, and charters needed to operate the business; unauthorized use of SBA direct or guaranteed loan
proceeds or violation of an SBA loan agreement; and willful violation by a concern, or any of its principals, of any
SBA regulation pertaining to material issues (13 C.F.R. 124.303(a)(1-20) and (b)).
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expiration of the program term (maximum of nine years) without meeting the
SBA’s graduation requirements;35 or
graduation at the expiration of the program term. Firms may participate in the
program for no more than nine years36 from the date of their admission, although
they may be terminated or graduate from the program before nine years have
passed.37
Contracting Preferences for Program Participants
Set-Asides and Sole-Source Awards
A set-aside award is a contract awarded in which only certain contractors may compete, whereas
a sole-source award is a contract awarded, or proposed for award, without competition.38 The
Competition in Contracting Act (CICA)39 generally requires federal agencies to allow full and
open competition through the use of competitive procedures when procuring goods or services.
However, set-aside and sole-source awards to 8(a) firms are permissible under CICA under
certain circumstances. An 8(a) set-aside is a recognized competitive procedure.40 CICA also
permits sole-source awards when such awards are made pursuant to a procedure expressly
authorized by statute, or when special circumstances exist.41 Agencies are effectively encouraged
to subcontract through the 8(a) program because there are government-wide and agency-specific
goals for the annual percentage of procurement dollars awarded to small disadvantaged
businesses (SDBs), a category that includes all 8(a) firms (the statutory government-wide goal is
5%).42
35 13 C.F.R. §124.2.
36 In an effort to assist small businesses adversely affected by the novel coronavirus disease (COVID-19) pandemic,
P.L. 116-260 provided businesses participating in the 8(a) program on or before September 9, 2020, the option to
extend their participation in the program for one year. The extension did not apply to businesses that were terminated,
graduated early, or voluntarily withdrew from the program (see SBA, “Extension of Participation in 8(a) Business
Development Program,” 86 Federal Register 2530, January 13, 2021).
37 15 U.S.C. §636(j)(15) (nine-year term); 13 C.F.R. §124.301 (exiting the program); 13 C.F.R. §124.302 (early
graduation); and 13 C.F.R. §124.303 (termination).
38 Set-asides may be total or partial. See 48 C.F.R. §19.501(a).
39 P.L. 98-369, §§2701-2753.
40 10 U.S.C. §2304(b)(2); 41 U.S.C. §3303(b) (the Competition in Contracting Act (CICA) provisions authorizing setasides for small businesses); and 48 C.F.R. §§6.203-6.207 (set-asides for small business generally, 8(a) small
businesses, Historically Underutilized Business Zone [HUBZone] small businesses, service-disabled veteran-owned
small businesses, and women-owned small businesses). CICA authorizes competitions excluding all sources other than
small businesses when such competitions assure that a “fair proportion of the total purchases and contracts for property
and services for the Federal Government shall be placed with small business concerns” (41 U.S.C. §3104).
41 10 U.S.C. §2304(c)(1) (defense agency procurements); and 41 U.S.C. §§3301 and 3304(a) (civilian agency
procurements).
42 13 C.F.R. §124.1001 (defining “small disadvantaged business”). The federal government uses aspirational
procurement goals instead of requiring federal agencies to award specific percentages of federal contracts to various
types of small businesses primarily to avoid legal challenges under the equal protection component of the Fifth
Amendment’s Due Process Clause. See, for example, City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) and
Adarand Constructors, Inc. v. Pena 515 U.S. 200 (1995). For more information on statutory small business contracting
goals, see CRS Insight IN12018, Federal Small Business Contracting Goals, by R. Corinne Blackford, and CRS Report
R45576, An Overview of Small Business Contracting, by R. Corinne Blackford.
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Award Limitations
Both set-asides and sole-source awards have limitations, and may only be made in certain
circumstances. Sole-source awards also have dollar value caps, for individual contracts and for
the total amount received by any one firm.
An 8(a) sole-source award, including options, must not exceed
•
•
$5.5 million, or
$8.5 million in the case of manufacturing contracts.43
In addition, individually-owned firms (vs. group-owned firms) may not receive additional 8(a)
sole-source awards once they have been awarded a combined total of competitive and sole-source
awards in excess of
•
$168,500,000 during its participation in the program.44
Once awarded more than $168,500,000 in 8(a) contract awards, participant firms owned by
individuals may not receive any additional 8(a) sole-source awards, though they can still receive
set-asides.45 The SBA will not count awards less than the “simplified acquisition threshold”
($350,000) toward this limit.46 Firms owned by ANCs, CDCs, NHOs, and Indian tribes are not
subject to this maximum total award amount and may continue to receive sole-source awards
beyond it.47
The SBA is barred from awarding an 8(a) contract, either via a set-aside or on a sole-source basis,
if the cost to the contracting agency exceeds “a fair market price.”48 Additional prohibitions on
the SBA accepting 8(a) contracts exist, although agencies can generally offer contracts to the
SBA “in [their] discretion,”49 and the SBA may accept them “whenever it determines such action
is necessary or appropriate.”50
Group-Owned Set-Asides and Sole-Source Awards
Firms owned by ANCs and Indian tribes can receive sole-source awards in excess of $5.5 million
($8.5 million for manufacturing contracts) even when contracting officers reasonably expect that
at least two eligible and responsible 8(a) firms will submit offers and the award can be made at
fair market price.51
43 48 C.F.R. §19.805-1(a)(2). The Federal Acquisition Regulatory Council has the responsibility of adjusting each
acquisition-related dollar threshold (including those for the 8(a) program), on October 1, of each year that is evenly
divisible by five (13 C.F.R. §124.506 (a); and 41 U.S.C. §1908(c)(2)).
44 13 C.F.R. §124.519(a). The SBA may waive this limit “where the head of a procuring activity represents that award
of a sole source 8(a) contract to the Participant is needed to achieve significant interests of the Government” (13 C.F.R.
§124.519(e)).
45 13 C.F.R. §124.519(c).
46 13 C.F.R. §124.519(b)(2); 48 C.F.R. §2.101 (defines the “simplified acquisition threshold”).
47 48 C.F.R. §19.805-1(b)(2); 13 C.F.R. §124.506(b); 48 C.F.R. §219.805-1(b)(2)(A)-(B).
48 15 U.S.C. §637(a)(1)(A); 48 C.F.R. §19.806(b).
49 See “Federal Agency Discretion to Use the 8(a) Program.”
50 15 U.S.C. §637(a)(1)(A).
51 P.L. 100-656, §602(a), 102 Stat. 3887-88 (November 15, 1988) (codified at 15 U.S.C. §637 note); and 48 C.F.R.
§19.805-1(b)(2); 13 C.F.R. §124.506(b).
P.L. 111-84 requires federal contracting officers to provide written justifications, obtain higher-level agency approvals,
(continued...)
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NHO-owned firms may receive sole-source awards from the Department of Defense under the
same conditions.52 (The Department of Defense is using a secondary Department of War
designation under Executive Order 14347, dated September 5, 2025.)
If a sole-source award to a group-owned firm reaches a certain threshold, a contracting officer
must create a written justification and receive approval for the award.53 These thresholds are
•
•
$30,000,000, or
$100,000,000 for the Department of Defense.54
Additionally, as mentioned above, firms owned by ANCs, CDCs, NHOs, and Indian tribes may
continue to receive additional sole-source awards even after they have received a combined total
of competitive and sole-source 8(a) contracts in excess of $168,500,000.55
Business Development Resources for Participants
Technical Assistance Through the Empower to Grow Program
8(a) program participants receive training and technical assistance through the SBA’s Empower to
Grow program, formerly known as the 7(j) Management and Technical Assistance Program.56 The
7(j) program’s origin dates back to 1970 when the SBA issued regulations creating the 8(a)
contracting program.57 Per statutory authority under Section 7(j) of the Small Business Act to
provide management and technical assistance through contracts, grants, and cooperative
agreements, the regulations specified that “the SBA may provide technical and management
assistance to assist in the performance of the subcontracts.”58
Today, the Empower to Grow program “provides eligible disadvantaged U.S. small businesses
with free business courses, tailored training, and one-on-one consulting to support their growth,
and provide notices for sole-source contracts in excess of $20 million. The $20 million threshold was increased through
a regulatory update to $22 million, effective October 1, 2015, and to $25 million, effective October 1, 2020, to account
for inflation. P.L. 116-92 increased this threshold to $100 million for Department of Defense contracts.
52 Differences between NHO and ANC/tribal sole-source benefits were legislated. DOD’s authority to make solesource awards to NHO-owned firms in excess of $4.5 million ($7 million for manufacturing contracts) existed on a
temporary basis from 2004 to 2006, and became permanent in 2006. See P.L. 109-148, Department of Defense,
Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act of
2006, §8020, 119 Stat. 2702-03 (December 30, 2005) (“[Provided] [t]hat, during the current fiscal year and hereafter,
businesses certified as 8(a) by the Small Business Administration pursuant to section 8(a)(15) of Public Law 85-536, as
amended, shall have the same status as other program participants under section 602 of P.L. 100-656 ... for purposes of
contracting with agencies of the Department of Defense.”); 48 C.F.R. §219.805-1(b)(2)(A)-(B).
53 48 C.F.R. §6.303-1; 48 C.F.R. §6.304. The amount of the award determines the official who must provide approval,
with larger awards requiring approval from higher-level officials.
54 FAR §19.808-1(a). DFARS §219.808-1.
55 13 C.F.R. §124.519(a).
56 SBA, “About Empower to Grow” and “8(a) Business Development Program,” accessed 7/1/2024. The SBA’s 7(j)
program dates back to 1970 when the SBA issued regulations, using its statutory authority under Section 7(j) of the
Small Business Act, to create the 8(a) contracting program to “assist small concerns owned by disadvantaged persons
to become self-sufficient, viable businesses capable of competing effectively in the market place.” 13 C.F.R. §124.81(b) (1970); and Notes, “Minority Enterprise, Federal Contracting, and the SBA’s 8(a) Program: A New Approach to
an Old Problem,” Michigan Law Review, vol. 71, no. 2 (December 1972), pp. 377, 378.
57 13 C.F.R. §124.8-1(b) (1970); and Notes, “Minority Enterprise, Federal Contracting, and the SBA’s 8(a) Program: A
New Approach to an Old Problem,” Michigan Law Review, vol. 71, no. 2 (December 1972), pp. 377, 378.
58 13 C.F.R. §124.8-1(d) (1970).
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operations, hiring, regulatory compliance, and government contracting competitiveness.”59
Eligible businesses include those that meet SBA size standards and “which are located in urban or
rural areas with a high proportion of unemployed or low-income individuals, or which are owned
by such low-income individuals,” as well as 8(a) program participants.60
SBA regulations indicate that assistance is offered “through its private sector service providers”
and include “counseling and training in the areas of financing, management, accounting,
bookkeeping, marketing, and operation of small business concerns,” as well as “the identification
and development of new business opportunities.”61 Information on the numbers of firms assisted
is available in the SBA’s annual Congressional Budget Justification and Annual Performance
Report.62 The program is funded through a combination of directed appropriations and the SBA’s
salaries and expenses account.
SBA Mentor-Protégé Program63
The SBA established an 8(a) Mentor-Protégé Program in 1998 to “enhance the capabilities” of
8(a) firms and “improve [their] ability to successfully compete for contracts.”64 It was merged
into the SBA’s All Small Mentor-Protégé Program for non-8(a) firms on November 16, 2020.65
The SBA merged the programs in an effort to “eliminate confusion regarding perceived
differences between the two programs, remove unnecessary duplication of functions within SBA,
and establish one, unified staff to better coordinate and process mentor-protégé applications.”66
Today the program is known as the Mentor-Protégé Program67 and SBA regulations govern who
may qualify as a mentor or protégé, and the content of written agreements between mentors and
protégés.68
A protégé must
•
•
be a small business with industry experience,
have a proposed mentor prior to applying for the program,
59 SBA, “About Empower to Grow,” accessed 7/1/2024, at https://www.sba.gov/sba-learning-platform/empower-grow.
60 13 C.F.R. §124.703.
61 13 C.F.R. §124.702.
62 SBA, “Congressional Budget Justification and Annual Performance Report,” at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report.
63 For information on joint venture arrangements between mentor and protégé firms, see CRS In Focus IF13095, Small
Business Joint Ventures in Federal Procurement, by R. Corinne Blackford.
64 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations; Rules of Procedure Governing Cases Before the Office of Hearings and Appeals: Final Rule,” 63
Federal Register 35739, June 30, 1998.
65
13 C.F.R. §124.520(a). See also GAO, Small Business: SBA Could Better Focus Its 8(a) Program to Help Firms
Obtain Contracts, GAO/RCED-00-196, July 20, 2000, p. 14; and SBA, “Consolidation of Mentor-Protégé Programs
and Other Government Contracting Amendments,” 85 Federal Register 66146-66199, October 16, 2020. The All Small
Mentor-Protégé Program’s requirements essentially matched those of the 8(a) Mentor-Protégé Program; the only major
difference was that the 8(a) Mentor-Protégé Program was limited to 8(a) program participants.
66 SBA, “Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments,” 84 Federal
Register 60846, November 8, 2019; and SBA, “Consolidation of Mentor-Protégé Programs and Other Government
Contracting Amendments,” 85 Federal Register 66146-66199, October 16, 2020.
67 This program is distinct from agency-specific mentor-protégé programs, which are generally administered by the
agency’s Office of Small and Disadvantaged Business Utilization (OSDBU) and may involve coordination with agency
contracting offices.
68 A list of active mentor-protege agreements is available from the SBA at https://www.sba.gov/document/supportactive-mentor-protege-agreements. Agency contracting officials may use this list for market research.
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•
•
be organized for profit or as an agricultural cooperative, and
have had no more than two mentors in the business’s lifetime.69
A mentor must
•
•
•
•
•
be organized for profit or as an agricultural cooperative,
demonstrate that it is capable of carrying out its responsibilities to assist the
protégé,
possess good character and a favorable financial position,
not be on the federal list of debarred or suspended contractors or affiliated with
the protégé at the time of application or for any reason other than the mentorprotégé agreement, and
have no more than three protégés at a time.70
Furthermore, the SBA “must determine that the mentor-provided assistance will promote real
developmental gains for the protégé, not just act as a vehicle to receive federal small business setasides.”71
Protégé benefits include financial assistance in the form of equity investments (of up to 40% of
the protégé’s business); assistance navigating federal contract bidding, acquisition, and
performance process; and general and administrative assistance, such as human resource sharing
or security clearance support.72 “Mentors are encouraged to provide assistance relating to the
performance of contracts set aside or reserved for small business so that protégé firms may more
fully develop their capabilities.”73
The primary benefit for mentors is that they may form joint ventures with protégés that qualify
for small business set-aside contracts for which the small business is eligible, including contracts
set aside for 8(a) program participants.74
Mentor-protégé agreements may last for no more than six years, and any changes to the
agreement must be approved by the SBA in advance.75 An applicant protégé and its prospective
mentor may not be affiliated at the time of application but an applicant must apply with a
“prospective mentor” identified, because the program is “not a matchmaking program.”76
8(a) Program Administration
8(a) program administration by the SBA involves both activities related to program participants
as well as agency procurement through the program. For participants, the SBA handles program
admission processes, continuing eligibility and monitoring, as well as business development
services. For agency purchasing units, the SBA provides Small Disadvantaged Business (SDB)
vendors via its Section 8(a) subcontracting authority. SBA’s Office of Business Development
69 SBA, “SBA Mentor-Protégé Program,” at https://www.sba.gov/federal-contracting/contracting-assistance-programs/
all-small-mentor-protege-program. For additional information concerning program requirements, see 13 C.F.R. §125.9.
70 13 C.F.R. §125.9; and SBA, “SBA Mentor-Protégé Program.”
71 SBA, “SBA Mentor-Protégé Program.”
72 13 C.F.R. §125.9; and SBA, “SBA Mentor-Protégé Program.”
73 13 C.F.R. §125.9(a).
74 13 C.F.R. §125.9; and SBA, “SBA Mentor-Protégé Program.”
75 13 C.F.R. §125.9(e)(5) and (7).
76 SBA, “SBA Mentor-Protégé Program.”
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(BD) handles various aspects of the program, and is housed within the Office of Government
Contracts and Business Development.77 The SBA District Office serving “the geographical
territory where a Participant’s principal place of business is located” provides program services to
firms participating in the program.78
SBA personnel known as Business Opportunity Specialists (BOSs) are located at SBA’s District
Offices.79 They assist both prospective and existing 8(a) firms with questions related to the
application process, required forms, and the program’s various eligibility, reporting, and
performance requirements.80
Procurement Through 8(a) Mechanisms
On the procurement side of 8(a) program operations, SBA subcontracts to program participants
on behalf of other federal agencies. Section 8(a) of the Small Business Act authorizes agencies to
award contracts for goods or services, or to perform construction work, to the SBA for
subcontracting to 8(a) firms. The act also authorizes the SBA to delegate the function of
executing contracts to the procuring agencies, and it often does so.81
Once the SBA has accepted a contract for the 8(a) program, the contract is awarded through either
a set-aside or on a sole-source basis, with the contract amount generally determining the
acquisition method used. Table 1 summarizes the preference types that correspond with different
award value thresholds.
Table 1. 8(a) Contract Award Method by Award Value Threshold
Award Value Threshold
Less than $5.5 million ($8.5
million for manufacturing
contracts)
Award/Preference Type
Sole-source award
Criteria
Provided that (1) the firm is determined to be a
responsible contractor for performance of the
contract; (2) the award of the contract would be
consistent with the firm’s business plan; and (3)
award of the contract would not result in the firm
exceeding the percentage of revenue from 8(a)
sources forecast in its annual business plan.
77 SBA’s Office of Business Development (BD) has three offices: the Office of Certification and Eligibility (OCE), the
Office of Management and Technical Assistance (OMTA); and the Office of Program Review (OPR). OCE provides
program participants recommendations concerning initial and continuing program eligibility. OMTA administers most
of the services that are not provided by SBA District Offices, such as servicing sole-source, competitive, and multipleaward contracts; mentor/protégé applications and reconsiderations; and overseeing and coordinating technical and
management training assistance. OPR supports both 8(a) headquarters and field office staff. SBA, Office of Business
Development, “Standard Operating Procedure for the Office of Business Development,” SOP 80 05 5, effective
September 23, 2016, pp. 29-31.
78 13 C.F.R. §124.401. States and territories have an SBA District Office staffed by various SBA personnel. Some
larger states have more than one District Office (e.g., California and Texas each have six District Offices). SBA, “SBA
District Offices,” accessed 6/28/2024, https://www.sba.gov/about-sba/sba-locations/sba-district-offices.
79 SBA, “SBA District Offices,” accessed 6/28/2024, https://www.sba.gov/about-sba/sba-locations/sba-district-offices.
80 SBA, OIG, SBA Business Development Assistance to 8(a) Program Participants, Report No. 22-08, February 14,
2022, pp. 21-22, at https://www.sba.gov/document/report-22-08-sbas-business-development-assistance-8a-programparticipants.
81 13 C.F.R. §124.501(a); Partnership Agreement Between the U.S. Small Business Administration and the U.S.
Department of Defense, January 7, 2013, at https://www.acq.osd.mil/dpap/policy/policyvault/
8(a)_Partnership_Agreement.pdf.
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Award Value Threshold
Award/Preference Type
Criteria
Above $5.5 million ($8.5
million for manufacturing
contracts)
Contract set-aside (8(a)competed)
Provided that there is a reasonable expectation that
at least two eligible and responsible 8(a) firms will
submit offers and the award can be made at fair
market price.
Source: CRS analysis of SBA regulations, Federal Acquisition Regulation, and Small Business Act provisions.
Notes: Requests to compete 8(a) contracts under the threshold ($5.5 or $8.5 million) may be made to the SBA
but “will be approved only on a limited basis and will be primarily granted where technical competitions are
appropriate or where a large number of responsible 8(a) participants are available for competition” (48 C.F.R.
§19.805-1(d)).
When the contract’s anticipated total value, including any options, is less than $5.5 million ($8.5
million for manufacturing contracts), the contract is normally awarded without competition.82 In
contrast, when the contract’s anticipated value exceeds these thresholds, the contract generally
must be awarded via a set-aside with competition limited to 8(a) firms so long as there is a
reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and
the award can be made at fair market price.83
Federal Agency Discretion to Use the 8(a) Program
There are few limits on agency discretion to use the 8(a) program.84 However, the SBA is
prohibited by regulation from accepting procurements for 8(a) awards when
1. the procuring agency issued a solicitation for or otherwise expressed publicly a
clear intent to reserve the procurement as a set-aside for small businesses not
participating in the program prior to offering the requirement to the SBA for
award as an 8(a) contract;85
2. the procuring agency competed the requirement among 8(a) firms prior to
offering the requirement to the SBA and receiving the SBA’s acceptance of it;86
or
3. the SBA makes a written determination that “acceptance of the procurement for
8(a) award would have an adverse impact on an individual small business, a
82 48 C.F.R. §19.805-1; and 15 U.S.C. §637(a)(16)(A). A noncompetitive (sole-source) award may be made under this
authority so long as (1) the firm is determined to be a responsible contractor for performance of the contract; (2) the
award of the contract would be consistent with the firm’s business plan; and (3) award of the contract would not result
in the firm exceeding the percentage of revenue from 8(a) sources forecast in its annual business plan (15 U.S.C.
§637(a)(16)(A)(i)-(iii)).
83 15 U.S.C. §637(a)(1)(D)(ii); 48 C.F.R. §19.805-1(a). However, competitive awards for contracts whose anticipated
value is less than $5.5 million ($8.5 million for manufacturing contracts) can be made with the approval of the SBA’s
Associate Administrator for 8(a) Business Development. 15 U.S.C. §637(a)(1)(D)(i)(I)-(II); 48 C.F.R. §19.805-1(d).
Requests to compete 8(a) contracts under the sole-source cap “will be approved only on a limited basis and will be
primarily granted where technical competitions are appropriate or where a large number of responsible 8(a) participants
are available for competition” (48 C.F.R. §19.805-1(d)).
84 AHNTECH, Inc., B-401092 (April 22, 2009) (“The [Small Business] Act affords the SBA and contracting agencies
broad discretion in selecting procurements for the 8(a) program.”).
85 Even in this situation, SBA may accept the requirement under “extraordinary circumstances.” 13 C.F.R. §124.504(a);
Madison Services, Inc., B-400615 (December 11, 2008) (finding that extraordinary circumstances existed when the
agency’s initial small business set-aside was erroneous and did not reflect its intentions).
86 Offers of requirements below the simplified acquisition threshold (generally $350,000) are assumed to have been
accepted if SBA does not reply within two days. 13 C.F.R. §124.503(a)(4)(i). See also Eagle Collaborative Computing
Services, Inc., B-401043.3 (January 28, 2011) (finding that an agency properly awarded a sole-source contract valued
below the simplified acquisition threshold even though the SBA never formally accepted the requirements).
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group of small businesses located in a specific geographical location, or other
small business programs.”87
In addition, the SBA is barred from awarding an 8(a) contract, either via a set-aside or on a solesource basis, “if the price of the contract results in a cost to the contracting agency which exceeds
a fair market price.”88
Otherwise, agency officials may offer contracts to the SBA “in [their] discretion,” and the SBA
may accept requirements for the 8(a) program “whenever it determines such action is necessary
or appropriate.”89 The courts and the Government Accountability Office (GAO) will generally not
hear protests of agencies’ decisions to procure specific requirements through the 8(a) program
unless it can be shown that government officials acted in bad faith or contrary to federal law.90
Congressional Issues
The 8(a) program has faced a few developing issues that may be of interest to Congress,
including a constitutional challenge to the definition of social disadvantage used in the program
that resulted in program application changes. Other issues of potential congressional interest
include program eligibility oversight, and the relative status of group-owned firms when
compared to individually owned ones.
Changes to Presumption of Social Disadvantage
In a July 2023 district court case, Ultima Servs. Corp. v. U.S. Department of Agriculture, the U.S.
District Court for the Eastern District of Tennessee found SBA’s presumption of social
disadvantage for certain 8(a) program applicants to be unconstitutional.91 Prior to the ruling, the
SBA applied a “presumption of social disadvantage” to individuals applying for its 8(a) program
from the following groups: Asian Pacific Americans, Black Americans, Hispanic Americans,
Subcontinent Asian Americans, and Native Americans.92 Thus, to establish “social disadvantage”
for the program, applicants were required to either attest to membership in one of these groups, or
provide a personal narrative to the SBA establishing social disadvantage if they did not belong to
one of the groups.93 Because the district court ruled that SBA cannot presume social disadvantage
based on ethnic or racial group membership, the SBA stopped presuming social disadvantage.
87 13 C.F.R. §124.504(a)-(c). The third provision applies only to preexisting procurement requirements. It generally
does not apply to new contracts, follow-on or renewal contracts, or procurements conducted using simplified
acquisition procedures. The SBA must presume an adverse impact when “(A) The small business concern has
performed the specific requirement for at least 24 months; (B) The small business is performing the requirement at the
time it is offered to the 8(a) ... program, or its performance of the requirement ended within 30 days of the procuring
activity’s offer of the requirement to the 8(a) ... program; and (C) The dollar value of the requirement that the small
business is or was performing is 25 percent or more of its most recent annual gross sales (including those of its
affiliates).” See 13 C.F.R. §124.504(c)(1)(i)(A)-(C).
88 15 U.S.C. §637(a)(1)(A); 48 C.F.R. §19.806(b). Fair market price is estimated by looking at recent prices for similar
items or work, in the case of repeat purchases, or by considering commercial prices for similar products or services,
available in-house cost estimates, cost or pricing data submitted by the contractor, or data from other government
agencies, in the case of new purchases. 15 U.S.C. §637(a)(3)(B)(i)-(iii); 48 C.F.R. §19.807(b) and (c).
89 15 U.S.C. §637(a)(1)(A).
90 See Rothe Computer Solutions, LLC, B-299452 (May 9, 2007).
91 For a summary of the outcome of this court ruling, see CRS Insight IN12245, SBA’s 8(a) Business Development
Program Responds to District Court Ruling, by R. Corinne Blackford.
92 13 C.F.R. §124.103(b).
93 13 C.F.R. §124.103(c).
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Any current program participant who had previously relied on the presumption of social
disadvantage for program eligibility must now submit a narrative to SBA, and moving forward,
per existing SBA regulations, an individual may prove social disadvantage by submitting
“evidence to support his or her claim(s)” to the SBA.94
Because of the program application changes that resulted from the ruling, Congress may be
interested in program application processing issues, as well as whether agency contracting with
SDBs has been affected by 8(a) program changes. Several thousand 8(a) firms were affected by
the ruling, many of which were required to establish their socially disadvantaged status with the
SBA through a personal narrative in order to remain in the 8(a) program after the ruling.95
Program Eligibility Oversight
Congress maintains an interest in ensuring only eligible firms are admitted to the 8(a) program
and receive program benefits, and debates continue over how to best achieve this without
disqualifying or otherwise discouraging eligible firms from participating. Although the SBA’s
Office of Inspector General (OIG) did not have any open recommendations related to the 8(a)
program in its March 2026 semiannual report on open recommendations,96 previous OIG reports
have found that some firms were improperly awarded 8(a) contracts.97 For example, 2018
reporting found that SBA “did not always act to remove firms it determined were no longer
eligible for the program” and that ineligible firms “received $126.8 million in new 8(a) set-aside
contract obligations in FY 2017 at the expense of eligible disadvantaged firms in the 8(a)
program.”98
The current SBA Administrator has renewed SBA’s focus on program eligibility, announcing a
“full-scale audit of the program” in June 2025, and in December 2025, requiring all program
participants to provide various financial documents for the last three fiscal years within 30 days.99
The Administrator issued this requirement in addition to the existing program requirement that all
participating firms must certify their continuing eligibility to remain in the program through an
annual review process.100
In January 2026, SBA announced the suspension of 1,091 firms from the 8(a) program after the
firms “failed to meet the agency’s January 19th deadline to submit three years’ worth of financial
94 13 C.F.R. §124.103(c)(1). The applicant should demonstrate their claims “by a preponderance of the evidence.” This
burden of proof is met if the applicant can show that there is a greater than 50% chance the applicant’s claims are true.
95 SBA, “Updates on the 8(a) Business Development Program;” and U.S. General Services Administration System for
Awards Management, at SAM.gov.
96 Office of Inspector General, Office of Inspector General Open Recommendations as of December 2025, U.S. Small
Business Administration, March 11, 2026, https://www.sba.gov/document/report-us-small-business-administrationoffice-inspector-general-open-recommendations.
97 SBA OIG, Reassessment of Eligibility Requirements for 30 Firms in SBA’s 8(a) Business Development Program,
July 17, 2017, https://www.sba.gov/sites/default/files/2019-07/SBA_OIG_Report_17-15.pdf; SBA OIG, Improvements
Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, September 7, 2018, https://www.sba.gov/sites/
default/files/2019-07/SBA-OIG-Report_18-22.pdf.
98 SBA OIG, Improvements Needed in SBA’s Oversight of 8(a) Continuing Eligibility Processes, September 7, 2018,
https://www.sba.gov/sites/default/files/2019-07/SBA-OIG-Report_18-22.pdf.
99 SBA, “Administrator Loeffler Orders Full-Scale Audit of 8(a) Contracting Program,” June 27, 2025, at
https://www.sba.gov/article/2025/06/27/administrator-loeffler-orders-full-scale-audit-8a-contracting-program; SBA,
“SBA Orders All 8(a) Participants to Provide Financial Records,” December 5, 2025, https://www.sba.gov/article/
2025/12/05/sba-orders-all-8a-participants-provide-financial-records.
100 13 C.F.R. §124.112.
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documents.”101 Around this time, there were approximately 4,300 firms in the program, a figure
that had been declining over time.102
Some Members of Congress and other policymakers and observers contend that the SBA’s recent
focus on eligibility unduly prevents eligible firms from qualifying and maintaining eligibility in
the 8(a) program. For instance, Ranking Member of the House Small Business Committee,
Representative Nydia Velázquez, has stated that the SBA’s recent actions would “cast doubt on
the entire 8(a) Program,” were undertaken without sufficient evidence of their need, and that
existing law and enforcement action are already “working to root out and penalize fraud.”103
Some policy organizations have assessed recent program changes and called for alternative
approaches to ensuring program integrity. The national think tank Third Way, for example,
proposed “risk-based, case-by-case enforcement—not blanket sweeps” of program participants,
so as to avoid “lasting reputational harms.”104
Social Disadvantage
Amid debate about how to maintain the integrity of program eligibility requirements, there is
renewed disagreement about the purpose of the 8(a) program, centering primarily on the meaning
of “social disadvantage” as it relates to racial discrimination. In January 2026, the month of the
SBA’s suspension of firms from the program, SBA issued guidance to 8(a) program officials with
a statement that “SBA will not approve admissions to the program based solely on
unsubstantiated claims or Biden-era narratives of racial discrimination.”105 In a press release
announcing the guidance, Administrator Kelly Loeffler asserted the 8(a) program was being used
as “a vehicle for partisan and DEI preferences in federal contracting—crowding out legitimate
job creators, especially white men.”106 Proponents of the program, including some Members of
Congress, maintain that the 8(a) program plays a role in remedying racial discrimination in the
federal contracting in accordance with its intended purpose as authorized by Congress.107
Recent congressional action includes the introduction of H.R. 8511 and S. 4390, both of which
would end federal contracting preferences for disadvantaged individuals and businesses. As
101 SBA “SBA Suspends Over 1,000 8(a) Firms from Program Following December Document Request,” January 28,
2026, at https://www.sba.gov/article/2026/01/28/sba-suspends-over-1000-8a-firms-program-following-decemberdocument-request.
102 “SBA Orders All 8(a) Participants to Provide Financial Records,” December 5, 2025, https://www.sba.gov/article/
2025/12/05/sba-orders-all-8a-participants-provide-financial-records; Representative Nydia Velázquez, “Velázquez
Pushes for Improvements to SBA’s 8(a) Program,” September 18, 2019, https://democrats-smallbusiness.house.gov/
news/documentsingle.aspx?DocumentID=2844.
103 Representative Nydia Velázquez, “Velázquez Reaffirms Commitment to Protecting the Integrity and Impact of the
8(a) Program,” August 4, 2025.
104
Benjamin Weiser, SBA Fraud Response: Precision, Not Blanket Suspensions, Third Way, March 17, 2026,
https://www.thirdway.org/memo/sba-fraud-response-precision-not-blanket-suspensions.
105 SBA, “SBA Issues Clarifying Guidance That Race-Based Discrimination Is Not Tolerated in the 8(a) Program,”
January 22, 2026, https://www.sba.gov/article/2026/01/22/sba-issues-clarifying-guidance-race-based-discriminationnot-tolerated-8a-program.
106 SBA, “SBA Issues Clarifying Guidance That Race-Based Discrimination Is Not Tolerated in the 8(a) Program,”
January 22, 2026, https://www.sba.gov/article/2026/01/22/sba-issues-clarifying-guidance-race-based-discriminationnot-tolerated-8a-program.
107 Congressman Glenn Ivey, “Senator Cardin and Representative Ivey Highlight Racial Discrimination, Federal
Programs for Minority Businesses in One of the Senator’s Final Field Hearings,” May 8, 2024, https://ivey.house.gov/
media/press-releases/senator-cardin-and-representative-ivey-highlight-racial-discrimination-federal; Representative
Nydia Velázquez, “Velázquez Pushes for Improvements to SBA’s 8(a) Program,” September 18, 2019,
https://democrats-smallbusiness.house.gov/news/documentsingle.aspx?DocumentID=2844.
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currently defined in statute, “socially disadvantaged individuals” have been subjected to racial or
ethnic prejudice or cultural bias within American society because of their identities as members of
groups and without regard to their individual qualities.108
Group-Owned Firm Status and Benefits
Another issue of recent congressional debate is the status of group-owned firms within the 8(a)
program. Questions remain on group-owned firm participation in the 8(a) program, and the
nuances around how these entities may receive non-competitive (sole-source) contracts, as raised
by GAO reporting.109 In December 2025, Senator Ernst sent 22 letters to agencies raising
questions about their awards to 8(a) firms, specifically firms owned by ANCs, NHOs, and
tribes.110 Program regulations around joint venture teams that include group-owned 8(a) firms
may be of congressional interest, along with the discrepancy between sole-source award limits for
individually owned firms and those for group-owned firms.
108 15 U.S.C. §637(a)(5).
109 From 2006 through 2016, GAO issued three reports detailing the limitations of SBA’s oversight and monitoring of
ANC-owned firms participating in the 8(a) program.
110 Senator Joni Ernst, “Ernst Calls for Complete Halt and Full Audit of Fraud-Filled Contracting Program,” December
8, 2025, https://www.ernst.senate.gov/news/press-releases/ernst-calls-for-complete-halt-and-full-audit-of-fraud-filledcontracting-program.
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Appendix A. Eligibility Requirements for 8(a) Firms
Program Eligibility
Program eligibility is limited to “small business[es] which [are] unconditionally owned and
controlled by one or more socially and economically disadvantaged individuals who are of good
character and citizens of and residing in the United States, and which demonstrates potential for
success.”111 Each of these terms is defined by the Small Business Act; SBA regulations; and
judicial and administrative decisions.112 The eligibility requirements are the same at the time of
entry into the program and throughout the program unless otherwise noted.113
Business
Except for small agricultural cooperatives, a business is a for-profit entity that has a place of
business located in the United States and operates primarily within the United States or makes a
significant contribution to the U.S. economy by paying taxes or using American products,
materials, or labor.114 For 8(a) Program purposes, businesses are individual proprietorships,
partnerships, limited liability companies, corporations, joint ventures, associations, trusts, or
cooperatives.115
Small
A business is small if it is independently owned and operated; is not dominant in its field of
operations; and meets any definitions or standards established by the SBA Administrator.116 These
standards focus primarily upon the size of the business as measured by the number of employees
or average annual receipts (gross income for sole proprietorships), but they also take into account
the size of other businesses within the same industry.117 For example, businesses in the field of
scheduled passenger air transportation are small if they have 1,500 or fewer employees, whereas
those in the data processing field are small if they have average annual receipts of $32.5 million
or less.118
Affiliations among businesses, or relationships allowing one party control over another, generally
count in size determinations, with the SBA considering “the receipts, employees, or other
measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates,
111 13 C.F.R. §124.101. The Office of Legal Counsel at the Department of Justice has opined that SBA regulations
limiting eligibility for the 8(a) Program to citizens do not deprive resident aliens of due process in violation of the Fifth
Amendment to the U.S. Constitution. See U.S. Department of Justice, Office of Legal Counsel, Constitutionality of 13
C.F.R. §124.103 Establishing Citizenship Requirement for Participation in 8(a) Program, 20 Op. O.L.C. 85 (1996).
112 The SBA’s Office of Hearings and Appeals has, for example, developed a seven-part test for determining whether a
small business is unusually reliant on a contractor that is used in determining affiliation. See Valenzuela Eng’g, Inc. &
Curry Contracting Co., Inc., SBA-4151 (1996).
113 13 C.F.R. §124.112(a).
114 13 C.F.R. §121.105(a)(1). “Business” is separately defined for small agricultural cooperatives. See 13 C.F.R.
§121.105(a)(2).
115 13 C.F.R. §121.105(b).
116 15 U.S.C. §632(a)(1)-(2)(A).
117 13 C.F.R. §§121.101-121.109. The number of employees is the average number in each pay period for the preceding
12 calendar months. Receipts means total income (or in the case of a sole proprietorship, gross income) plus cost of
goods sold as these terms are defined and reported on Internal Revenue Service tax return forms. Where possible,
receipts are based on the average for the last three completed fiscal years. It includes all revenues, not just those from
the firm’s primary industry. See 13 C.F.R. §121.104.
118 13 C.F.R. §121.201.
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regardless of whether the affiliates are organized for profit.”119 Businesses can thus be determined
to be other than small because of their involvement in joint ventures, subcontracting
arrangements, or franchise or license agreements, among other things, provided that their income
or personnel numbers, plus those of their affiliate(s), are over the pertinent size threshold.120
Unconditionally Owned and Controlled
8(a) firms must be “at least 51% unconditionally and directly owned by one or more socially and
economically disadvantaged individuals who are citizens of the United States” unless they are
owned by an ANC, CDC, NHO, or Indian tribe.121 Ownership is unconditional when it is not
subject to any conditions precedent or subsequent, executory agreements, voting trusts,
restrictions on or assignments of voting rights, or other arrangements that could cause the benefits
of ownership to go to another entity.122 Ownership is direct when the disadvantaged individuals
own the business in their own right and not through an intermediary (e.g., ownership by another
business entity or by a trust that is owned and controlled by one or more disadvantaged
individuals).123 Nondisadvantaged individuals and nonparticipant businesses that own at least
10% of an 8(a) business may generally own no more than 10% to 20% of any other 8(a) firm.
Ownership is limited to 10% when the 8(a) firm in is the developmental stage of the 8(a) Program
and 20% when it is in the transitional stage.124 Nonparticipant businesses that earn the majority
of their revenue in the same or similar line of business are likewise barred from owning more
than 10% (increasing to 20%-30% in certain circumstances) of another 8(a) firm.125
In addition, 8(a) firms must be controlled by one or more disadvantaged individuals.126 “Control
is not the same as ownership,” and includes both strategic policy setting and day-to-day
management and administration of business operations.127 Management and daily business
operations must be conducted by one or more disadvantaged individuals unless the 8(a) business
is owned by an ANC, CDC, NHO, or Indian tribe.128 These individuals must have managerial
experience “of the extent and complexity needed to run the concern,” and generally must devote
themselves full-time to the business “during the normal working hours of firms in the same or
similar line of business.”129 A disadvantaged individual must hold the highest officer position
within the business.130 Nondisadvantaged individuals may otherwise be involved in the
management of an 8(a) business, or may be stockholders, partners, limited liability members,
officers, or directors of an 8(a) business.131 However, nondisadvantaged individuals may not
exercise actual control or have the power to control the firm or its disadvantaged owner(s), or
119 13 C.F.R. §121.103(a)(6).
120 13 C.F.R. §121.103(h); 13 C.F.R. §121.103(h)(4); and 13 C.F.R. §121.103(i).
121 13 C.F.R. §124.105 (defining unconditional ownership). See also 15 U.S.C. §637(a)(4)(A)(i)-(ii) (requiring at least
51% unconditional ownership).
122 13 C.F.R. §124.3.
123 13 C.F.R. §124.105(a).
124 13 C.F.R. §124.105(h)(1).
125 13 C.F.R. §124.105(h)(2).
126 15 U.S.C. §637(a)(4)(A)(i)-(ii) (requiring control of management and business operations); 13 C.F.R. §124.106.
127 13 C.F.R. §124.106.
128 13 C.F.R. §124.106.
129 13 C.F.R. §124.106 and §124.106(a)(3).
130 13 C.F.R. §124.106(a)(2). The individual must also be physically located in the United States.
131 13 C.F.R. §124.106(e).
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receive compensation greater than that of the highest-paid officer (usually the chief executive
officer or president) without the SBA’s approval.132
Socially Disadvantaged Individual
Socially disadvantaged individuals are “those who have been subjected to racial or ethnic
prejudice or cultural bias within American society because of their identities as members of
groups and without regard to their individual qualities.”133
To establish “social disadvantage,” individuals must show (1) at least one objective distinguishing
feature that has contributed to social disadvantage (e.g., race, ethnic origin, gender, physical
handicap, long-term residence in an environment isolated from mainstream American society);
(2) personal experiences of substantial and chronic social disadvantage in American society; and
(3) negative impact on entry into or advancement in the business world.134 In assessing the third
factor, the SBA will consider all relevant evidence the applicant produces, but must consider the
applicant’s education, employment, and business history to see if the totality of the circumstances
shows disadvantage.135
Economically Disadvantaged Individual
Economically disadvantaged individuals are “socially disadvantaged individuals whose ability to
compete in the free enterprise system has been impaired due to diminished capital and credit
opportunities as compared to others in the same or similar line of business who are not socially
disadvantaged.”136
To establish “economic disadvantage,” individuals claiming economic disadvantage must submit
financial documentation for eligibility purposes.137 The SBA examines the individual’s personal
income for the past three years, their net worth, and the fair market value of their assets.138 To be
economically disadvantaged, an individual must have a net worth of less than $850,000
(excluding ownership interest in the applicant’s business, equity in their primary personal
residence, and funds invested in an official retirement account), no more than $400,000 in
average adjusted gross income over the preceding three years, and no more than $6.5 million in
assets (excluding funds invested in an official retirement account but including the applicant’s
primary residence and the value of the applicant’s firm).139
Good Character
In determining whether an applicant to, or participant in, the 8(a) Program possesses good
character, the SBA considers any criminal conduct, violations of SBA regulations, current
debarment or suspension from government contracting, managers or key employees who lack
business integrity, and the knowing submission of false information to the SBA.140
132 13 C.F.R. §124.106(e)(1) and (3).
133 13 C.F.R. §124.103(a). See also 15 U.S.C. §637(a)(5).
134 13 C.F.R. §124.103(c)(2)(i)-(iii).
135 13 C.F.R. §124.103(c)(2)(iii).
136 13 C.F.R. §124.104(a). See also 15 U.S.C. §637(a)(6)(A).
137 13 C.F.R. §124.104(b)(1).
138 13 C.F.R. §124.104(c). See also 15 U.S.C. §637(a)(6)(E)(i)-(ii).
139 13 C.F.R. §124.104(c)(2)-(4). These thresholds were most recently adjusted for inflation through a 2022 SBA rule.
See 87 Federal Register 69118, November 17, 2022.
140 13 C.F.R. §124.108(a)(1)-(5).
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Demonstrated Potential for Success
For a firm to have demonstrated potential for success, it generally must have been in business in
its primary industry classification for at least two full years immediately prior to the date of its
application to the 8(a) Program.141 However, the SBA may grant a waiver allowing firms that
have been in business for less than two years to enter the program under specified
circumstances.142
Eligibility for Tribally, ANC-, NHO-, and CDC-Owned Firms
Tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs), or
Community Development Corporations (CDCs) themselves generally do not participate in the
8(a) Program. Rather, businesses that are at least 51% owned by such entities participate in the
program,143 although the rules governing their participation are somewhat different from those for
the program generally.144
Small
Firms owned by Indian tribes, ANCs, NHOs, and CDCs must be deemed small under the SBA’s
size standards.145 However, certain affiliations with the owning entity or other business
enterprises of that entity are excluded in size determinations unless the SBA Administrator
determines that a small business owned by an ANC, CDC, NHO, or Indian tribe “[has] obtained,
or [is] likely to obtain, a substantial unfair competitive advantage within an industry category”
because of such exclusions.146 Other affiliations of small businesses owned by ANCs, CDCs,
NHOs, and Indian tribes may be included in size determinations, and ANC-owned firms, in
particular, have been subjected to early graduation from the 8(a) Program because they exceeded
size standards.147
141 13 C.F.R. §124.107.
142 A waiver to the two-year requirement may be granted when (1) the disadvantaged individual(s) upon whom
eligibility is based have substantial business management experience; (2) the business has demonstrated the technical
experience necessary to carry out its business plan with a substantial likelihood of success; (3) the firm has adequate
capital to sustain its operations and carry out its business plan; (4) the firm has a record of successful performance on
contracts in its primary field of operations; and (5) the firm presently has, or can demonstrate its ability to timely
obtain, the personnel, facilities, equipment, and other resources necessary to perform 8(a) contracts. See 13 C.F.R.
§124.107(b)(1)(i)-(v).
143 13 C.F.R. §124.109(c)(3)(i) (tribally and ANC-owned firms); 13 C.F.R. §124.110 (b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
144 13 C.F.R. §§124.109-124.111.
145 13 C.F.R. §124.109(c)(2) (tribally and ANC-owned firms); 13 C.F.R. §124.110(b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
146 13 C.F.R. §124.109(c)(2)(iii) (tribally and ANC-owned firms); 13 C.F.R. §124.110(b) (NHO-owned firms); and 13
C.F.R. §124.111(c) (CDC-owned firms).
147 See Valenzuela Eng’g, Inc. & Curry Contracting Co., Inc., SBA-4151 (1996) (rejecting a challenge to the size of an
ANC-owned firm because its subcontractor performed less than 25% of the work on the contract and was not its
affiliate); and U.S. Government Accountability Office (GAO), Increased Used of Alaska Native Corporations’ Special
8(a) Provisions Calls for Tailored Oversight, GAO-06-399, April 27, 2006, p. 29, at http://www.gao.gov/new.items/
d06399.pdf (describing “early graduation” of ANC-owned 8(a) firms).
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Business
Firms owned by ANCs, CDCs, NHOs, and Indian tribes must be “businesses” under the SBA’s
definition.148 Although ANCs themselves may be for-profit or nonprofit, ANC-owned businesses
must be for-profit to participate in the program.149
Unconditionally Owned and Controlled
Firms owned by ANCs, CDCs, NHOs, or Indian tribes must be unconditionally owned and
substantially controlled by the ANC, CDC, NHO, or Indian tribe, respectively.150 However, under
SBA regulations, tribally or ANC-owned firms may be managed by individuals who are not
members of the tribe or Alaska Natives if the firm can demonstrate
•
•
•
that the tribe (or ANC) can hire and fire those individuals,
that it will retain control of all management decisions common to boards of
directors, including strategic planning, budget approval, and the employment and
compensation of officers, and
that a written management development plan exists which shows how tribal
members will develop managerial skills sufficient to manage the concern or
similar tribally-owned concerns in the future.151
NHO-owned firms must demonstrate that the NHO controls the board of directors.152 However,
the individual who is responsible for the NHO-owned firm’s day-to-day management need not
establish personal social and economic disadvantage.153 CDCs are to be managed and have their
daily operations conducted by individuals with “managerial experience of an extent and
complexity needed to run the [firm].”154
Socially Disadvantaged
Indian tribes, ANCs, NHOs, and CDCs are all presumed to be socially disadvantaged.155 “The
updated application process [resulting from the 2023 district court decision] does not apply to
entity-owned firms, such as firms owned by Indian tribes, Alaska Native Corporations, Native
148 13 C.F.R. §124.109(a) and (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with the special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
149 13 C.F.R. §124.109(a)(3).
150 13 C.F.R. §124.109(a) and (b) (requiring tribally and ANC-owned firms to comply with the general eligibility
requirements where they are not contrary to or inconsistent with the special requirements for these entities); 13 C.F.R.
§124.110(a) (similar provision for NHO-owned firms); and 13 C.F.R. §124.111(a) (similar provision for CDC-owned
firms).
151 13 C.F.R. §124.109(c)(4)(B).
152 13 C.F.R. §124.110(d).
153 13 C.F.R. §124.110(d).
154 13 C.F.R. §124.111(b).
155 13 C.F.R. §124.109(b)(1) (tribally and ANC-owned firms); 15 U.S.C. §637(a)(4)(A)(i)(II) (NHO-owned firms); 13
C.F.R. §124.110(a) (same); 13 C.F.R. §124.111(a) (CDC-owned firms); and Small Disadvantaged Business
Certification Application: Community Development Corporation (CDC) Owned Concern, OMB Approval No. 32450317 (“A Community Development Corporation (CDC) is considered to be a socially and economically disadvantaged
entity if the parent CDC is a nonprofit organization responsible to residents of the area it serves which has received
financial assistance under 42 U.S.C. 9805, et seq.”). The SBA’s authority to designate CDCs as socially and
economically disadvantaged derives from Section 9815(a)(2) of Title 42 of the United States Code, which required
SBA to “promulgate regulations to ensure the availability to community development corporations of such programs as
shall further the purposes of this subchapter, including programs under §637(a) of title 15.”
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Hawaiian Organizations or Community Development Corporations” and those firms are not
required to submit narratives showing their social disadvantage to the SBA.156
Economically Disadvantaged
By statute, ANCs are deemed to be economically disadvantaged, and CDCs are similarly treated
as economically disadvantaged.157 In contrast, Indian tribes and NHOs must establish economic
disadvantage. Indian tribes must present data on, among other things, the number of tribe
members; the tribe members’ unemployment rate and per capita income; the percentage of the
local Indian population above the poverty level; the tribe’s access to capital and assets as
disclosed in current financial statements; and all businesses wholly or partially owned by tribal
enterprises or affiliates, as well as their primary industry classification.158 Effective August 24,
2016, NHOs establish economic disadvantage in the same manner as Indian tribes.159 Prior to this
revision, the SBA considered “the individual economic status of NHO’s members,” the majority
of whom had to qualify as economically disadvantaged, under the same standards as individual
applicants to the program.160
Once a tribe or NHO has established that it is economically disadvantaged for purposes of one
8(a) business, it need not reestablish economic disadvantage in order to have other businesses
certified for the program unless the Director of the Office of Business Development requires it to
do so.161
Good Character
The SBA’s regulations governing tribally and ANC-owned 8(a) firms explicitly state that the good
character requirement applies only to officers or directors of the firm, or shareholders owning
more than a 20% interest.162 NHO-owned firms may be subject to the same requirements in
practice.163 With CDC-owned firms, the firm itself and “all of its principals” must have good
character.164
156 SBA, “Updates on the 8(a) Business Development program,” at https://www.sba.gov/federal-contracting/
contracting-assistance-programs/8a-business-development-program/updates-8a-business-development-program#idguidance-for-potential-a-applicants-interested-in-applying-t.
157 43 U.S.C. §1626(e)(1) (“For all purposes of Federal law, a Native Corporation shall be considered to be a
corporation owned and controlled by Natives and a minority and economically disadvantaged business enterprise if the
Settlement Common Stock of the corporation and other stock of the corporation held by holders of Settlement Common
Stock and by Natives and descendants of Natives, represents a majority of both the total equity of the corporation and
the total voting power of the corporation for the purposes of electing directors.”); 13 C.F.R. §124.109(a)(2) (similar);
and 13 C.F.R. §124.111(a).
158
15 U.S.C. §637(a)(6)(A); and 13 C.F.R. §124.109(b)(2)(i)-(vii).
159 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48571, July 25, 2016.
160 13 C.F.R. §124.110(c)(1). Specifically, for the first 8(a) applicant owned by a particular NHO, individual NHO
members had to meet the same initial eligibility economic disadvantage thresholds as individually-owned 8(a)
applicants. For any additional 8(a) applicant owned by the NHO, individual NHO members had to meet the economic
disadvantage thresholds for continued 8(a) eligibility. If the NHO had no members, then a majority of the members of
the board of directors had to qualify as economically disadvantaged.
161 13 C.F.R. §124.109(b).
162 13 C.F.R. §124.109(c)(7)(ii).
163 The regulations as to NHOs do not appear to address “good character.” However, in practice, when this has
happened in the past, NHO-owned firms have often been treated the same as firms owned by Indian tribes.
164 13 C.F.R. §124.111(g).
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Demonstrated Potential for Success
Firms owned by ANCs, CDCs, NHOs, and Indian tribes may provide evidence of potential for
success in several ways:
1. The firm has been in business for at least two years, as shown by individual or
consolidated income tax returns for each of the two previous tax years showing operating
revenues in the primary industry in which the firm seeks certification.
2. The individuals who will manage and control the firm’s daily operations have substantial
technical and management experience; the firm has a record of successful performance
on government or other contracts in its primary industry category; and the firm has
adequate capital to sustain its operations and carry out its business plan.
3. The owner-group has made a firm written commitment to support the firm’s operations
and has the financial ability to do so.165
The first of these ways for demonstrating potential for success is the same for individually owned
firms, and the second arguably corresponds to the circumstances in which the SBA may waive the
requirement that individually owned firms have been in business for at least two years.166 There is
no equivalent to the third way for individually owned firms, and some commentators have
suggested that this provision may be a benefit for group-owned applicants.167
165 13 C.F.R. §124.109(c)(6)(i)-(iii) (ANC- and tribally-owned firms); 13 C.F.R. §124.110(g)(1)-(3) (NHO-owned
firms); and 13 C.F.R. §124.111(f)(1)-(3) (CDC-owned firms).
166 13 C.F.R. §124.107; and 13 C.F.R. §124.107(b)(1)(i)-(v).
167 Daniel K. Oakes, “Inching Toward Balance: Reaching Proper Reform of the Alaska Native Corporations’ 8(a)
Contracting Preferences,” 40 Public Contract Law Journal 777 (2011).
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Appendix B. Participant Reporting Requirements
8(a) firms must demonstrate program compliance by reporting specific information to the SBA on
an as needed, periodic, or requested basis. Much of the reporting is accomplished through the
required annual review, which focuses on the firm’s business development.168
Annual Review Reporting
To remain eligible for 8(a) program participation, every program participant must submit a
variety of information to the SBA annually, including the following:
•
•
•
•
•
Personal financial information for each disadvantaged owner;
A certification that there have been no changed circumstances which could
adversely affect the Participant’s program eligibility (or notice to SBA of any
changes with relevant supporting documentation);
Records regarding the transfer of assets to any immediate family member, or to a
trust any beneficiary of which is an immediate family member, within two years
of the date of the annual review;
A record of all payments, compensation, and distributions (including loans,
advances, salaries and dividends) made by the firm to each of its owners, officers
or directors, or to any person or entity affiliated with such individuals; and
A list of fees paid to agents or representatives for assistance with obtaining or
seeking to obtain a federal contract.169
If the firm participates in the Mentor-Protégé Program, it must provide “a narrative report
detailing the contracts it has had with its mentor and benefits it has received from the
mentor/protégé relationship.”170 In addition, the firm must provide a report for each 8(a) contract
performed during the year “explaining how the performance of work requirements are being met
for the contract, including any 8(a) contracts performed as a joint venture.”171
Community Benefits Reporting
Group-owned firms must report the community benefits of program participation for tribes,
ANCs, NHOs, and CDCs. SBA regulations state
As part of its annual financial statement submission (see § 124.602), each Participant
owned by a Tribe, ANC, NHO or CDC must submit to SBA information showing how the
Tribe, ANC, NHO or CDC has provided benefits to the Tribal or native members and/or
the Tribal, native or other community due to the Tribe’s/ANC’s/NHO’s/CDC’s
participation in the 8(a) BD program through one or more firms. This data includes
information relating to funding cultural programs, employment assistance, jobs,
168 13 C.F.R. §124.403. Program participant annual reviews are distinct from “eligibility reviews,” which are conducted
by the SBA “Upon receipt of specific and credible information alleging that a Participant no longer meets the eligibility
requirements for continued program eligibility.” 13 C.F.R. §124.112(c)(1).
169 13 C.F.R. §124.112(b).
170 13 C.F.R. §124.112(b)(6).
171 13 C.F.R. §124.112(b)(8).
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scholarships, internships, subsistence activities, and other services provided by the Tribe,
ANC, NHO or CDC to the affected community.172
Author Information
R. Corinne Blackford
Analyst in Small Business and Economic
Development Policy
Acknowledgments
This report was prepared with the help of research conducted by Robert Jay Dilger, former Senior
Specialist in American National Government.
Disclaimer
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172 13 C.F.R. §124.604.
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.