8(a) Firms In Decline Per SBA Data

SBA LogoCurrently the number of 8a certification program participants is in decline while the federal procurement dollars spent with 8a certified firm’s remains in the $30-35 billion dollar annually range. Here are some basic stats:
Year / Number of 8a firms (approximately)
2007 / 9,500
2009 / 8,800
2013 (4-15-2013) / 8,000

This data represents a 17% decline in 8a firms.

With GSA issuing contracts for their Government Wide Acquisition Contracts (GWACS) in the 8(a) categories to record numbers (STARS for example), getting access to a task vehicle is nearly a shoe-in for the majority of applicants. So why then is the number of new 8(a) certifications by SBA decreasing?

The answer seems to be the inability of many applicants to meet the criteria for SBA certifications. I have been able to find the raw application numbers to confirm that increasing applications for 8(a) are in fact happening, but the hunt is on for the root cause of fewer certifications. Minority populations are on the rise and small business creation is similarly increasing. It seem unlikely that the environment supports lower 8(a) populations. So that leaves the SBA certification process and criteria as the most likely cause of decreased approvals…

According to the SBA approximately 2,500-2,600 firms apply for the 8a certification annually. With approximately 1,000+ new 8a certifications needed in order for the number in the program to hold constant. However in recent years the number of new firms being admitted into the program has fallen to between 800-900 firms per year. In general terms as the SBA has increased application scrutiny over the last couple of years, the at large approval rate for firms has fallen to around 35%. However the approval rate for people using a consulting firm is in the high 95% approval rating. Which means the likelihood of successfully completing the 8a application without the aid of a consultant is most likely substantially less than 35%. Here I thought SBA was created to aid small businesses, not foster consultants!

Just saying …

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