8(a) Certification Seems Promising But More Research is Needed

The U.S. Small Business Administration's 8(a) Business Development Program was created to help small businesses owned by socially and economically disadvantaged individuals gain business skills and access to federal contracting opportunities so that they can better compete in the open marketplace. A recently published U.S. Small Business Administration (SBA) report, Evaluation of 8(a) Certified Firms, provides rigorous evidence that the 8(a) program generally improves federal contracting opportunities among participating Socially Disadvantaged Businesses (SDBs), compared to otherwise similar non-participating businesses with similar characteristics. The quasi-experimental design study showed the following:

  • 8(a) program participants are 51 percentage points more likely to obtain a prime federal contract in the first 4 years after joining the program compared to otherwise similar non-8(a) certified businesses.
  • 8(a) businesses also obtain prime contracts at a much faster rate.
  • A disproportionate number of prime contract awards to 8(a) certified firms were to those that also have additional SBA socioeconomic program designations and/or are participants in joint ventures. 
  • Once SDBs graduate from the 8(a) program, they are likely to experience a decrease in the value of prime contracts.

For instance, businesses that are both 8(a) and HUBZone certified are 15 percentage points more likely to obtain a prime federal contract compared to businesses that are just 8(a) certified. Similarly, 8(a) businesses that are also a Veteran-Owned Small Business (VOSB) and a Women-Owned Small Business (WOSB) are 12 and 4 percentage points, respectively, more likely to obtain a prime contract. More research is needed to better understand the underlying reasons why SDBs with multiple socioeconomic designations have better procurement outcomes than otherwise similar businesses with no other certifications or with just 8(a) certification. Moreover, it is also important to understand the long-term outcomes, post-8(a) graduation. 

This study translated these findings into a list of actionable recommendations that will inform 8(a) program implementation and promote equitable access in the federal marketplace moving forward. For more information see the full report at https://www.sba.gov/document/report-evaluation-8a-certified-firms.

Enabling Real-Time, Data-Driven Public Policy

Located at the University of Maryland's Discovery District, Optimal Solutions Group, LLC is an innovative and rigorous small minority-owned, policy research, data analytics and software development firm.

Optimal has worked with the SBA since 2010 in evaluating small business economic development programs such as:

  • Regional Innovation Clusters
  • T.H.R.I.V.E Emerging Leaders
  • HUBZone Program
  • Microloan Program
  • Boots-to-Business Veteran's Entrepreneurship
  • Community Navigators Pilot Program
  • Women-Owned Small Businesses

Optimal also brings actionable, evidence-based research on entrepreneurship, business assistance, and lending to multiple federal government agencies such as the National Institute of Standards and Technology's Manufacturing Extension Partnership (MEP) and the U.S. Agency for International Development (USAID). Optimal provides these agencies with program and impact evaluations and data analytics to support accountability and continuous quality improvement.

If you'd like to know more about Optimal, our projects and how we can help you, please contact us at [email protected].

November 10, 2022

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