The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues Page: 5 of 34
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The "8(a) Program" for Small Businesses
C ommonly known as the "8(a) Program," the Minority Small Business and Capital
Ownership Development Program is one of several federal contracting programs for small
businesses.' The 8(a) Program provides participating small businesses with training,
technical assistance, and contracting opportunities in the form of set-asides and sole-source
awards. A "set-aside" is an acquisition in which only certain contractors may compete, while a
sole-source award is a contract awarded, or proposed for award, without competition. Eligibility
for the 8(a) Program is generally limited to small businesses "unconditionally owned and
controlled by one or more socially and economically disadvantaged individuals who are of good
character and citizens of the United States" that demonstrate "potential for success."2 However,
small businesses owned by Indian tribes, Alaska Native Corporations (ANCs), Native Hawaiian
Organizations (NHOs), and Community Development Corporations (CDCs) are eligible for the
8(a) Program under somewhat different terms. In FY2013, the federal government spent $14
billion on contracts and subcontracts with 8(a) firms.3 Other programs provide similar assistance
to other types of small businesses (e.g., women-owned, HUBZone).
The 8(a) and other programs for small businesses are of perennial interest to Congress, given that:
It is the declared policy of the Congress that the Government should aid, counsel, assist, and
protect, insofar as is possible, the interests of small-business concerns in order to preserve
free competitive enterprise, to insure that a fair proportion of the total purchases and
contracts or subcontracts for property and services for the Government (including but not
limited to contracts or subcontracts for maintenance, repair, and construction) be placed with
small-business enterprises, to insure that a fair proportion of the total sales of Government
property be made to such enterprises, and to maintain and strengthen the overall economy of
the Nation.4
However, recent Congresses have had particular interest in the 8(a) Program because of the
recession of 2007-2009,5 its effects on minority-owned small businesses,' and small businesses'
role in job creation.'
This report provides a brief history of the 8(a) Program, summarizes key requirements, and
discusses legal challenges alleging that the program's presumption that members of certain racial
1 See generally CRS Report R41945, Small Business Set-Aside Programs: An Overview and Recent Developments in
the Law, by Kate M. Manuel and Erika K. Lunder. The 8(a) Program takes its name from one of the sections of the
Small Business Act that authorizes it. The program is also governed by Section 7(j) of the act.
2 13 C.F.R. 124.101.
3 See Small Business Goaling Report: Fiscal Year 2013, available at https://www.fpds.gov/downloads/top requests/
FPDSNG_SB_GoalingFY_2013.pdf. The report on FY2014 has not yet been compiled.
4 Small Business Act of 1958, P.L. 85-536, 2(a), 72 Stat. 384 (July 18, 1958) (codified at 15 U.S.C. 631(a)).
5 See, e.g., Phil Izzo, Recession Over in June 2009, Wall Street J., September 20, 2010, available at
http://blogs.wsj.com/ economics/2010/09/20/nber-recession-ended-in-june-2009/ (discussing the recession of 2007-
2009).
6 See, e.g., Small Bus. Admin., The Small Business Economy: A Report to the President 3 (2009), available at
http://www.sba.gov/ADVO/research/sb_econ2009.pdf ("The credit freeze in the short-term funding market had a
devastating effect on the economy and small firms."); John Rosenthal, Tough Times Often Even Tougher on Minority
Biz, Chicago Business, November 30, 2009, available at http://www.chicagobusiness.com/cgibin/mag/article.pl?
articleld=32738&seenlt=1.
7 See, e.g., Mark Trumbull, Why Obama Job Creation Plan Focuses on Small Business, The Christian Science Monitor,
December 8, 2009, available at http://features.csmonitor.com/politics/2009/12/08/why-obama-job-creation-plan-
focuses-on-small-business (noting that small businesses are reported to have created 65% of all new jobs in the United
States over the past 15 years).Congressional Research Service
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Manuel, K. M. The “8(a) Program” for Small Businesses Owned and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues, report, November 26, 2014; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc806963/m1/5/: accessed June 6, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.