Author: 
Dion Persson
Subtitle: 
The Small Business Administration has adopted a business development program under Section 8(a) that provides certain advantages to help small disadvantaged businesses compete in the American economy and access the federal procurement market.

A small business may qualify for the Small Business Administration business development program by meeting the following standards:

Important Tip Business development programs can provide valuable benefits for companies that legitimately qualify for their benefits.
  • the company must be a small business
  • the company must be owned by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and
  • must demonstrate potential for success.

Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control. In the absence of evidence to the contrary, individuals who are members of the following designated groups are presumed to be socially disadvantaged:  Black Americans, Hispanic Americans, Native Americans and other minority groups.

Because of many attempts by non-qualified individuals to establish their small business in ways that attempt to meet the SBA 8(a) requirements without having the proper substance, we believe there are three key items that must be met to have the small business legitamately meet the required tests

  1. The owners must have obtained their ownership in a bona fide transaction
  2. The owners must have the proper experience to run the small business
  3. The owners must have true and fairly complete control over the small business

In order to prevent abuse, the SBA has established a complaint process that results in an investigative effort by the Small Business Administration.  These complaints may be made by disgrunteld employees, customers and others.

The seriousness of these complaints can be found in a recent Colorado court case involving the owner of Native American Sales, Incorporated (NAS).  An ex-employee filed a complaint with the Small Business Administration "because he did not want to see NAS take advantage of the 8(a) program.  Thereafter the Federal Bureau of Investigation, the Internal Revenue Service and the Small Business Administation investigated NAS.  As a result of the investigation, the owner was indicted on 91 felony counts.

 

Additional Information
Important Tip: 
Business development programs can provide valuable benefits for companies that legitimately qualify for their benefits.
Marketing copy: 
Qualifying for Business Development Programs