Competition heats up for 8(a) program

While woman-owned businesses have always been eligible to participate in the federal government's 8(a) program for socially and economically disadvantaged small business owners, it was a loosening of program requirements three years ago that significantly increased the participation of such businesses.

"The requirements for white woman-owned businesses are now less stringent," said Luz Hopewell, associate administrator for business development at the Small Business Administration, which runs the 8(a) program. "The application must be able to document [in writing] that they've been discriminated against. Ethnic minorities are presumed to be disadvantaged."

According to SBA, 1,770 woman-owned businesses belong to the 8(a) program, or 26 percent of the program's total participants. In addition to providing general business development assistance through mentoring and business counseling programs, the 8(a) program provides federal contracting opportunities to participating businesses.

Most of the business opportunities come in the form of set-asides, or federal contracts that are earmarked for 8(a) companies. For contracts that involve services, such as information technology, those under $3 million can be awarded to a single 8(a) company without being put out for bid. For those contracts valued at more than $3 million, agencies must compete the contracts among 8(a) firms.

"There's a misperception that it's a handout program, but the competition has become fierce for 8(a) work, which has improved the overall quality of 8(a) firms considerably," said Jeannette Lee White, chief executive officer of Sytel Inc., a systems integrator and former 8(a) participant in Bethesda, Md. Sytel ranks 10th on Federal Computer Week's 2002 list of woman-owned firms in the federal IT market.

The 8(a) program itself does not have any specific goals for how much agency work must be set aside for the program. However, in a separate but related program, the Small Business Act sets a goal of 23 percent of all federal prime contract awards going to small businesses each year. At least 5 percent of that amount must go to small disadvantaged businesses and 5 percent to woman-owned small businesses.

"The 8(a) program can be used as a mechanism by agencies to reach those goals," Hopewell said. "We ask agencies to use the 8(a) program to meet at least half of their [Small Business Act] goals."