Marketing To The Government

Find a need and fill it. This is the foundation successful businesses are built on. To help your business succeed, the National Business Association (NBA) has researched the steps necessary to help you market to the U.S. Government. With information from the U.S. Small Business Administration (SBA) (www.sba.gov) we hope to help you to get started in the rewarding and lucrative work of government contracting.

Each year the U.S. Government spends billions of dollars
purchasing goods and services from private sector firms.
The Small Business Act authorizes Federal agencies to
conduct procurements that are exclusively reserved for
small businesses.

An integral part of the 8(a) Business Development Program
is the ability of participants to obtain government contracts, through special procedures, as they develop through the program. The SBA has signed a memorandum of
understanding with 25 Federal agencies that permit those
agencies to enter into direct contractual relationships with 8(a) certified firms.

Small Disadvantaged Businesses are eligible for a "price
evaluation adjustment" of up to ten percent when bidding
as a prime contractor. The price adjustment means an
SDB may not have to be the lowest bidder to win a
contract award.
The rules also provide for monetary incentives for large
businesses that use SDBs as subcontractors.

An individual HUBZone firm may have the opportunity to
negotiate sole-source contracts when the government
contracting officer determines sole-source action to be
appropriate. In addition, when submitting an offer in
unrestricted competition, a small HUBZone firm may be
eligible for a price evaluation adjustment of 10%.

Why Be Certified to the SBA SDB, the 8(a) DB, or the HUBZone?

Certification in the SDB, the 8(a) DB, or the HUBZone Program provides benefits by:

Bringing more dollars to an eligible company through SDB procurement mechanisms;

Targeting competition to specific industries where there are disparities; and

Increasing economic activity in distressed communities.
SDB certified companies may benefit in one of two ways.

First, an SDB can qualify for a price evaluation adjustment when bidding as a prime contractor.

Second, all prime contractors are encouraged to use certified SDBs as subcontractors through mandated evaluation factors and optional monetary incentives.

Small businesses are considered SDBs upon successful certification into the SBA 8(a) BD Program. In addition to the benefits available through the SDB Program, 8(a) firms enter into a nine-year partnering relationship with the SBA.

A Business Opportunity Specialist provides coaching to the 8(a) firm to help the company grow and expand its business. HUBZone certified businesses can qualify for specific procurement benefits. Businesses that use these benefits are also helping to improve the economy of the distressed area.

Contract and Other Benefits:

Competitive HUBZone contract benefits

Sole-source HUBZone contract benefits

Full and open competition contract benefits

Other benefits

Hotspots

Competitive HUBZone contracts can be awarded if the contracting officer has a reasonable expectation that at least two qualified HUBZone small businesses will submit offers and that the contract will be awarded at a fair market price.

Sole-source HUBZone contracts can be awarded if the contracting officer does not have a reasonable expectation that two or more qualified HUBZone small businesses will submit offers, determines that the qualified HUBZone small business is responsible, and determines that the contract will be awarded at a fair price.

Full and open competition contracts can be awarded with a price evaluation preference. The offer of the HUBZone small business must not be above 10 percent higher than the offer of the non-HUBZone/non-small business.

(Other Benefits Hotspot)

1. Eligible HUBzone firms can qualify for higher SBA-guaranteed surety bonds on construction and service contract bids. 2. Firms in Empowerment Zones and Enterprise Communities (EZ/EC) can also benefit from employer tax credits, tax-free facility bonds, and investment tax deductions.

What Is Being Certified for the SDB, 8(a) and HUBZone?

To begin with, your business must be classified as small. This is a universal requirement for any SBA certification program.

For SDB and 8(a) certification, the individual seeking certification must own and control the business. In addition, the individual must also demonstrate social and economic disadvantage.

For HUBZone certification, the business must be located in a qualified HUBZone area. A pre-determined percentage of
employees who work for the company must also live in a HUBZone.

Woman-owned or generic small businesses are covered in other programs set up by the Federal Government. Specific information on all categories of Federal Procurement programs can be found in the online course, "Federal Procurement."

You Can Apply to All Certification Programs

Under the right circumstances, an applicant can qualify for all three certification programs. An example of this would be an 8(a) eligible business located in an Historically Underutilized Business Zone.

Although an applicant can apply to all three programs, there is no universal application. The applicant must apply to each of the three certification programs separately. Companies participating in the SBA's 8(a) Business Development Program are already considered
SDBs.

Although there is no universal application, all three certification programs require similar information. These forms include such items as personal financial statements, previous tax returns, SBA forms, and IRS forms.

Demonstrating Your Status to apply for the SBA SDB, 8(a) and HUBZone programs.

To apply to these programs, you must demonstrate that your business meets the basic requirements for admission. Generally, you must show that your small business is unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control.

The U.S. population is broken down into two groups, designated groups and non-designated groups.

For designated groups, the law allows for a presumption of discrimination. The presumption of discrimination may be rebutted.

For non-designated groups, an individual may make an argument for discrimination based on certain types of evidence which include:

At least one objective distinguishing feature that has contributed to social disadvantage such as gender disability, sexual orientation, or living in an economically isolated community;
Personal experiences of substantial and chronic social disadvantage; and
Negative impact on one's education, employment entry, and advancement in the business world.

Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.

In assessing the personal financial condition of an individual claiming economic disadvantage, his or her net worth may not exceed the limit set by law.

For the SDB Certification Program, net worth must be less than $750,000 after taking into account certain exclusions applicable by law.

For initial 8(a) Business Development (BD) eligibility, the net worth of an individual claiming disadvantage must be less than $250,000 after taking into account certain exclusions applicable by law.

What Are the Salient Differences Between the SBA SDB, 8(a) and HUBZone programs?

You should consider several factors in order to determine which program to apply to. Ultimately this must be a business
management decision.

First, consider where your business is in its growth.

Is your business just starting?

Are you ready to expand your business?

Do you deal in sophisticated business deal making or complex contractual arrangements?

Do you have generous credit?

Do you seek large business or the federal government as a component of your market?
If you answered "yes" to any of the questions above, then it's likely you could benefit from one or more of the certifications.

There are two major differences between the SDB, 8(a), and HUBZone Programs.
SDB and HUBZones are essentially contractor programs designed to expand economic opportunity for disadvantaged businesses.

In contrast, 8(a) is a business development program that is characterized by a tangible relationship with the SBA, one that
provides business advice and coaching. This is not the case for the SDB and HUBZone Programs.

8(a) certified companies are assigned a Business Opportunity Specialist (BOS), an SBA employee, who advises and coaches them in business matters.

To learn more, please visit the SBA Web site at http://www.sba.gov/
or
http://www.sba.gov/training/certprograms.html

To print or download an application for 8(a) Business Development (SBA Form 1010), click here

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