New Research Findings Create an overall strategy to increase your 8(a) contract awards using these five effective strategic practices
Introduction
Although the U.S. government stresses the importance of small businesses in government contracting, small business owners continue to face challenges in securing and maintaining contracting opportunities[1].
In my 2021 DBA Capstone, I explored how owners of small businesses can address the challenges and barriers that can prevent you from successfully participating in federal contracting[2]. Researchers, Federal buyers, practitioners — including Judy Bradt — and 8(a) business owners shared their experiences with me.
My research revealed five key strategic practice areas that may increase the likelihood of your 8(a) firm winning federal contracts and becoming a sustainable business after graduation from the 8(a) program.
In this post, I share findings from that new research to help you on your road to success.
NOTE: This article is written in my personal capacity and does not represent the position of the United States government. The information contained in the post is based on research associated with my 2021 doctoral capstone and is not in any way based on my government employment experience.
What is the Purpose of the 8(a) Business Development Program and Why Does it Matter?
Eligible small businesses could increase their ability to develop, grow, and maintain their presence in government contracting by using a strategic approach[3] to winning 8(a) contracts while they are part of the program. Successful 8(a) graduates use other specific strategies to win federal contracts[5].
The purpose of the 8(a) Business Development program is to improve the ability of disadvantaged small businesses to compete in the U.S. economy[4] by limiting competition through the sole-source and set-aside contracting opportunities[6].
The U.S. Small Business Administration (SBA) offers special consideration through set-aside and sole source contracting opportunities to aid 8(a)-certified firms in developing into a sustainable business that can participate in the larger marketplace as a stronger, more sustainable company[7].
In 1988, Congress mandated 23% of federal government prime contracting dollars be set aside for small businesses, including 5% of prime and subcontracts for disadvantaged small businesses[8]. During the period from FY2014 to FY2017, 23% of program entrants from FY2008 did not receive open competition contract awards[9].
Here are the five key strategic practice areas I discovered that can increase the probability of successfully winning 8(a) contracts.
How to Win 8(a) Federal Contracts
- Build Essential Relationships: 8(a)-certified firms must establish relationships with SubContractors, Teaming Partners, Contracting Officers, Customers, and PTACs in various ways that influence the bidding outcome. To build relationships:
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- Develop and participate on prime and subcontractor teams [4],[10],[11]
- Search for and team up with large businesses [4]
- Be party to one or more joint ventures or Mentor-Protégé by the end of year one [4]
- Develop and participate on teams as prime and subcontractor, Mentor-Protégé; and Joint Ventures [11]
- Develop relationships with contracting officers, customers, and Procurement Technical Assistance Centers (PTACs) [11]
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2. Increase Technical Expertise: Successful 8(a)-certified firms have skills or experience that can show the government the same or similar work has been successfully completed by the firm. Gaining past performance can positively influence the bidding outcome. To increase technical expertise:
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- In years one through three, focus on winning as many 8(a) opportunities as possible without exceeding size standards [10]
- In years four through six:
- Bid to learn [11]
- Obtain technical expertise and past performance that can be obtained with the execution of beneficial sole-source and set-aside contracting opportunities obtained through the 8(a) program [11]
- Build new business based on the past performance [10]
- With every unsuccessful bidding attempt, ask the government for a debrief to learn what you can do better on future bidding attempts [11]
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3. Improve the Quality of Proposals: Successful 8(a)-certified firms understand the requirements of the RFP and use increasing technical writing skills to prepare high-quality proposals. These technical writing skills include a detailed technical description of work to be completed, competitive pricing, an effective staffing strategy, and an organized presentation. The quality of the proposal can influence the bidding outcome. To improve the quality of your proposals:
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- Ensure you have a good understanding of the request for proposal and pose questions to the government in the event that clarification is necessary [11]
- Build a solid staffing strategy [11]
- Improve your technical writing skills [11]
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- Implement a Marketing and Business Development Plan: Successful 8(a)-certified firms use networking by attending events, conferences, having association memberships, or other social networking channels, and undertake marketing activities to promote the selling of a product or service. The marketing and business development strategies can influence the bidding outcome. To use marketing and business development throughout the life of the program:
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- In years one through three:
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- Ensure 95% of all bids are for 8(a) or small business set asides and 5% of all bids are for full and open competition [4]
- Focus on winning as many 8(a) opportunities as possible without exceeding size standards [10]
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- In years four through six:
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- Ensure 75% of all bids are for 8(a) or small business set asides and 25% are for full and open bids [10]
- Undertake Search Letter campaigns [4]
- Build new business based on past performance [10]
- Undertake marketing and business development efforts with other 8(a) companies [11]
- Use available access to the government facilities to visit contracting officers and customers [11]
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- In years one through three:
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- In years seven through nine (and within the extra year ten if applicable):
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- Ensure 50% of all bids are for 8(a) or small business set asides and 50% for full and open bids [10]
- Continue to meet 8(a) business activity targets [4], [10]
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- In years seven through nine (and within the extra year ten if applicable):
- Communication: Successful 8(a)-certified firms maintain an open line of communication between all parties, allowing questions to be answered influencing the bidding outcome [11]
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- Submit the bid timely
- Follow up with the government official after submission of a bid to ensure it received in whole prior to the bidding deadline [11]
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Closing
Upon graduation from the 8(a) program, many 8(a)-certified firms are not prepared for business continuity and competition in the federal marketplace because they become reliant on the program’s limited competition. [4] During the 9-year program, many 8(a) principals do not gain the experience necessary for full open competition. [4] Many 8(a) principals opt to compete only within the protected and limited set-aside environment against comparable businesses experiencing similar challenges and resource constraints, creating a false sense of security. [4]
Beyond the limited competition of the 8(a) program, 8(a) principals must be prepared to compete with significantly more substantial companies that may have better resources to overcome barriers to federal contracting. [12] Despite the objective of the 8(a) program to foster small business growth through participation in the federal market, 60% of 8(a) graduates are no longer receiving awards for federal prime contracts ten years after graduation. [12]
The strategic practice areas outlined above were deduced from a review of existing literature and a recent study of the bidding outcomes of experienced 8(a) principals. Principals of 8(a) firms may use these strategic practice areas to develop an overall strategy and prepare for successful transition from the 8(a) program into a sustainable federal contracting firm.
Call to Action
Creating a strategic plan for your 8(a)-certified firm may improve your federal contract bidding outcomes and aid in preparing your firm for a successful transition from the 8(a) program into a sustainable business outside of the program.
About the Author
Dr. Sherri Johnston is a professor at Columbia Southern University. She is also Supervisory Senior Data Analyst, Manager, Advanced Analytics Team, for the Naval Facilities Engineering Command. Contact: sherri.johnston@columbiasouthern.edu