The SBA's 8(a) Program

and why you should support it

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The Small Business Administration runs something called the 8(a) Business Development Program. Basically, it is a federal initiative designed to help small businesses owned by socially and economically disadvantaged individuals compete in the government contracting marketplace. (The 8(a) are not the only small businesses that the government patronizes.)

“Disadvantaged” is interpreted loosely, and—contrary to a popular narrative about it—there are many white people who own businesses that are members, including veterans, the disabled, and those operating in HUB (historically underutilized for business) zones. The program provides qualifying businesses with access to sole-source contracts, set-aside opportunities, mentorship, and training to help them grow and succeed. The goal is to promote economic opportunity and level the playing field for historically underrepresented entrepreneurs by giving them a fair chance to secure government contracts. Participation lasts up to nine years, during which businesses receive support to become competitive in the broader market.

I recently did a data science project looking into the program, and specifically comparing it to contracts that go through what is called “Full and Open Competition,” abbreviated FOC.

I have put this project into a Google Colab notebook so that anyone who wants to do so can look at it and see how I got to my conclusions. You will find the link below.

Here’s part of the introduction:

Why I Looked Into This

The 8(a) Business Development Program is a federal initiative designed to help small, disadvantaged businesses compete in the American economy by providing access to government contracts and specialized business training. It's extremely successful -- 8(a) graduates have a significantly higher survival rate than most small businesses do.

There were multiple reasons for my investigation, but just one of those reasons is relevant to publishing it: I did this, in part, because I know a lot of good things about the 8(a) program and feared that people would want it gone, since America is kind of having a Federal-cost-cutting orgy at the moment, taking a chainsaw to everything possible that gets any government money.

I'm right there with those people on nonsense like transgender opera in Ecuador and some of the other stupidity -- but I support the government supporting small businesses because I want a small government.

If the government stops patronizing small businesses, guess what? It's still going to need uniforms for Marines, IT services, tanks, expert advice, VA doctors, and the rest of the things it pays for.

I prefer private companies to do business with the government, rather than the government trying to build its own factories, train its own doctors, and otherwise do all its own stuff.

But Americans are not in a mood for nuance at the moment.

We are doing surgery with butcher knives.

So, if I was going to defend the 8(a), in writing or otherwise, I wanted to be able to back it up.

Obviously, this constitutes a bias on my part in favor of the 8(a) programs. I compensated for this by loading the dice in favor of its opponents.

To maintain objectivity and strengthen the case for 8(a) contracts, I employed extremely pro-FOC assumptions throughout, as you will see.

The Appendix shows that I gave the FOC process an $8,200,000,000 benefit of the doubt. This implies that the case for 8(a) is significantly stronger than I have laid out, but I decided to err on the side of the FOC process to make the strongest and most robust case possible.

My goal was to do it well enough that most honest brokers would say I probably went at least a little too far in the direction of favoring FOC over 8(a).

Thank You To the Testers

After posting on Notes asking for testers for the notebook — I wanted to make sure that it would work for people on different devices, of different tech-expertise levels, etc. — I got an overwhelming response, with multiple volunteers for every type of tester/device I was looking for. Some of them hadn’t responded yet when I published this, and I want to apologize for not waiting — I knew it would take a long time to go through and some people couldn’t just jump on the project, so I accepted multiple offers at every spot.

It’s a fairly long read for most people, making Saturday night/Sunday morning the ideal time to publish. Your willingness to help is noted and appreciated, especially given what a rough time I’m having these days. Thank you.

Here’s the link. PLEASE read the instructions; following them will prevent every conceivable problem of which I am aware.

Enjoy!

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Comments are closed; I’m both too tired and too busy today to read and respond.

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