Program Nurtures Minority Firms' Growth

The Washington area has the highest concentration of government contractors in the country. One important reason for this thriving local contracting industry is the presence of government programs to nurture small and minority-owned businesses.

The Small Business Administration administers the 8(a) program. Participating companies can benefit from quotas that require federal agencies to give a certain percentage of their contract dollars to small businesses. For some contracts, firms in the program do not have to participate in a competitive bidding process. Companies are expected to eventually wean themselves off these advantages and win jobs from private firms.

Joseph Loddo, the district director of the Small Business Administration, recently spoke to Washington Post staff writer Anitha Reddy about how the program works and a proposed change to measure the size of businesses by the number of employees rather than annual sales.

Q Who is eligible for the 8(a) program?

AGenerally the business must be a small business that 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. The business must be at least two years old and demonstrate the potential for success.

That means we would look carefully at overdue taxes or criminal records. We would also examine the experience of the management team and the products and services that they're offering. Clearly we're looking to ensure that the business has the capacity as well as the capability to perform on a contract on time.

Certain groups, such as African Americans, Hispanic Americans, Native Americans and others are automatically considered socially disadvantaged, but other individuals who can prove they have been socially disadvantaged are accepted. Economic disadvantage means that the individual has less than $250,000 in net worth, exclusive of their business and primary residence.

Could you describe the application process?

An SBA representative will answer general questions and direct the individual to the Internet Web site www.sba.gov, where he or she can access the application package. Most district offices have workshops to provide additional information. A decision will be made within 90 days of receipt of a complete application.

Once they finish the application process and they're approved for the program, they come to the district office for an orientation program and meet their business opportunity specialist. That's the beginning of a nine-year relationship.