An 8(a) business is a company approved by the U.S. Small Business Administration under section 8(a) of its business development program. This program makes it easier for eligible small businesses to win and work on government contracts.
The stated goal of the Small Business Administration is to increase the health and stability of the U.S. economy by supporting small business opportunities. The 8(a) program increases the viability of small businesses competing with larger service providers for contracts with the U.S. federal government.
The 8(a) classification is only applicable to contracts with the federal government; it does not affect commercial or state government contracts. Companies accepted into the program receive better compensation and may be awarded sole contracts, which designates them as the only provider of a particular service to a federal organization.
Companies are only eligible if at least 51 percent of the ownership interests belong to one or more disadvantaged Americans. The owners of an applying company must meet the U.S. definition of a socially or financially disadvantaged person. Owners may present evidence to prove their qualification for the disadvantaged status if they do not automatically qualify.