What Is an 8(a) Company?

by Quentin Coleman; Updated September 26, 2017

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.

Purpose

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.

Uses

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.

Eligibility

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.

About the Author

Quentin Coleman has written for various publications, including All Pet News and Safe to Work Australia. He spent more tan 10 years nursing kittens, treating sick animals and domesticating semi-feral cats for a local animal shelter. He graduated from the University of Delaware with a bachelor's degree in journalism.