Presented by:

Exceed Corporation and MindFinders

September 19, 2013

CMBD Workshop:Life After 8(a)

• What is the 8(a) Program?

• Benefits of the Program

• SBA Progress Monitoring

• 8(a) Program Statistics

• Ready to Graduate?

• Life After 8(a)

• How to Prepare for Life After 8(a)• SBA Requirements and Measurements

• Recommendations

• Open Discussion

Agenda

• It is a Business Development Program; not a Contracting Program

• Designed by the U.S. SBA to assist small disadvantaged businesses with their efforts to compete in the federal procurement marketplace

• Firms must be 51% owned and controlled by socially and economically disadvantaged individuals

• Applicant must have a personal adjusted net worth of less than $250K at the time of 8(a) application submission

• Program duration is nine years: a four-year development stage and a five-year transition

The overall goal of the Program is to graduate firms that will go on to thrive in a competitive business environment.

What is the 8(a) Program?

• Sole-source awards up to:• $4M for goods and services

• $6.5M for manufacturing

• Compete for 8(a) set-aside procurements

• Compete in limited, invitation only, procurements

• Faster contract awards

• 8(a) contracts cannot be protested; only the size of the 8(a) participant can be questioned

• More frequent invoice submissions (twice per month, if requested)

• Form joint ventures

• Specialized training, counseling, marketing assistance, and executive development

• Learn from more experienced firms through the Mentor-Protégé Program

• Access to surplus government property and supplies

• SBA-guaranteed loans and bonding assistance

Benefits of the Program

• Annual reviews

• Business planning

• Systematic evaluations

SBA Progress Monitoring

• 5,400 8(a)s nationwide

• 1,200 in DC Metropolitan area, which includes Maryland and Northern Virginia• 2012 - $4.2B awarded to 8(a) firms; 24,511 contracts ($171K per

contract)

• 2013 (through 8/19) – $3.6B awarded to 8(a) firms; 20,678 contracts ($174K per contract)

• 111 terminated this year, including 37 dropouts

• 200 per year graduate

• 200 per year certified

• Overall numbers declining

8(a) Program Statistics

Ready to Graduate?

The Graduate

• Large companies less eager to meet with you

• 8(a)s more eager to meet with you; they want your business!

• Profit margins will go down

• M&A cold calls will go up

• Unlike other graduations, champaign celebrations will not be in order

• The only thing that matters is the value that you bring; contracting advantages are neutralized

Life After 8(a)

How to Prepare for Life After 8(a)

Graduation

• Establish non-8(a) business base: 55% of revenue on the 5 th year of the Transition Stage

• Comply with 8(a) reporting and review requirements

• Fully utilize the Program training, counseling, and assistance programs

SBA Requirements and Measurements

• Develop and implement a strategic plan• Document where you are going and how you will get there

• Develop and maintain strategic relationships with viable trusted firms (large and small) based upon your company’s capabilities, not your certification

• Put it in writing

• Develop and maintain professional client relationships• Bring value and have a positive impact on your clients; don’t just answer the mail

• Perform

• Develop your organization, especially BD and finance• Strong opportunity identification, qualifying, and prepositioning capability

• Strong proposal development capability

• Strong pricing capability

• Acquire corporate and staff certifications and credentials

• Establish strong banking relationships

• Maintain more than adequate cash reserves

Recommendations - General

• Have trusted 8(a)s ready to prime your recompete(s); bring 8(a)s onto the team, prior to the recompete for past performance purposes

• Collaborate with your clients to identify qualified successor 8(a)s to partner with

• Bring on 8(a)s that offer something in return

• Conduct comprehensive partner due diligence activities, even if you know and trust your partners, especially regarding financial strength and payment history

• Put it in writing!

• Graduate with competitive indirect rates and wrap rate(s)

• Acquire as many long term, multi-year contracts as possible during the last year of certification

• Perform

• Resist the temptation to focus primarily on 8(a) opportunities

• Delete all references to 8(a) from Company website and materials after graduation…it no longer matters

• Become a mentor

Recommendations – 8(a) Specific

Open Discussion