The Impact of 8(a) Small Business Graduation

Abstract

The 8(a) small business set-aside program is designed to support small business participation in the federal market and to foster small business growth. However, 8(a) graduates do not fare well over time, with more than 60% no longer receiving federal prime contract obligations less than 10 years after graduation from set-aside eligibility. Those who were still federal prime contractors gained very little additional government business, with the average contract obligation up only 3.3% to $6.25 million, from $6.05 million (showing a decline when adjusting for inflation). Additionally, 8(a) graduates still depended on set-asides for more than half of their federal prime contract dollars. Overall, they are not rewarded for graduation.