Major Changes Underway at GCS Inc. – A La Carte 8a Services Debut

After much discussion and careful thought, the senior partners at Government Certification Specialists Inc. have decided to make some major changes at the company.

We are discontinuing our full 8(a) application service in lieu of an a la carte menu of specific 8(a) services. Here are a few reasons why we think you will like this new a la carte approach better:

1. Lower prices. Most GCS clients don’t want to pay several thousand dollars for a full 8(a) application service. The recession might technically be over, but small businesses in America still have tight budgets and narrow profit margins to maintain. We hear you loud and clear! Our goal is to offer you 8(a) products and services you can actually afford.

2. Only buy the 8(a) help you need. Most GCS clients are highly educated professionals who are perfectly capable of executing routine 8(a) application tasks on their own; they don’t need a consultant’s help to execute that stuff. What our clients actually want and need is targeted, highly specific 8(a) help that addresses discrete obstacles, anomalies and unusual problems. You want succinct answers, and you want them quickly. That is what we will aim to provide.

3. Emphasis on DIY resources. As independent business owners, GCS clients typically want full control over their own 8(a) applications. We understand this, so we have developed a series of inexpensive kits, templates and examples that we have available for download over on our site http://www.8aapplication.com. If you don’t see a kit you want, email us your kit suggestion and we will consider putting it into production if we receive enough requests.

Also, the SBA keeps on improving and refining the information it provides you free of charge on its site, http://www.sba.gov. If you have not been there in a while, go check out the SBA’s progress and read their new 8(a) resources. We think you will find them easier to understand than past SBA literature about the 8(a) program. Of particular value is this page every 8(a) applicant should read before beginning the application process:

http://www.sba.gov/content/additional-information-before-you-apply

Over the next several weeks, you will see our new menu of a la carte 8(a) services emerge on the main GCS Inc. website, http://www.get8acertified.com.

In the mean time, here is a fast rundown of our a la carte 8(a) services and their new prices, all of which will remain in effect until at least 12/31/2014:

  1. Personal narrative statement of economic disadvantage–$600 prepaid (usually 3 pages)
  2. Personal narrative statement of social disadvantage–$1,200 (usually 15-20 pages)
  3. 8(a) Application Length of Time in Business Waiver–$500 prepaid
  4. 8(a) Annual Update–$795 prepaid (does not include updates to your business plan)
  5. 8(a) Business Plan on SBA Form 1010C–$2,800
  6. Hourly consulting rate for senior specialist help, $150/hour, with mutually agreed upon cap on hours
  7. Hourly consulting rate for junior specialist help, $60/hour, with mutually agreed upon cap on hours
  8. 8(a) business 1-page Capability Statement (text only)–$500 prepaid
  9. 8(a) Request for Reconsideration–price will vary based on individual circumstances; ask for quote
  10. 8(a) Correspondence Service–price will vary based on individual circumstances; typical letter averages around $300-$600

If you are interested in any of these a la carte 8(a) services, please send us an email, and one of our specialists will respond to you:

info@get8acertified.com

We do have a telephone number, but it rings constantly, so we recommend email for first contact to get a faster response from us. Thank you and we look forward to hearing from you.

8(a) Company Recordkeeping

You’ve been 8(a) certified and you have started your networking, sales and business development efforts in earnest. Before you get too far, however, take a moment to organize your 8(a) paperwork so you will be in good shape in one year when it is time to submit your 8(a) annual update.

Place your signed 8(a) Participation Agreement and your most recent version of your 1010C business plan in a safe place, and refer to them often. Know the 8(a) rules in and out so you don’t accidentally violate a key rule or regulation. Bear in mind your 8(a) business plan goals as you market and sell during the year.

Keep track of all of your marketing, sales and business development meetings. Some Business Development Specialists demand to see a detailed log of marketing visits as a part of the annual update.

Also keep track of your bidding activity. You will want to know how many local government, state government, federal government and commercial projects you bid on during the year. You will want to keep track of how many bids you win and how many you lose.

When tracking your federal bids and wins, categorize them as 8(a) sole source awards, 8(a) competitive awards, full and open competition awards and other sole source awards (for example, an SDVOSB sole source project for the VA).

All of this data will get reported in your 8(a) annual update, so start your program year off right and maintain detailed records from the start to save yourself a lot of aggravation later.

Need help with your 8(a) application or business plan? GCS Inc. offers you free and low-cost kits and information on our site http://www.8aapplication.com.

SBA 8a Response Letters: Don’t Take the Agency’s Tone Personally

Many clients of GCS Inc. have either complained about or been unnecessarily frightened by the tone of the response letters they have received from the SBA after submission of an 8(a) application.

Don’t take the tone of these SBA 8(a) response letters personally. The agency processes hundreds of applications per year and often uses boilerplate language to respond to you that sounds rather stern. Some people even feel the tone verges on mean or vindictive. This is just a matter of perception, because the agency is not trying to be mean or vindictive. The fact of the matter is that the “bureaucratic voice” of a government agency can sound rather cold, but that is not intentional, and it certainly is not meant as a personal attack.

When you receive your SBA 8(a) response letter from the SBA–which is entirely normal, and not an indicator of any particular problem–simply write back in a calm and matter-of-fact way. Many times the SBA just wants to gain a better understanding of your paperwork or something you said in your paperwork.

That being said, sometimes the agency could possibly be a little more diplomatic… For example, this month, one of the major 8(a) application forms changed. Every 8(a) applicant must complete the copy of the new form, as a matter of course. Here are how two different SBA staff members communicated this change to applicants.

SBA Staff Member #1:

“Provide an updated SBA Form 912. This form can be found on SBA’s website. The form must have an unexpired OMB control number.”

This approach:

  • Makes it sound like the applicant submitted old data, which the applicant did not
  • Forces the applicant to hunt for the document, which is somewhere on the SBA’s vast website
  • Implies the applicant purposefully used an expired form, which they did not

In contrast, here is the same directive issued from SBA staff member #2:

“Each of you must provide new SBA Form 912’s, “Statement of Personal History”. Note that the forms initially provided with the application expired February 28, 2013 and have not yet been updated in our on-line application. For your convenience, attached are copies of this form. Also note that questions 7, 8 and 9 have been changed. Please answer accordingly.”

This approach:

  • Explains that a form changed and therefore new forms should be completed
  • Provides a copy of the changed form for the applicant’s convenience
  • Notes areas in the form that have altered wording so the applicant won’t accidentally miss the changes

The first approach implies blame and error on the part of the applicant; whereas the second approach is polite, helpful and considerate. As we all learned in elementary school, sometimes the magic word “please” makes a world of difference. Likewise, communicating to 8(a) applicants in a polite and respectful manner results in better responses from the applicants.

Although the first SBA staff member’s tone was rather brusque and off-putting, it was not intended as a personal insult or attack by any means. The motive was the same as staff member #2’s motive: to simply update some forms.

This example shows that the agency has different ways of communicating its messages and regardless of which tone of voice is used, the end goal is the same: to analyze important information to render a certification decision.

So if the letter you received from the SBA initially upsets you, ignore its tone entirely and focus instead on the facts and the discrete action items you need to complete to move your application forward through the 8(a) review pipeline.

The SBA 70 Percent Rule in Simple Language

GCS Inc. receives questions every week from individuals who are confused about the SBA 8(a) “70 Percent Rule,” which addresses potential economic dependence between an 8(a) applicant firm and its customer(s).

To answer these common questions, GCS Inc. prepared a 6-page PDF document called The SBA 8a 70 Percent Rule; you can download it straight from this post (there is no fee or charge for the download).

If the download does not work for you:

1. Make sure you have the most recent version of the Adobe Reader installed on your computer.

2. Switch your Internet browser and try the download again using a different browser. Many Google Chrome users experience difficulty with downloading PDF files, so try Internet Explorer or Firefox instead.

If you have more questions about the SBA 8(a) 70 Percent Rule, the best way to reach GCS Inc. is via email:

info@get8acertified.com

 

 

How Do I Determine My Adjusted Gross Income (AGI)?

The SBA will look at your personal federal income tax return for the 3 most recent consecutive years and calculate your 3-year average Adjusted Gross Income (AGI) to determine if you are economically disadvantaged for the 8(a) program.

To get into the 8(a) program, your AGI needs to be under $250K.

This means it should not be at $250K–it must be less than $250K.

You can find your AGI on your personal tax return, line 37:

AGI on Your Tax Return

AGI on Your Tax Return

Your Company Size = You + Your Affiliates

When you apply to any federal government program or bid on any federal contract intended for small business participation only, be sure your business really is small under the federal government definition of small before you apply.

Here is what the federal government has to say about how it determines your company size:

When you calculate the size of your business to determine if you are a small business, you must include the annual receipts and the employees of your affiliates.

Affiliation is determined by the ability to control.

“When the ability to control exists, even if it is not exercised, affiliation exists.

“The SBA determines affiliation in accordance with 13 CFR 121.103 in its Small Business Size Regulations.

“Be sure to read the SBA’s affiliation discussion as well.”

Source: http://www.sba.gov/content/affiliation

The federal government typically views affiliation in a negative light, because the ability to control your business means your affiliate might exert negative control over your decision-making as a business owner. Note that the negative control does not have to even exist–only the potential to exert negative control has to exist.

A general rule of thumb is: take precautions to eliminate any affiliations you can before applying for federal small business programs, certifications, contracts or benefits.

In some situations, affiliation cannot be avoided and there is nothing you can do about it.

For example, businesses owned by immediate family members are de facto affiliates of your business by virtue of the fact you are family members.

This is not something you can discuss, negotiate or argue with the federal government–immediate family member owned businesses are automatically affiliates of your company, period.

Now, there are exceptions to every rule, but these exceptions are rare and are not guaranteed.

For example, imagine your immediate family member–a brother–owns a huge $300 million corporation. Under normal circumstances, this would knock you out of eligibility as a small business because (through affiliation), your little $100K company is now “other than small.”

“Other than small” means you can’t declare your company as a small business anymore, at least in government programs, unless–and here is where the rare exception comes in–you can prove a “clear line of fracture” between your business and your brother’s business.

A clear line of fracture would consist of conditions like: you and your brother are estranged and no longer on speaking terms; your brother operates his company in a different state from you; your brother operates a business in one industry and you operate your business in a wholly unrelated and altogether dissimilar other industry, your two companies have never contracted with each other before, your two businesses don’t share anything (e.g., employees, insurance, loans, office space, etc.)

Don’t count on being an exception. Take into the consideration the risk that affiliation poses to your company size when you check to see if you are eligible for federal certifications, contracts, programs or benefits set aside for small business.

Are you concerned about how affiliation, negative control and related factors affect your business size and eligibility for small business certifications? Our specialists can help sort out the situation. Send an inquiry to info@get8acertified.com and one of our specialists will reach out to help you. Include as much detail as you can about the affiliation and/or negative control problem in your email.

It’s Not Your Imagination, It *is* Harder to Get 8a Certified Now than 5 or 10 Years Ago

As an excellent recent article by Set Aside Alert pointed out, the number of participants in the SBA 8(a) program has been steadily shrinking over time, which the SBA’s Darryl Hairston attributed to increased graduations, voluntary withdrawals and terminations from the 8(a) program.

Another reason as to why the 8(a) program portfolio is shrinking is revealed in the SBA’s fiscal year 2013 budget justification document, which states that “lower approval rates for new applications” has resulted in fewer 8(a) certified firms.

Why are fewer companies being approved for the 8(a) program now as compared to 5 or 10 years ago?

One major reason why is because the SBA has been blasted by Congress, the news media and the GAO for allowing fraud, waste and abuse to exist within the 8(a) program.

Facing this harsh criticism and scrutiny, the agency has reacted by aggressively reviewing all incoming 8(a) applications to hunt for any signs of possible fraud, waste or abuse. Any factor in an 8(a) application that is perceived as risk is being probed and examined intensely, with the onus on the applicant to correct any misunderstandings that might occur.

If you are networking and run into 8(a) business owners or former 8(a) business owners who regale you with stories of how they got certified in 10 days and how easy it was to do so, just nod politely and move on, because those individuals are operating on outdated information.

The “new” SBA 8(a) application process of today is rigorous, hard, long and paperwork-intensive. That’s why consulting firms like Government Certification Specialists Inc. exist in the first place. If the 8(a) application process really was as easy as some people claim it is, companies like ours wouldn’t be in business, yet there are more 8(a) consulting firms in existence now than ever before!

This does not mean you cannot successfully get 8(a) certified on your own–you can.

Just enter the SBA 8(a) application process with a patient and realistic outlook: it’s going to take you multiple months to get certified, not mere days, and 8(a) certification is a privilege , not a right. Not all companies meet the very specific set of entry criteria for the 8(a) program; just being a minority owned business is not enough.

The SBA offices that review 8(a) applications are gatekeepers who are going to evaluate you and your company with a critical eye, so expect to be challenged and questioned as a routine part of the 8(a) process.

The upside to this more rigorous 8(a) application process is those firms that do get into this exclusive program will have less 8(a) competition, and thus will likely enjoy greater success within the 8(a) program. As federal spending trends downward further and fewer federal dollars appear on the table, you will fight fewer 8(a) competitors for those precious set aside dollars, and the federal buyers who purchase from you will do so feeling confident they are buying from a stellar 8(a) provider, the cream of the crop.

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