WASHINGTON — Today, the U.S. Small Business Administration (SBA) announced new guidance relating to recent reforms of the 8(a) Business Development Program for individually-owned firms. In support of President Donald J. Trump’s agenda to expand the Arsenal of Freedom here at home, and the Smaller War Plants Commission’s effort to strengthen critical supply chains within the defense industrial base, SBA will prioritize processing for 8(a) applicants in defense-critical industries. Additionally, the agency will reinstate merit-based "potential for success" reviews for prospective participants consistent with the statue and purpose of the program.
"Under President Trump's leadership and our partnership with Secretary Hegseth on the Smaller War Plants Commission, the SBA is leveraging the 8(a) Program to reindustrialize America and build out the network of small manufacturers and suppliers that equip our warfighters," said SBA Administrator Kelly Loeffler. “Instead of the Biden-era discriminatory DEI admissions framework and race-based preferences, we are putting merit first – empowering capable small businesses to build the technology and infrastructure that keeps our nation strong. By fast-tracking defense-critical firms and enforcing the rigorous statutory standards of the 8(a) Program, the SBA will strengthen domestic supply chains, expand production capacity, and ensure that the world’s strongest military is backed by the world’s most resilient industrial base.”
Last month, SBA issued a final rule to end racial discrimination in the 8(a) Program and dismantle the race-based admissions framework that effectively barred Americans of certain races from accessing 8(a) set-aside and sole-source contracting opportunities. Under the new rule, individuals are no longer presumed “socially disadvantaged,” and therefore eligible for the 8(a) Program, simply because they are a member of a racial minority group. Likewise, no individual may be barred from the 8(a) Program simply because they are white. Instead, all applicants will be required to prove their social disadvantage status by submitting verifiable, fact-based evidence.
Today’s guidance further refines the program to ensure it delivers measurable results for American taxpayers while advancing key strategic priorities. It supports the Smaller War Plants Commission, a recent partnership between the SBA and the U.S. Department of War to expand American military capacity, capability, and resilience by investing in small manufacturers, who comprise 70% of the defense industrial base. Moving forward, the agency will prioritize reviewing and processing 8(a) applications for small businesses operating in the following defense-critical NAICS codes:
- NAICS 332992: Small Arms Ammunition Manufacturing
- NAICS 332993: Ammunition (except Small Arms) Manufacturing
- NAICS 336414: Guided Missile and Space Vehicle Manufacturing
- NAICS 336413: Other Aircraft Parts and Auxiliary Equipment Manufacturing
- NAICS 334511: Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- NAICS 334419: Other Electronic Component Manufacturing
- NAICS 331110: Iron and Steel Mills and Ferroalloy Manufacturing
- NAICS 332710: Machine Shops
- NAICS 332999: All Other Miscellaneous Fabricated Metal Product Manufacturing
- NAICS 336611: Ship Building and Repairing
In addition to fast-tracking consideration of defense-critical manufacturers, the SBA is officially restoring the "potential for success" review requirement. While required by statute and regulation, the Biden Administration’s waivers led to fewer than half of 8(a) graduates achieving long-term commercial viability after leaving the program. The re-establishment of comprehensive financial and business document evaluations ensures participating firms possess the capabilities needed to successfully deliver on federal contracts, in line with the agency’s broader effort to return merit to the 8(a) Program as the law intended.
On September 10th, when the final rule becomes effective, pending individually-owned 8(a) applications will be temporarily returned via the "Return to Business" system to allow applicants to align with the new standards and submit updated financial records. Applicants will have 45 calendar days to complete their updates and resubmit their applications for review.
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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.