Evaluating Recent Changes to SBA’s 8(a) Economic Disadvantage Thresholds

The U.S. Small Business Administration’s (SBA) 8(a) Business Development Program (8(a) Program) is a federal government program that helps small businesses owned and controlled by socially and economically disadvantaged individuals (or disadvantaged entities) compete in the American economy through business development assistance. Following a prior economic disadvantage study, the SBA adjusted economic disadvantage eligibility thresholds for the 8(a) Program to better align with the Economically Disadvantaged Women-Owned Small Business Concerns (EDWOSB) program. Responding to a Government Accountability Office (GAO) report recommending evaluation of these changes, this study analyzed the effects on firms applying for 8(a) certification between July 15, 2020, and September 30, 2022. Overall, the study found that the changes to the 8(a) economic disadvantage thresholds in 2020 had no significant impact on program participation, competition for contracts, application processing times, time in the program, or the time it took for firms to obtain their first 8(a) contracts. Additionally, the study found that for all key outcomes evaluated, there was no statistically significant difference between previously eligible (lower net worth, <$250k) and newly eligible (higher net worth, $250k to $750k) firms. This suggests that the changes to the thresholds did not create an unfair advantage for firms with higher adjusted net worth.