Detailed Information on the
8(a) Business Development Program Assessment

Develop and implement a database-driven management system to include an electronic application, an electronic annual review process and dynamic management reporting system. The first phase of the Business Development Management Information System training (for SBA's field staff) will take place July 15-17, 2008 and July 22-24, 2008. The BDMIS system will be launched July 28, 2008.

Develop strategy for independent evaluation of the program's outcome performance.

Review the unique treatment of Alaska Native Corporations, Native Hawaiian Organizations and Tribally-owned businesses.

Reduce the 8(a) inventory of applications backlog.

Reduce the 8(a) application process cycle time.

Strengthen economic disadvantage criteria.

Measure: Cost per small business assisted.

Explanation:

Measure: Small businesses assisted (number).

Explanation:This is the number of eligible small businesses participating in the program on the last day of the fiscal year. The actual number of participants at the end of fiscal year 2004 exceeds the fiscal year 2005 goal. The goal was adjusted to less than the number from the prior year due to a proposed review that may purge the portfolio of inactive firms and those that are no longer eligible. The program office proposes to change this goal to the number of firms participating in the 8(a) business development program during the program year. This change will make the program goal the same as the legislative data requirement reported in the annual report to Congress.

Measure: Increase the number of 8(a) firms participating in mentor-protege agreements.

Explanation:As a business development tool, the 8(a) program approves mentor-protege teaming agreements between 8(a) developmental firms and other mature firms. Each agreement must specifically indicate how the protege firm will be developed during the relationship. 8(a) graduate and others in the transitional phase of the 8(a) program (years 5 through 9) are encouraged to mentor newer firms. Both firms mutually benefit from the business teaming arrangement. Mature firms that have not been 8(a) participants are also encouraged to give back to the business community by mentoring new 8(a) firms.

Measure: An increased number of firms still in business three years after exiting the Program 8(a) Business Development Program.

Explanation:Each year a survey is completed by SBA district offices of the 8(a) firms that have exited the Business Development Program within the last three years. A record is maintained of former 8(a) participants still in business three years after they have exited the program and compared to the average American small business of which only 29% are still in business nine years after creation.

Measure: Number of 8(a) firms with increased revenue.

Explanation:The business development goal here is to encourage business growth and measure the amount of growth by the number of 8(a) participants with increased annual revenues. Data is provided by each participating 8(a) firm and reveiwed by the SBA district offices. The performance data is stored in the 8(a) annual review records of each firm.

Measure: Number of firms assisted with management and technical training.

Explanation:Management and technical training and assistance are an itegral part of business development. This particular performance measure does not include orientation sessions and informal training provided by SBA district offices, nor does it include counselling provided by SCORE and Small Business Development Centers. This training is specific to the business development needs of 8(a) participants and is offered at two levels: 1) Developmental Training; 2) Transitional Training. The developmental training is aimed at meeting the needs of new 8(a) participants that are learning how to market to the federal government, how to access federal surplus property, how to form mentor-protege relationships and joint ventures, how to leverage HUBZone and Service Disabled Veteran certifications and the basic requirements of doing business with the government, such as marketing, accounting and legal issues. The transitional training focuses on the needs of 8(a) participants that are in program years five through nine and places an increased emphasis on business mix --meaning that 8(a) firms in these years must become less dependent on 8(a) contracts and maintain a healthy mix of other contracts. This training also presents advanced training, accounting, partnering/teaming and business growth strategies. FY 2005 actuals reflect the number of businesses receiving face-to-face training In previous years actuals included face-to-face training and distribution of Procurement Academy CDs.

Measure: Increase the number of 8(a) firms receiving contracts.

Explanation:As another business development tool, the program office proposes to track the number of contracts --8(a), non-8(a), local, state, and private contracts. The increase in the number of contracts will be used as an indicator contributing to business development. In addition to the increase in the number of contracts, the program offices carefully examins the business mix of contracts to ensure that each 8(a) participant is meeting the minimum percent of non-8(a) contracts and to ensure compliance with the Small Business Act which states that Federal contracts are to be used only as a tool for business development.

Is the program purpose clear?

Explanation: The purpose of the 8(a) Business Development program is to assist eligible small disadvantaged business concerns compete in the American economy through business development.

Evidence: 13-CFR-124.

Does the program address a specific and existing problem, interest, or need?

Explanation: The 8(a) Business Development program assist eligible small disadvantaged business concerns compete in the American economy through the use of tools such as federal contracts, federal surplus property, mentor-protege and joint venture arrangements, and management and technical training. At the end of FY 2004, 8,900 companies were enrolled in the program.

Evidence: Small Business Act. 8(a) annual report.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The 8(a) programs purpose is to assist businesses owned by socially and economically disadvantaged individuals to grow and succeed. This is accomplished through contracts, management and technical training, mentor-protege arrangements and joint venture arrrangements, and access to surplus property. Other programs, such as HUBzones and Small Disadvantaged Business (SDB) focus on procurement preferences and do not offer training or other components provided by 8(a). HUBZones target job growth through procurement preferences in economically distressed communities. The SDB procurement program provides contracting opportunities for job growth to firms owned by disadvantaged individuals. The 8(a) and SDB programs share a common application form. 8(a) also overlaps with several SBA technical assistance programs, including Small Business Development Centers (SBDCs), Women's Business Centers, and SCORE. These programs provide training to start-up, existing, and growing small businesses.

Evidence: The Small Business Act, as amended 12/08/04, pages 67-69: Sections 13-15. (SB Act: § 2, B,2,vi)

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The 8(a) Business Development Program has the following flaws that could impact the program's effectiveness or efficiency. 1) The program must effectively be re-positioned as a business development program for culturally and economically disadvantaged entrepreneurs rather than focusing on procurement; 2) The unique treatment of Alaska Native Corporations (ANC), Native Hawaiian Organizations (NHO) and Tribally-owned businesses must be examined; 3) A Management Information System is needed to replace, as termed by the Office of the Inspector General (OIG), the ineffective and inefficient Servicing and Contracts System/Minority Enterprise Development Central Office Repository (SACS/MEDCOR) data system. 4) The OIG has recommended that the exclusion of equity in the individual's primary residence and business in the computation of adjusted personal net worth be carefully examined and that SBA adopt a detailed definition of being economically disadvantaged. 5) SBA needs to define program success relative to the mentor-protege initiative. 6) While the existing program involves approximately 9,000 firms, there is a high concentration of contracts that go to relatively few firms.

Evidence: OIG Report 4-22; 13 C.F.R. 124.506(a) Small Business Act §8(a)(1)(D)(i); Business Opportunity Development Reform Act of 1988 (BORDA) (Public Law 100-656)

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The 8(a) Business Development Program is supposed to target those individuals who own and control little productive capital and are socially and economically disadvantaged. The median personal net worth (excluding business and home equity) for those currently in the program is approximately $150,000. The eligibility criteria for participation in the program includes individuals who can demonstrate social and economic disadvantage. Economic disadvantage is defined as anyone with an adjusted net worth (excluding business and home equity) less than $250,000, without excessive income or excessive personal assets. Social disadvantage is defined as individuals who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identity as members of a group. Anyone who can demonstrate personal social disadvantage will meet this criteria. Flaws in the programs current design and implementation include concentration of contracts in a relative few firms and eligibility exceptions for certain groups even when those businesses are not "small" as defined by statute.

Evidence: SOP 80 05 2. CFR 13 124 - 125. Section 8(a) of the Small Business Act. OIG Report 4-22.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The 8(a) Business Development Program has specific long-term goals focusing on outcomes that reflect the purpose of the program. The program supports the Agency's Strategic Goal 2. The long-term goals of the 8(a) program are two fold: 1) to increase small business success by using business development tools such as federal contracts, mentor-protege agreements, joint venture arrangements, developmental and transitional training and federal surplus property; and 2) to significantly increase successful small business ownership within segments of society that own or control little productive capital.

Evidence: Fiscal Year 2004 Performance and Accountability Report, pages 169 - 205. Small Business Act, as amended 12/08/04, pages 2 and 3; Section 1,(2), a, v and vi. Congressional Submission Fiscal Year 2006, Budget Request & Performance Plan. Fiscal Year 2004 Scorecard.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: SBA is developing baselines from which to measure the programs long-term outcomes specified in the previous question. Nonetheless, four long-term, output-oriented business development performance measures have been set for the 8(a) program: 1) increase the number of contracts (number of private, government, 8(a) and non-8(a) contracts awarded annually) to 8(a) participants; 2) increase business revenue of participating firms; 3) increase jobs at participating firms; and 4) improve the business mix of contracts (number of 8(a) contracts vs. non 8(a) contracts).

Evidence: Fiscal Year 2004 Performance and Accountability Report, pages 169 - 205. Annual 408 Report to Congress. SBA Scorecard.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Two program annual performance goals have been tracked since fiscal year 2001. These are: 1) The number of small businesses participating in the program at year end: 6,942 in 2001; 7,000 in 2002; 7,543 in 2003; and 8,900 in 2004. The proposed goal for fiscal years 2005 through 2007 is being revised upward to reflect a 5% increase in the number of small business participants above the baseline of each preceding year. 2) The number of small businesses still in business three years after leaving the program was 76% in fiscal year 2004. This goal for fiscal years 2005 through 2007 are being revised to an increase of two percentage points above the preceding year. Three additional 8(a) annual performance goals have been established beginning in fiscal year 2005: 1) Number of applications processed - 4,500 in 2005; 5,000 in 2006; 5,500 in 2007; 2) Days to process 8(a) applications - 45 days in 2005, 30 days in 2006, 25 days in 2007; 3) Net new number of small businesses certified - 550 in 2005, 600 in 2006, 650 in 2007.

Evidence: Fiscal Year 2004 Performance and Accountability Report, pages 169 - 205. The Fiscal Years 2004 and 2005 SBA Scorecard. The proposed new goals above fiscal year 2004 baselines will be incorporated in the Agency scorecard beginning in fiscal year 2006.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The 8(a) Business Development Program has established baselines and targets for its annual measures. Two program annual performance goals have been tracked since fiscal year 2001. Goals are established based upon the prior year (baseline) results plus a reasonable increase. The results and baselines are: 1) The number of small businesses participating in the program at year end: 6,942 in 2001; 7,000 in 2002; 7,543 in 2003; 7,553 in 2004 --number of participants during 2004 was 8,900. The proposed goal for fiscal years 2005 through 2007 is being revised upward to reflect a 5% increase in the number of small business participants above the baseline of each preceding year. 2) The number of small businesses still in business three (3) years after leaving the program was 76% in fiscal year 2004. This goal for fiscal years 2005 through 2007 are being revised to an increase of two (2) percentage points above the preceding year. Four additional 8(a) baselines are being established in fiscal year 2005: 1) Number of applications processed - 4,500 in 2005; 5,000 in 2006; 5,500 in 2007; 2) Days to process 8(a) applications - 45 days in 2005, 30 days in 2006, 25 days in 2007; 3) Net number of small businesses certified - 550 in 2005, 600 in 2006, 650 in 2007. Baselines include 1) the number of small business firms participating in the program; 2) the number of small firms owned by groups that own and control little productive capital; 3) the number of firms that receive management and technical training; 4) the number of 8(a) participants partnering in mentor-prot??g?? business relationships to further develop their firms; 5) 8(a) business success rate, as measured by those firms still in business three years after leaving the program. 4) The number persons employed by 8(a) Business Development participants: 190,000 in fiscal year 2004; 200,000 in fiscal year 2005; 210,000 in fiscal year 2006; 225,000 in fiscal year 2007.

Evidence: Fiscal Years 2005-6 SBA Budgets. Fiscal Year 2004 Performance and Accountability Report, pages 169 - 205. 408 Report to Congress. Fiscal Years 2005 and 2006 SBA Scorecard. The proposed new goals above fiscal year 2004 baselines will be incorporated in the Agency scorecard beginning in fiscal year 2006.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: SBA field offices partner with the program to provide management and technical assistance. More than 20 Federal agencies have signed Partnership Agreements in support of the 8(a) Business Development Program to improve the program and clarify the roles and responsibilities of both the SBA and partnering agencies. Other federal agencies monitor contract awards to program participants. Grantees and contractors collaborate in providing training and processing of 8(a) applications. State and volunteer programs collaborate to provide counselling. Thirty-five (35) State Associations of Surplus Property have executed a memorandum of understanding to work with the SBA to facilitate the use of federal surplus property for 8(a) Business Development participants.

Evidence: The federal government's contracting database, Federal Procurement Data System Next Generation (FPDS-NG) provides data on the work of other federal agencies toward the program goals. SBA's Servicing and Contracts System/Minority Enterprise Development Central Office Repository (SACS/MEDCOR) database is used to track the work of SBA field offices toward the annual and long-term goals of the program. Contractors and grantees that perform management and technical assistance, as well as SBA district offices, are monitored and measured through the SBA Scorecard. Federal agencies have signed Partnership Agreements with the SBA to facilitate the award of contracts set aside for the program. Thirty-five (35) State Associations of Surplus Property have executed a memorandum of understanding with the SBA 8(a) program to facilitate the use of federal surplus property for program participants.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Three major independent evaluations have been conducted on management of the 8(a) Business Development Program. They are Office of the Inspector General (OIG) Reports Number 4-15 and 4-22. The Government Accountability Office (GAO) has also completed evaluation of this program as reported in GAO/T-RCED-96-259. The OIG Audit Report 4-15, "SACS/MEDCOR Ineffective and Inefficient," was completed March 9, 2004 and Report 4-22, was completed June 2, 2004. The GAO Report 96-259 was complete September 18, 1996. While no independent evaluations have been conducted to assess 8(a) Business Development effectiveness, impact or relevance, the Agency is taking a number of steps to evaluate the program and identify opportunities for improvement. Acting on the recommendation of OIG Audit Report 4-15, SBA has completed Phase I of the replacement for the SACS/MEDCOR system by implementing an Internet-based application for the program. Phase II, the development of an add-on to this program, the 8(a) electronic annual review is underway and will be launched in fiscal year 2006. The final Phase III, the management and reporting portion of this system will be developed in fiscal year 2006 and implemented during fiscal year 2007.

Evidence: OIG Audit Number 4-15, "SACS/MEDCOR Ineffective and Inefficient;" OIG Audit Number 4-22, "Business Development Provided by the 8(a) Business Development Program;" GAO/T-RCED-96-259.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The SBA cost allocation survey coupled with the projected budget needs of the program are used to improve management and make the program processes more complete, transparent and efficient. Budget activities in fiscal years 2004, 2005 and 2006 include: Implement an automated Internet-based 8(a)/SDB application process; Design and build an 8(a) Internet-based annual review process; Design a replacement for the ineffective and inefficient Servicing and Contracts System/Minority Enterprise Development Central Office Repository (SACS/MEDCOR) data system; Implement an 8(a) Internet-based annual review process.

Evidence: SBA 2003 and 2004 Performance and Accountability Reports. SBA FY 2006 Congressional Submission. Statements of Work.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The 8(a) Business Development Program is included in the agency's five-year strategic plan and supports goal 2. In addition, the program office has developed new and refined indicators that will measure progress toward meeting annual and long-term goals. As a result of the OIG recommendation that the Office of Business Development collect sufficient data to manage, monitor and improve the 8(a) Program, SBA is implementing new data collection systems to support sttrategic planning efforts. Phase I, the development of an Internet-based application, is complete. Phase II, an e-annual review process is being developed in fiscal year 2005 as an add-on to the electronic application and will be implemented in fiscal year 2006. Phase III, the management and reporting portion of the replacment for the SACS/MEDCOR system, is scheduled to be developed during fiscal year 2006 and implemented and integrated into the system in fiscal year 2007. Lastly,the OIG recommended that the program office define "success" and "graduation". Comprehensive draft definitions were developed in September 2004 and have cleared the SBA Office of General Counsel and the Office of the Inspector General.

Evidence: SBA's 5-year strategic plan.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: While there have been historical problems with several of the systems used by the program office to collect data, SBA is working to address past challenges through the implementation of a system to replace the Servicing and Contracting System/Minority Enterprise Development Central Office Repository (SACS/MEDCOR). In the interim, the office uses other mechanism to track performance information to manage and improve program performance. These alternative systems can cause delays in the timeliness and accuracy of data. Items tracked include: 1) Number of mentor-prot??g?? agreements approved. When the 8(a) e-annual review will be implemented in fiscal year 2006, the program will collect in real time the results of these relationships and measure the growth and development of the participating firms as a result of the the agreements. 2) Number of applications approved, declined, returned, number of applications in inventory and number of applications processed. The new 8(a) electronic application measures and tracks in real time the number of days it takes to screen and process an application. Applications for 8(a) certification that are made by paper will be entered in to this system beginning in fiscal year 2006. 3) Number of IG recommendations remedied. This is collected by the Agency and reported to the program office. Action taken and actions pending with due dates are passed to the program office monthly. 4) Number of interagency partnership agreements completed. The relationship with other Federal agencies is critical to the success of the 8(a) Business Development Program. Partnership Agreements executed between the SBA Office of Business Development and other agencies is reported weekly. 5) The SBA also tracks 8(a) contract activity through the FPDS-NG and uses this data to forecast needs and market opportunities for program participants.

Evidence: The SBA issues a Report to the President on government-wide procurement goal attainment. Reports on certification and e-annual reviews of each 8(a) program participant are reported in the Agency Report to Congress. Data in the new 8(a) electronic application is available dynamically. Portfolio data is collected and analyzed each fiscal year to compare program activity with baselines and goals. SBA Scorecard goal and project information is reviewed monthly to measure progress. Grantee, contractor and field office reports are provided to the program office quaterly. Program Weekly Reports are given to the SBA Administrator.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: 8(a) personnel have personal business commitment plans (PBCP) that measure their performance and sets minimum goals for each level of performance. Furthermore, management and employee performance goals are linked to scorecard and long-term agency goals. Grantees and contractors are held accountable through Statements of Work with specific goals, such as number of firms to be trained and number of locations where training will be presented. SBA district offices are goaled specifically on the number of firms trained and the number of annual reviews completed. Other federal agencies are held accountable for data reporting through the Federal Procurement Data System (FPDS). Steps are being taken to further enhance partner accountability through improved partnership agreements with Federal agencies and expanded agreements with state surplus property organizations.

Evidence: FPDS-NG; SBA Scorecard; PBCP; Program Reports; Annual 408 Report to Congress; Written responses to IG and GAO recommendations.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Obligation of funding is based on advanced planning, arising out of budget formulation and operational planning processes. Funding is obligated and expended in a timely fashion, and used for execution of 8(a) Business Development Program statutory mandates. Program managers work with staff of the Office of the Chief Financial Officer to ensure that actual expenditures against obligations are reported, compared with operating plans to determine compliance with intended use, and adjustments made, as necessary.

Evidence: U.S. Small Business Administration Congressional Submission Fiscal Year 2006; Budget Request & Performance Plan; Annual Operating Budget for the 8(a) Business Development Program.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The 8(a) Business Development Plan currently has in place competitive sourcing/cost comparisons and is actively engaged in competitive sourcing for the certification and eligibility review process. In fiscal year 2004, the program put into action a new IT improvements plan that had been recommended by both the Office of the Inspector General (IG) and the Government Accounting Office (GAO). The program office established a task force composed of 8(a) partners to analyze and make recommendations on the specifics of new IT improvements --in particular, a replacement for the SACS/MEDCOR system with a comprehensive management tool for the program. Two critical steps are in progress in the 8(a) Business Development Program: 1) A Request for Proposal was issued 2005 for competitive sourcing of the 8(a) certification and eligibility processes. In response, the 8(a) program has established a Most Efficient Organization (MEO) team and selected a representative to present the offer. 2) The 8(a) Business Development Program has adopted a four year IT improvement plan. Phase I was launched in September of 2004 and is the on-line, Internet-based 8(a) application process. This process effectively reduces paper between SBA offices and customers to near zero. Phase II, an electronic annual review system, is in development and will be implemented during fiscal year 2006. Phase III, the replacement management system for SACS/MEDCOR will be developed during fiscal year 2006 and implemented during fiscal year 2007.

Evidence: Servicing and Contracts System/Minority Enterprise Development Central Office Repository (SACS/MEDCOR). Central Tracking System for 8(a). Fiscal Year 2004 Performance and Accoutability Report. Internal Team Report: Agencies Resonse to the IG Report No. 4-15.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The 8(a) program has developed a "Tools for Success" toolbox that incorporates the strengths of related programs such as the Small Disadvantaged Business Program (SDB) and the HUBZone Program. The 8(a) program emphasizes cross certification with small business contracting programs that do not have a business development component (e.g. HUBZone, Service Disabled Veterans, Women and Small Disadvantaged Businesses). To further enhance the coordination between the 8(a) program and the SDB program, a change was made to the Internet-based application system to allow an on-line transfer of ineligible 8(a) applications to the SDB application process for further analysis. The 8(a) program has extended a memorandum of understanding (MOU) with the Department of Transportation (DOT) for reciprocity of certification. SCORE and Small Business Development Centers are used by 8(a) participants to build business plans and receive management counseling.

Evidence: SOP 80 05 2. SBA / DOT Mmemorandum of Understanding.

Does the program use strong financial management practices?

Explanation: The program works with the Office of the Chief Financial Officer to ensure application of sound financial practices. It engages in budget formulation and operational planning processes that link resource requests to the Agency's strategic goals and long-term objectives, and specific measurable outputs and outcomes. All obligations are made in accordance with statutory authority, and expenditure of funds against obligations is monitored. There are no audit material weaknesses associated with the 8(a) Business Development Program. Performance planning and budget formulation are fully integrated. Obligations and expenditures are thoroughly reviewed at least monthly. This review encompasses the appropriateness of payments against obligations to preclude improper payments.

Evidence: U.S. Small Business Administration Congressional Submission Fiscal Year 2006; Budget Request & Performance Plan; Annual Operating Budget for the 8(a) Business Development Program; Agency Scorecard.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The 8(a) Business Development Program has taken meaningful steps to address its management deficiencies. The agency has addressed some of the management challenges identified by the Office of the Inspector General and the General Accountability Office. For example, SBA is developing an electronic database management tool, is currently reviewing the unique treatment of Alaska Native Corporations (ANC), Native Hawaiian Organizations (NHO) and Tribally-owned businesses, and has drafted comprehensive definitions of "success" and "graduation" for the program. More work is needed on standardizing business development activities at the district offices and diversifying contract concentration.

Evidence: Draft amendment to SOP 80 05 2. Draft regulations to address the unique treatment of some groups. IG Reports: 8(a) Continuing Eligibility Reviews 43H006021; SACS/MEDCOR 4-15; Business Development Provided to 8(a) Firms 4-22. GAO Reports: Focus 8(a) Program to Help Firms Obtain Contracts 00-196; SBA's 8(a) Information System 00-197.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The 8(a) Business Development Program has two long-term performance goals focusing on outcomes that reflect the purpose of the program. The program supports the Agency's Strategic Goal 2. The long-term goals of the 8(a) program are: 1) to increase small business success; and 2) to significantly increase successful small business ownership within segments of society that own or control little productive capital. For instance, OIG Report 1-11 found that (for 1999) 345 of 510 firms completed the 8(a) Business Development Program; only one graduated early and met the competitive mix of contracts. A 2004 internal survey of the 8(a) portfolio indicates progress has been made in achieving the program long-term goals. 1) Portfolio-wide, the average 8(a) business mix ratio exceeds regulatory guidelines in all nine years of the program. In fiscal year 2004, the 8(a) portfolio business mix ratio was 28% 8(a) contracts vs. 72% non-8(a) contracts. 2) During the last three years, an average of over 400 firms have completed the 8(a) Business Development Program each year. 3) More than 75% of firms participating in the 8(a) program are still in business three years after exiting the nine-year program vs. only about 29% of non-participating firms. This percent has been above 60% for the past five (5) years. 4) In fiscal year 2004, 8(a) program participants employed approxmately 200,000 Americans and more than 175,000 in fiscal year 2003. It is anticipated that this number will increase by about 5% in fiscal year 2005.

Evidence: OIG Report 1-11. Agency Reports to Congress, Fiscal Years 2002, 2003, 2004. SBA Scorecard. Weekly Reports to Administrator.

Does the program (including program partners) achieve its annual performance goals?

Explanation: In fiscal year 2004, the 8(a) Business Development Program met its targets for small business success and certification of eligible individuals. 1) The number of small businesses participating in the program at year end has steadily increased each year since 2001 and continues to grow at a reasonable rate. 2) The number of businesses still in business three years after leaving the program has grown slightly each year over a baseline that is three times the rate of firms that do not participate in the 8(a) Business Development Program. 3) The number of applications processed each year has also steadily grown and the program has met its 5-10% increased goal every year during the past three years. 4) The goal to reduce the number of days it takes to process an 8(a) application was exceeded by more than 50% in fiscal year 2004 and continues to be maintained or improved during fiscal year 2005.

Evidence: Fiscal Year 2004 Performance and Accountability Report. Agency Report to Congress. Weekly Reports to the Administator. Agency Annual Budget Request.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The 8(a) Business Development Program has demonstrated improved efficiencies and cost effectiveness in achieving its program goals. Many of these improvements were initiated during fiscal year 2004 and have continued through fiscal year 2005. It is anticipated that these efficiencies will become institutionalized during fiscal year 2006 and will become the baseline for further efficiencies to the 8(a) Business Development Program in the future. The program has operated within budget and accomplished many goals. Specifically, the program office: 1) Reduced the cost of management and technical training. 2) Improved the delivery of management and technical training by making it more accessible to 8(a) participants and more cost effective through the use of DVDs and the Internet. 3) Re-engineered workflow processes. 4) Reduced certification and eligibility staff by about 30 percent. 5) Increased the capacity of application processing while decreasing staff. 6) Reduced the screening and processing time from over 120 days to about 45 days.

Evidence: Agency Report to Congress. Weekly Report to the SBA Administrator. Agency Scorecard.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: SBA's Office of Inspector General (OIG) and the Government Accountability Office have historically questioned the operations and impact of the program. In it's report number 04-22, the OIG found that the program lacked indicators to assess the effectiveness of the program and a large number of contact awards were gained by a relatively few number of firms. Further, the OIG found that the agency had not developed program-wide policy and guidance detailing how the agency would deliver the business development services required by the Small Business Act. At the same time, 8(a) administrative costs far exceed the costs of other SBA training and procurement programs.

Evidence: Small Business Act. OIG report 4-22. 2004 Performance and Acountability report.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: While no independent evaluation have been undertaken to measure the effectiveness of the program, the SBA continues to take positive action to systematically develop data for future evaluation of the 8(a) Business Development Program and to identify opportunities for improvement. In fiscal year 2004, the Agency launched an Internet-based application system which collects in real time participant data and information that will be used to establish a baseline to evaluate business growth and development. This is the first phase of a larger effort by the Agency to capture in real time the data of 8(a) firms. For more than five (5) years, the program office has captured the number of contracts awarded to each 8(a) firm and separates this data by program contracts vs. non-program contracts to measure the effectiveness of the program in achieving results and maintaining a balanced business mix. The program also keeps track of the number of employees hired by each 8(a) firm and follows the trend to help determine the progress of business development or an indicator that the firm may need training or other assistance. A useful indicators signifying the achievements of the 8(a) Business Development Program is the success rate of participants three years after they have exited the program. More than 76% of them are still in business three years after leaving the 8(a) program vs. less than 30% for non-participating firms.

Evidence: Agency Report to Congress. U.S. Small Business Administration Congressional Submission Fiscal Year 2006. Audited Financial Statments of 8(a) Firms. FPDS-NG. SACS/MEDCOR.