Common 8(a) Graduation Mistakes | Federal Compass

Common 8(a) Graduation Mistakes


When it comes to 8(a) graduations, the numbers tell the story. For the majority of companies, the years following graduation rarely lead to continued success. Instead, reality tends to be a sudden, sustained, and dramatic loss of revenues. If that statement seems a bit exaggerated, we encourage you to read our 8(a) graduation ebook where objective data proves that this statement is far more than an alarmist prophecy. Learn more by downloading the free eBook, 8(a) Exit and Transition Guide.

What leads to a decline in revenue following graduation? Several variables play a part in companies failing to find continued success after graduation. However, when you rely on the data and commentary from those who have experienced graduations, to find a common thread, an obvious culprit continues to appear. Procrastination, a lack of planning and awareness, is a habit that too many 8(a) firms adopt leading up to graduation.

Operating under an 8(a) is comfortable, that isn't to say that 8(a) status ensures success, protecting companies from encountering competitors with more matured and tested business development and capture processes insulate them from the realities that lie beyond graduation.

We wanted to understand the phenomenon of stumbling following graduation. Here is what we learned when we spoke to contractors who had the velocity to successfully escape graduation and those who immediately found themselves in a rut.

Common Mistakes

Head in the Sand:

The majority of companies we spoke with did nothing egregious. Instead, they were merely small businesses where everyone wore multiple hats. Ten years flew by, and suddenly they were months away from graduation. It is hard to call this an excuse, anyone running a small business can sympathize with these firms, but the reality is that continued growth requires that you are always looking ahead and planning for the future.

Building Past Performance:

Time and time again, we heard that as companies moved closer to graduation, they decided to parlay their 8(a) status into a way to increase their exposure to new customers. That is undoubtedly a good strategy if there is a long-term plan to leverage that past performance, but when it lacks the proper foresight, then little value can be gained from this strategy.

An 8(a) Pipeline:

A few years out from graduation, the pipeline, and current contracts focus solely on 8(a) set-aside work. This method ignores the obvious. In a matter of years, the company will no longer have an 8(a) certification. At that moment, all of those revenues and dollars in the pipeline are at-risk.

No Succession Plan:

The moment a company is no longer an 8(a), their past performance no longer offers them an advantage for recompetes. A failure to properly develop a relationship with an existing 8(a) leaves them scrambling to find a way to retain some amount of recompete revenues.

A Lack of Practical Experience:

Operating outside of the familiar and protected environment of set-asides can be a challenge. Assuming that employees will suddenly adapt and rise to the challenge of a new environment is a constant and flawed expectation we found within contractors who floundered after graduation. A realization that new competitors, highly competent, with mature processes awaited beyond graduation, was often ignored.

Delaying the Blend:

Few things are more important than revenue that you can rely on, recompetes that you can still pursue, and past performance that will still apply. Too many companies failed to take swings at full and open bids until time had expired. Essentially, preventing their company from building sustainable revenue while giving their employees invaluable experience.

Stay Tuned for Our Next 8(a) Discussion

We encourage anyone reading this blog not to overlook these common mistakes. While it would be easy to dismiss this as another company editorializing on a topic, what we have provided are the real-world experiences of those who came before you.

Life outside of an 8(a) status will be difficult. However, the proper plan can place your company in the best position to succeed. Objective data and anecdotal evidence clearly show that improper planning or attempting to adjust plans six months or even a year before graduation spells disaster.

If we have left an impression, we invite you to read our follow-up to this post, where we discuss the successful strategies employed by contractors who moved beyond graduation and found sustained year-over-year growth. And we offer up advice from those contractors who failed to prepare only to experience eroding revenues that took years to regain.

The Author

Jim Sherwood Federal Compass
Jim Sherwood
Leading the revolution in federal market intelligence.

Recent Posts

Learn What's on the BIC MAC Menu

Learn why everyone is talking about BIC MAC. It's more than just an OASIS 2 recomplete, it's a one-stop shop for solution-centric professional services. BIC MAC is positioned to significantly disrupt the market. We've seen from OASIS trends that contractors can expect widespread adoption across federal agencies. During this webinar we'll explore the broad range of services that can be expected on BIC MAC and the large number of contractors that are sure to participate. We'll also investigate why certain contractors have more post-award success that others, and some of the techniques to finding the right teaming partners.

written by Jim Sherwood, published 06/28/2021

Polaris Recap: We'll Explore What's Changed with Polaris

With other big-ticket vehicles already competed, Polaris offers another onramp for contractors to get in on the action. We'll explore historic Alliant spending and discuss strategies for Polaris.

written by Jim Sherwood, published 05/18/2021

The March Toward GWACS: CIO-SP4, POLARIS, 8(a) STARS III

Is your company prepared for the shifting landscape within Federal IT procurement? For nearly twenty years, GSA Schedules and agency-IDIQs paved the way for the evolution of second-tier competitions. In 2019, GWACs outpaced IDIQs, for the first time, to become the Government's preferred pathway. Every Federal customer interacts with GWACs, and these vehicles continue to lure in new adopters. From the broad range of services to the number of contractors vying for work, the loyalty to IDIQs is waning as customers begin their march towards GWACs. For many, this statement makes sense; however, getting on a GWAC, let alone finding success, creates a challenge unique to these types of vehicles. It isn't enough to know POLARIS, CIO-SP4, and 8(a) STARS III; a clear vision and strategy are critical to determining the right team, surviving the scorecard, and moving into post-award with a proactive plan to capture business, rather than hopelessly reacting.

written by Jim Sherwood, published 03/09/2021

The Small Business Catch-22: Available Resources Limit Critical Processes

Revenue growth is the primary focus of every small business, but in a market as complex and fluid as the federal contracting market, growth can often stall due to the lack of the right resources. And when effectively managing expenditures puts the right resources out of reach, small businesses often get caught in a growth Catch-22.

written by Jim Sherwood, published 01/25/2021