According to U.S. Small Business Administration (SBA) regulations, a Native Hawaiian Organization (NHO) is a non-profit organization that is managed by Native Hawaiians and principally serves the Native Hawaiian community (See 13 CFR 124.3). Since the term NHO applies in the context of the SBA 8(a) program, NHOs must also have a majority ownership of a for-profit, small business that has been approved to participate in the 8(a) Business Development program.

NHOs each have a unique mission, but their sole purpose is to serve the Native Hawaiian community. Profits generated by the NHO-Owned 8(a) firms, are dispersed to their parent NHO, which then engages in activities to meet the needs of the Native Hawaiian community. NHO missions range across social and community objectives including: youth programs, access to legal defense, leadership development, innovative youth education, specialized job training, health, financial literacy, business development, cultural engagement, community development, and other community needs.”  (source: NHO Association)

Native Hawaiian Organizations (NHOs) are defined by the Small Business Act (PL 85-536) Section 8(a) (15); (15.U.S.C.637(a)(15); and DFARS 219.805-1 as an organization that meets the following criteria:

• Majority Ownership through Non-Profit Corporation
• Board of Directors Controlled by Native Hawaiians
• Foundation Charter to Principally Benefit Native Hawaiians

NHOs in the U.S. Small Business Administration 8(a) Business Development Program Small businesses owned by NHOs are authorized to participate in the SBA 8(a) program to drive development within the Native Hawaiian Community through profits generated by these businesses.

The 8(a) Business Development Program was named for section 8(a) of the U.S. Small Business Act, which established a Business Development Program to assist small disadvantaged businesses to compete in the marketplace. One of the benefits of the program is participants in good standing can receive sole source contracts, sometimes referred to as direct award contracts.  These sole source awards are a very flexible contract mechanism that provides many benefits to Contracting Officers such as:

• No dollar ceiling on NHO-owned 8(a) set asides for the Department of Defense. 13 CFR 124.506 (b): NHO-owned 8(a) companies are eligible for direct award set-aside contracts regardless of dollar amount, resulting in savings to the Government and the taxpayer through reduced procurement costs and bidding processes. NHO-owned 8(a) organizations are exempt from competitive threshold limitations in accordance with existing law and 13 CFR 124.506 (b).
• Awards cannot be protested: CFR 124.517 (a).
• Alpha contracting process used in direct award negotiations: Per FAR 6.303-1(b), 8(a) sole source awards can be issued up to $25M with no justification required.
• Per DFAR 206.303-2(b), the DOD threshold is $100M to issue awards with no justification required.