Georgia Tech Procurement Assistance Center

5 things you should know: SBA’s recent 8(a) program updates

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SBA has been hard at work this past year updating its 8(a) Business Development Program rules and policies.  And we have been doing our best to keep you posted.  Many of our blog posts focused on SBA’s monumental November 2020 “rule overhaul,” which implemented several 8(a) rule changes.  But given the sheer magnitude of information in that final rule, it is pretty easy to lose track of which updates might affect you, as a potential 8(a) applicant or current 8(a) participant.  There were also some pretty important changes to the 8(a) Program just prior to and subsequent to SBA’s November 2020 final rule.

Suffice it to say, there is a lot to process!  So, we thought a quick summary blog on some of the most significant changes to the 8(a) Program of late might help you in that endeavor.  Without further ado, here are five things you should know about SBA’s recent 8(a) Program updates.

As an initial matter, please keep in mind that this blog does not provide an exhaustive list of the rule changes in SBA’s November 2020 final rule that may affect 8(a) Program admission or participation.  It is merely a simplified discussion of some of the big picture changes that have already received a lot of attention in the government contracting community.

Continue reading at:  SmallGovCon

Five things to know about an 8(a) bona fide place of business

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Eligibility to bid for construction contracts in the 8(a) program can be a maze to navigate for small businesses.  The lifeblood for these companies is identifying and becoming eligible to bid for these prized solicitations.  As a new 8(a) entity, or one looking to branch out, you may be wondering how to establish a bona fide place of business.

In order to qualify for construction contracts in the 8(a) program, offerors are required to have a bona fide place of business (or BFPOB) within the established geographic area.  This post will walk you through when and how to request a determination from the SBA, and when to expect a decision.

Before we get to the five things, one important resource for the 8(a) Program to review when questions arise is the SBA standard operating procedure.  But, if you don’t have time to read all 300 pages and the corresponding regulations, we will walk you through the process.

Continue reading at:  SmallGovCon

How a cyber contractor kept its employees after losing a federal contract

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It was quick action that allowed CNF Technologies Corp. to retain several employees after a defense contract was terminated, its CEO Roxanne Ramirez told the Business Journal.

That group consisted of 14 employees at CNF and around nine employees from the prime contractor.

It was roughly three weeks ago when Jason Garcia, CNF’s executive director of mission engineering and integration, got a call from an unnamed prime contractor letting CNF know that the federal government had shut down a contract that CNF was on for more than 10 years. Both the prime contractor and CNF had less than two weeks before roughly 23 people would be out of a job.

Continue reading at:  San Antonio Business Journal

SBA publishes guidance and FAQ document regarding 8(a) participant 1-year extension

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In accordance with the Appropriations Act, Pub. L. 116-260, Div. N, title III, sec. 330 passed into law on December 27, 2020, firms participating in the SBA’s 8(a) Business Development Program may be eligible for one additional year to their program term.  The SBA has recently published guidance and a FAQ document on the one-year extension for certain 8(a) participants.  You can find the guidance at the SBA’s Certify knowledgebase here:

https://sbaone.atlassian.net/wiki/spaces/CHDB/overview

 

SBA answers questions on 8(a) program extension

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For those who didn’t see it, SBA recently put out guidance on how the 8(a) program term extension will work.  The guidance provides some nice examples of how the process will play out.

The guidance has some straightforward scenarios for how SBA will process the 8(a) term extension.  Remember, there is still time until March 15 to provide comments on SBA’s 8(a) term extension rule.  Here are some of the highlights.

Who is Eligible?

  • Firms that were in the 8(a) Program between March 13, 2020, and September 9, 2020, can get an extension.
  • Firms that terminated, early graduated, or voluntarily withdrew are not eligible.
  • Firms admitted on or after September 10, 2020, are ineligible.
  • Active 8(a) firms participating on January 13, 2021, will receive an automatic one-year program extension unless they decline in writing.

Continue reading at:  SmallGovCon

Contractor settles fraud claims related to 8(a) joint venture

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R&W Builders, Inc. (R&W) of O’Fallon, Illinois, has agreed to pay the United States $400,000 to resolve allegations that it violated the False Claims Act by fraudulently obtaining construction contracts reserved for disadvantaged small businesses, U.S. Attorney Steven D. Weinhoeft announced today.

The Small Business Administration (SBA) 8(a) Business Development Program helps provide a level playing field for small businesses owned by socially and economically disadvantaged individuals by limiting competition for certain federal contracts to Program participants.  To increase the opportunities available to these disadvantaged businesses, the SBA also permits Program participants to partner with another company on certain contracts through approved joint venture agreements.  The SBA requires the joint venture agreements to include specific terms to ensure the relationship is fair and provides a benefit to the disadvantaged business, including provisions designating the disadvantaged business as the managing partner of the joint venture and requiring the disadvantaged business to perform a specified percentage of the work.  It is important that 8(a) joint ventures comply with the SBA’s criteria because misuse of the Program deprives real disadvantaged businesses of valuable economic opportunities and undermines the Program’s integrity.

In 2014, after R&W was no longer eligible to participate in the 8(a) Program, it entered into a joint venture agreement with Global Environmental, Inc. (GEI), an 8(a) Program participant based in St. Louis, Missouri.  R&W and GEI named the joint venture Patriot Commercial Construction, LLC (Patriot) and successfully secured an award set aside solely for Program participants on the Multiple Award Construction Contract (MACC) at Scott Air Force Base, Illinois.

The United States contends that R&W falsely represented it would abide by the Program requirements and the Patriot joint venture agreement to obtain the SBA’s approval.  Immediately after Patriot received an 8(a) award on the MACC, R&W began managing the joint venture and using its own employees to complete nearly all of the work Patriot performed.  Over the next two years, R&W caused Patriot to receive numerous MACC task orders set aside for 8(a) Program participants when Patriot was under R&W’s control, in violation of SBA requirements.

Continue reading at:  U.S. Department of Justice

Congressional Research Service publishes updated report on SBA’s 8(a) program

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The 8(a) Business Development Program—commonly known as the “8(a) Program”—provides participating small businesses with training, technical assistance, and contracting opportunities in the form of set-aside and sole-source awards.  A set-aside award is a contract in which only certain contractors may compete, whereas a sole-source award is a contract awarded, or proposed for award, without competition.  In FY2019, 8(a) firms were awarded $30.4 billion in federal contracts, including $8.6 billion in 8(a) set-aside awards and $9.9 billion in 8(a) sole-source awards.  Other programs provide similar assistance to other types of small businesses (e.g., women-owned, HUBZone, and service-disabled veteran-owned).

8(a) Program eligibility is generally limited to small businesses “unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of and residing in the United States” that demonstrate “potential for success.”

Members of certain racial and ethnic groups are presumed to be socially disadvantaged, although individuals who do not belong to these groups may prove they are also socially disadvantaged.  To be economically disadvantaged, an individual must have a net worth of less than $750,000 at the time of entry into the program and less than $750,000 for continuing eligibility.  In determining whether an applicant has good character, the SBA takes into account any criminal conduct, violations of SBA regulations, or debarment or suspension from federal contracting.  For a firm to demonstrate potential for success, it generally must have been in business in its primary industry classification for two years immediately prior to applying to the program.  However, small businesses owned by Alaska Native Corporations, Community Development Corporations, Indian tribes, and Native Hawaiian Organizations are eligible to participate in the 8(a) Program under somewhat different terms.  Each of these terms is further defined by the Small Business Act, Small Business Administration (SBA) regulations, and judicial and administrative decisions.

This report examines the 8(a) Program’s historical development, key requirements, administrative structures and operations, and the SBA’s oversight of 8(a) firms.  It also discusses two SBA programs designed to support 8(a) firms, the 7(j) Management and Technical Assistance Program and the All Small Mentor-Protégé Program, and provides various program statistics.  It concludes with an analysis of the following current 8(a) Program issues:

  • The SBA’s decision to address recent declines in the number of program participants by revising and streamlining the program’s application process, an action which the SBA’s Office of Inspector General (SBA OIG) reports “may erode core safeguards that prevented questionable firms from entering the 8(a) Program.”
  • Reported variation in 8(a) Program service delivery.
  • Reported deficiencies in the oversight of 8(a) Program participant’s continuing eligibility.
  • Disagreements concerning the financial thresholds used to determine economic disadvantage, including the SBA’s decision to exclude equity in a primary residence from the calculation of an individual’s net worth.
  • The adequacy of the performance measures used to evaluate the program’s effectiveness in meeting its statutory goals.

Read the full report here:  https://crsreports.congress.gov/product/pdf/R/R44844

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