SBA’s 8(a) Business Development Program revisions are revealed

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SBA’s 8(a) BD program is a nine-year business development program, which provides specialized business training, counseling, marketing and technical assistance to small businesses certified for participation in the program.
The revisions to the 8(a) BD regulations are the first comprehensive overhaul of the program in more than ten years.  The changes are:
•Both technical and substantive in nature;
• Made to ensure that the program benefits flow to the intended recipients; and
•To help reduce potential fraud, waste and abuse.
The changed regulations allow owners of 8(a) firms called to active military status to elect to be suspended in order not to lose any of their 9-year term in the program.
For the first time, this rule adds objective criteria to determine economic disadvantage based on personal income ($250,000 for initial eligibility, $350,000 for continued eligibility) and total assets ($4 million for initial eligibility, $6 million continued eligibility).
The new rule allows an immediate family member of a current or former 8(a) firm to own an 8(a) firm where there are no or negligible connections between the two firms and the family member can demonstrate sufficient management and technical experience to independently operate the firm.
SBA has tightened requirements for joint ventures to ensure that non-disadvantaged firms do not unduly benefit from the 8(a) program.
•The 8(a) participant in a Mentor-Protege agreement must perform 40 percent of the work of each 8(a) joint venture contract that it is awarded.
• A joint venture awarded an 8(a) contract cannot subcontract work to any non-8(a) joint venture partner, including a large business mentor
• Each 8(a) firm that performs an 8(a) contract through a joint venture must report to SBA how the performance of work requirements (i.e., that the joint venture performed at least 50% of the work of the contract and that the 8(a) participant to the joint venture performed at least 40% of the work done by the joint venture) were met on the contract.
The rule requires firms owned by tribes, Alaskan Native Corporations (ANC), Native Hawaiian Organizations (NHO) and Community Development Corporations (CDC) to report benefits flowing back to their respective communities.
Firms owned by a tribe, ANC, NHO or CDC may not receive a sole source 8(a) contract that is a follow-on contract to an 8(a) contract that was performed immediately previously by another participant (or former participant) owned by the same tribe/ANC/NHO/CDC.
SBA is now authorized to early graduate a firm that exceeds the size standard for its primary NAICS code for three successive program years.