Saturday, June 15, 2024

SmallGovCon: SBA Final Rule Relaxes Change of 8(a) Program Ownership, Allows Limited Populated Joint Ventures

Under the new rule, SBA has included “a process for allowing a change of ownership for a former Participant that is still performing one or more 8(a) contracts.” The old rule used to say that “any Participant that was awarded one or more 8(a) contracts may substitute one disadvantaged individual for another disadvantaged individual without requiring the termination of those contracts or a request for waiver under § 124.515.”

The updated rule specifies that a change of ownership could apply to a former Participant as well as to a current Participant under 13 C.F.R. § 124.105(i). This is most likely to benefit “an entity (tribe, ANC), Native Hawaiian Organization (NHO), or Community Development Corporation (CDC)) [that] seeks to replace the principal of a former 8(a) Participant.” The one-time eligibility rule would mean that if a disadvantaged individual or a disadvantaged principal of a former 8(a) Participant, the buyer would use up its one-time eligibility for the 8(a) Program…

There are a number of other changes to clean up the 8(a) regulations.

  • For potential for success, the rule clarifies that a company “can demonstrate potential for success with prior commercial and government contracts, including state and local government contract work.” No private sector contracts are needed.
  • Where a company had federal debts, “if the Government has settled a debt (i.e., accepting less than the full amount owed to discharge the debt), the firm/individual would not be barred from participating in the 8(a) BD program on that basis alone.”
  • Because some tribes don’t file tax returns, the rule says that a tribally-owned applicant can submit financial statements…

Read the full article here.


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