U.S. Small Business Administration on October 28 announced a notice of proposed rulemaking that would substantially revise contracting rules for firms benefiting from the 8(a) Business Development program. The proposed changes are the result of the first comprehensive review of the 8(a) program in several years. The rules cover a variety of areas of the program, ranging from providing further clarification on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Prot茅g茅 program. The public comment period on the proposed changes is open for 60 days.
Some of the components of the 8(a) program that the proposed changes will affect include:
- Joint Ventures - qualifying that 8(a) firms are required to perform a significant portion of the work to ensure that these companies are able to build capacity;
- Economic Disadvantage - providing more clarification on economic disadvantage as it relates to total assets, gross income, retirement accounts and a spouse of an 8(a) company owner in determining the owner's access to capital and credit;
- Mentor-Prot茅g茅 Program - requiring that assistance provided through the Mentor-Prot茅g茅 relationship is directly tied to the prot茅g茅 firm's business plan;
- Ownership and Control Requirements - providing flexibility in admitting individuals of immediate family members of current and former 8(a) participants;
- Tribally-Owned Firms - seeking public comments on the best way to determine whether a tribe meets the criteria of being economically disadvantaged for the 8(a) program;
- Excessive Withdrawals - amending regulations on what is considered excessive as a basis for termination or early graduation from the 8(a) program; and
- Business Size for Primary Industry - requiring that a firm's size status remain small for its primary industry code during its participation in the 8(a) program.