SBA: No Increase Needed in Net-Worth Limits SBA opposes increasing net-worth limits for owners of 8(a) companies. Senate Small Business Committee Chairman John Kerry said the limits have not been changed in more than 10 years. To enter the 8(a) program, a business owner’s net worth must be no more than $250,000. If his net worth rises above $750,000 his company may be kicked out of the program. Calvin Jenkins, SBA deputy associate administrator for government contracting and business development, told Kerry those levels “are appropriate.” Jenkins said the average net worth of an owner entering the 8(a) program is $60,000-$70,000. Personal net-worth calculations do not include equity in a home or the value of the business. Attorneys Nan Kargahi and Jon Williams, writing in the May 18 issue of Set-Aside Alert, said SBA appears to be stepping up enforcement of the net-worth restrictions after several years of inaction. At a May 22 hearing before Kerry’s committee, New Mexico business owner Bill Miera said the net-worth limits were set in 1988, when gasoline cost 91 cents a gallon and a typical pickup truck cost $13,000, compared to $30,000 today. Representing the U.S. Hispanic Chamber of Commerce Miera urged that the $250,000 limit be raised to $750,000 and the $750,000 limit for 8(a) participants be eliminated. If Jenkins’ figures are accurate, “the new 8(a) business owners that he's speaking of, [are] surely doomed to failure after failure,” said Hank Wilfong, president of the National Association of Small Disadvantaged Businesses. “What hope can we have if the ‘average’ folk we're accepting into the program are that teeny weeny?” he asked in an e-mail message. “Then, how long do we think it will take to enable these "economic midgets" to go forth and do the kinds of jobs that DoD, NASA, DHS need doing?” House Democrats proposed legislation last year that would require SBA to set different net-worth limits for each industry, based on the capital requirements of the industry. A spokeswoman for the House Small Business Committee said the panel expects to take up contracting legislation this summer. Kerry criticized SBA’s slow response to an inspector general’s report that found lax oversight of the 8(a) program. The report said the program was vulnerable to fraud because neither SBA nor procuring agencies monitored contractors to ensure, for example, that they were not operating as fronts. (SAA,4/7/06) The IG report was issued in March, 2006, but Jenkins said SBA is still preparing regulations to tighten oversight. He said he expects they will be published in the fall. Kerry said SBA had shown “no energy” in dealing with the problems cited by the IG. He commented, “It seems like it’s almost asleep.” The 2006 IG report said SBA has delegated responsibility for 8(a) contracts to 26 agencies, including all of the largest ones, but no one was monitoring contractors for compliance with 8(a) regulations. It said SBA had conducted no surveillance reviews to determine whether procuring agencies were monitoring compliance.