[Editor’s Note: Read Part I of our exclusive interview with Darryl Hairston, association administrator for the Office of Business Development at the Small Business Administration, in the June 14, 2013 issue of Set-Aside Alert]

Set-Aside Alert: We have received some complaints that it is more difficult to be approved for the 8(a) program, either due to changes in regulations, more stringent enforcement, less help available from the SBA, less-qualified firms submitting applications, possibly errors in interpretation or all of the above. What is your perspective?

Darryl Hairston: I see every application. We have not been making changes in the rate of approvals or denials. There are no new processes hampering entry of new firms into the program.

We made some changes in the conditions of eligibility in new regulations in 2011. In most cases, the conditions were less restrictive than in the past. One area that was more restrictive was in the rules for successor firms; in some cases successor firms were being created with family members that were basically running the same firm with a new name. The changes we made were intended to make sure the benefits flow to the intended beneficiaries.

We also do a lot more validation of the information presented in applications, mostly financial and public information.

Our approval rate is probably about 50% on first application, and a large percentage of those denied are approved on reconsideration.

One of the biggest problems we have is in the quality of the applications. Some applications are complete, and they are approved very quickly. Many are deficient, and we cannot begin to process the application unless it is complete. The 90-day clock does not start ticking until the application is complete.

Set-Aside Alert: What about the observations by attorney Steven Koprince noting the SBA Office of Hearing and Appeals rejected six 8(a) eligibility decisions made by the SBA over five months. Mr. Koprince suggested in his blog those reversals may indicate a troubling pattern. (Blog website: http://goo.gl/pIrCb)

Darryl Hairston: The OHA has questioned the SBA’s review process in several cases. We are not in a dispute with the OHA. Five cases do not make a trend.

Set-Aside Alert: We have heard some concerns about SBA staffing and the agency’s support for the 8(a) program. There have been comments that support “is not what it used to be” and a perception that less help is available. How would you respond to those concerns?

Darryl Hairston: In terms of reviewing the 8(a) applications, when you look at all the issues involved, I think we do a fairly good job in terms of managing the work flow. It is by no means simple. The typical file is about 8 to 12 inches thick. I cannot really speak for the field offices.

In the eligibility unit, we have had no staffing reductions. For initial applications we have nine people in Philadelphia and nine in San Francisco. This is the first year that the Philadelphia and San Francisco offices will do only initial applications. Previously, those 18 people handled initial applications along with continuing eligibility work, including terminations, supervision, ownership changes and structural changes. This year, we stood up a new unit in Washington with 18 new people to handle the work on continuing eligibility. So that should be a big help.

We also rely on the Small Business Development Centers, Women’s Business Centers and our partners with SCORE chapters and the Management & Technical Assistance Services program. The assistance is there; it is incumbent upon the firms to ask for the assistance.

Set-Aside Alert: Overall, do you think the 8(a) program is performing well and how does the future look?

Darryl Hairston: I’ve been with the SBA since 1978. When I was hired, we had no resource partners. I was in lending, venture capital, ran the DC district office…I have held a number of positions.

I am always optimistic about the 8(a) program. It serves a useful purpose. It is one of the most significant small business programs, and clearly has been successful. My role is to look for continuous improvement.