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Federal Market Intelligence for Small Business |
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SBA to merge 8(a) & All Small mentoring, add Small Business recertification requirementsProposal offers more than 50 changes to current rulesThe Small Business Administration is planning numerous significant changes to its small business mentor-protege and set-aside programs. In a wide-ranging proposed rule on Nov. 8, the SBA said it wants to merge its “8(a)” and “All Small” mentor-protege programs into a single program. It also wants to require more recertifications on some contracts and to amend many of the rules for 8(a) participation, among other modifications. SBA’s reason for the additional recertifications is that a substantial portion of small business set-asides on multiple-award contracts are going to firms that are no longer small, according to the Federal Register notice (see separate story on proposed rule). Overall, the SBA cited President Trump’s drive to reduce regulatory burdens as the impetus for the proposals. At the same time, the proposed rule makes more than 50 changes to SBA’s joint venture, size standard and mentor-protege rules that small vendors must follow. Digesting all those changes is likely to add to compliance burdens, at least in the short run. Combined mentor-protege programs Combining the 8(a) Business Development Mentor-Protégé Program and the All Small Mentor-Protégé Program would “eliminate confusion and remove unnecessary duplication of functions within SBA,” the agency said in a Federal Register notice of proposed rulemaking. “Because the benefits and purposes of the two programs are identical, SBA believes that having two separate mentor-protégé programs is unnecessary and causes needless confusion in the small business community,” the proposed rule states. Under the plan, the 8(a) mentor-protege program would be folded into the All Small program, and the 8(a) mentoring program would no longer exist as a separate program. It was not immediately clear how that might affect existing mentor-protege agreements and joint ventures in the 8(a) mentoring program. Participants in 8(a) joint ventures would no longer have to submit the joint venture to the SBA for review and approval prior to contract award. Staffs processing applications for the two programs would be combined into a single staff. Recertifications The SBA also wants to require additional recertifications for small business set-aside contracts.
Comments are due by Jan. 17. Background The 8(a) mentor-protege program was established in June, 1998 with the goal of allowing 8(a) firms to team up with mentors in joint ventures to seek federal contracts. Separately Congress authorized the All Small mentoring program in the Small Business Jobs Act of 2010 and the national defense authorization of 2013. The All Small program launched in October of 2016. Currently there are approximately 450 8(a) proteges in joint venture agreements and about 950 All Small mentor-protege agreements. More significant provisions Section 121.103(g) - Clarifies that a finding of affiliation is allowed in circumstances in which former and current principals of a business organize a new business in the same field, with the same principals. Section 121.103(h) - Eliminates the three-contract limit for joint ventures, but maintains the two-year limit. Section 121.402 - Amends how NAICS codes are applied to task orders to ensure that the assigned NAICS codes are accurate. Section 121.702 - Clarifies size requirements for joint ventures in the Small Business Innovation Research (SBIR) program. Section 121.1001 - Allows SBA's Associate General Counsel for Procurement Law to independently initiate or file a size protest, where appropriate. Section 121.1103 - Defines a follow-on requirement or contract for the 8(a) program, for the purpose of determining if the contract must remain within the 8(a) program. Section 124.105 - Provides clarity regarding situations in which an 8(a) participant, current or graduated, has an immediate family member applying to participate in 8(a). Also states that changes of less than 20% of ownership do not require prior SBA approval. Previously, this was allowed for up to 10% ownership. Section 124.109, 124.110, 124.111, 124.112 - Clarifies several provisions relating to tribally-owned, Native Hawaiian-owned and Community Development Corp.-owned 8(a) applicants and participants, regarding change of primary NAICs code, change of ownership and withdrawal limits, and related issues. Section 124.201 - Would require applicants for the 8(a) program to take an SBA-sponsored preparatory course (under consideration). Section 124.203 - Reinstates requirement for 8(a) applicants to submit certain specified supporting documents, including copies of signed federal personal and business tax returns. SBA previously had removed the requirement. Section 124.204 - Would suspend the clock on assessing how long it takes for SBA to process 8(a) applications during periods when SBA is awaiting information from applicants. Section 124.207 - Would allow a business that has been denied entry into 8(a) to submit a new application within 90 days. Currently, the applicant must wait 12 months to reapply. Section 124.300 and 124.301 - Allows 8(a) participants to voluntarily leave the program with only SBA District Director approvals, rather than approvals from the SBA associate administrator. Section 124.304 - Clarifies that an 8(a) participant who is terminated early by the SBA has 45 days to appeal to the Office of Hearings and Appeals. Section 124.503 - States that BPAs are not contracts and should be treated the same as Basic Ordering Agreements. Section 125.9 - Authorizes changes to benefit small businesses in Puerto Rico, including allowing up to five Puerto Rican proteges per mentor. The current limit is three per mentor. More information: Fed Register proposed rule: https://bit.ly/2NY15rc
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