SBA Sets Public Meetings on 8(a) Rule Changes SBA plans two public meetings to hear comments on its proposed overhaul of 8(a) program rules. The all-day sessions will be held at SBA headquarters in Washington on Dec. 10 and 11. SBA has proposed sweeping changes in 8(a) rules, ranging from new restrictions on joint ventures to changes in compensation and income limits for business owners and executives. It is the first comprehensive revision of 8(a) rules in more than a decade. (SAA, 11/6) One provision of the proposed rules would limit the amount of work that could be done by the larger non-8(a) partner in a mentor-protégé joint venture. This rule applies to all 8(a) firms, but SBA indicated it was a response to the explosive growth in sole-source contracts awarded to joint ventures of Alaska Native Corporations and large companies. Under the proposed rule, a joint venture on 8(a) sole-source contracts would be required to perform at least 50% of the work and the 8(a) partner must perform at least 40% of that. In other words, the 8(a) firm would have to perform at least 20% of the total contract. In addition, the larger JV partner would not be allowed to serve as a subcontractor. SBA said the purpose is to ensure that more money from joint ventures flows to the 8(a) partner instead of the large business. The agency acknowledged a “perception of impropriety” when the larger partner did the vast majority of the work and collected most of the revenue. Other proposed changes would ease restrictions on an 8(a) owner’s income and wealth. One proposed rule relaxes the definition of “excessive withdrawals,” which may get a company kicked out of the 8(a) program. Currently if the total income of all company officers exceeds $300,000 a year, it is considered an excessive withdrawal. SBA proposes to ignore officers’ salaries when calculating whether a withdrawal is excessive. The proposed rule would authorize SBA to look at “the totality of the circumstances” to make sure a company was not evading the excessive withdrawal rules. The rule also limits an owner’s annual income to $250,000 a year for continued 8(a) eligibility. But SBA proposed no increase in the $250,000 net-worth limit for new 8(a) business owners or the $750,000 net-worth limit for continued participation in the program. SBA said it considers those ceilings reasonable since the average net worth of a new 8(a) business owner is $70,000. Those wishing to attend the public meetings must pre-register by Dec. 7 with a message to Latrice.Andrews@sba.gov or by fax to 202-481-4042. SBA said it plans additional public meetings on the rule changes. Sen. Lisa Murkowski, R-AK, urged the agency to schedule one in Alaska because of the rules’ potential impact on Alaska Native Corporations.