In response to a 2017 Executive Order, the SBA issued a final rule that made revisions to the 8(a) Business Development program and Mentor-Protégé (MP) Program to reduce administrative duplication and costs.  Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” was issued to require agencies to perform internal audits to identify unnecessary or burdensome regulations, then determine corrective actions to revise or remove those regulations.

Economic Threshold Changes for 8(a) participation

The economic threshold for determining an individual’s disadvantage status has gone up. The net worth threshold increased from $250,000 to $750,000; the adjusted gross income averaged over the three preceding years” from $250,000 to $350,000; the fair market value of all assets threshold from $4 million to $6 million; and retirement accounts are now excluded from this calculation.

Previously the 8(a) BD program prohibited participation if a company had an immediate family member who are or have participated in the program. SBA revised this restriction to consider immediate family participation only if one of the following circumstances exist:

  • The concerns are connected by any common ownership or management, regardless of amount or position;
  • The concerns have a contractual relationship not conducted at arm’s length;
  • The concerns share common facilities; or
  • The concerns operate in the same primary NAICS code and the individual seeking to qualify the applicant concern does not have management or technical experience in that primary NAICS code.

These changes will allow more opportunity for businesses to participate and remain in the 8(a) program.

Change in Approval Requirement for Joint Ventures

Now 8(a) Joint Ventures (JV) can win competitive 8(a) contracts without prior approval from the SBA. Addendums do not need to be approved by the SBA when pursuing other contracts within the first two year of the initial contract award.

These changes do not affect the current restriction on 8(a) Sole source contracts. All 8(a) JV must still receive SBA approval before winning 8(a) Sole-Source contracts, which includes amendments to the agreement to pursue additional 8(a) sole-source awards.

This helps 8(a) JV companies expand scope, flexibility, and awards without administrative delays. It also frees up the SBA from agreement and amendment review.

A New All-Encompassing Mentor-Protégé Program

The SBA final rule ended the 8a MP program and rolled all discrete MP programs under one, all-encompassing small business program. The SBA All Small Mentor Protégé program permits small businesses of any certification to operate under the sole program and end duplication and administrative confusion for the government.

There were additional regulatory changes made in the final rule and we are only highlighting a few key changes. To see all revisions, review the fill final ruling on Federal Register.

If you have additional questions on federal contracting programs, contact Coley GCS by email [email protected] or directly at 210-402-6766. In addition, you can visit our Federal Market Acceleration Platform which serves many qualifying 8(a) businesses.

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