ilivetodayav

The High Deserts Social Network Blog…

Final Regulations Will Strengthen 8(a) Business Development Program for Small Businesses

Friday, February 11, 2011
11-12
Tiffani Clements (202) 401-0035

 

 

WASHINGTON – The U.S. Small Business Administration today published a package of final rules that will revise regulations to strengthen its 8(a) Business Development program to better ensure that the benefits flow to the intended recipients and help prevent waste, fraud and abuse.

The rules were published today in The Federal Register and will become effective in 30 days on March 14, 2011.

The revisions are the first comprehensive overhaul of the 8(a) program in more than 10 years. The regulations incorporate technical changes and substantive changes that mirror existing or new legislation enacted since the last revision in June 1998.

“The 8(a) Business Development Program is an effective tool for providing small businesses with support to help them compete for and win federal government contracts, and in turn put them in the best possible position to drive economic growth and create jobs,” SBA Administrator Karen Mills said. “Through public meetings held in cities throughout the country, SBA gained valuable input from members of the small business community on ways to strengthen the program to provide the best opportunities for eligible firms, while also stepping up efforts to combat waste, fraud and abuse.”

The rules cover a variety of areas of the program, ranging from clarifications on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Protégé program. Some of the components of the 8(a) program that the revised regulations will affect include:

  • Joint Ventures – requiring that the 8(a) firm must perform 40 percent of the work of each 8(a) joint venture contract that is awarded, including those awarded under a Mentor/Protégé agreement, to ensure that these companies are able to build capacity;

  • Economic Disadvantage – providing more clarification on factors that determine economic disadvantage as it relates to total assets, gross income, retirement accounts and a spouse of an 8(a) company owner when determining the owner’s ability to access capital and credit;

  • Mentor-Protégé Program – adding consequences for a mentor who does not provide assistance to their protégé, ranging from stop-work orders to debarment

  • Ownership and Control Requirements – providing flexibility on whether to admit 8(a) program companies owned by individuals with immediate family members who are owners of current and former 8(a) participants;

  • Tribally-Owned Firms – requiring firms owned by tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations to report benefits flowing back to their respective communities;

  • Excessive Withdrawals – amending regulations on what amount is considered excessive as a basis for termination or early graduation from the 8(a) program; and

  • Business Size for Primary Industry – requiring that a firm’s size status remain small for its primary industry code during its participation in the 8(a) program.

The SBA initially published the proposed rule on Oct. 28, 2009 and provided a 60-day comment period for the public to submit their comments. Many businesses requested more time, so the SBA extended the comment period an additional 30 days, allowing the public to submit their comments by Jan. 28, 2010. In addition to requesting written comments from the public, the SBA also embarked on a “Listening Tour” and hosted public meetings between December 2009 and January 2010 in 10 cities around the country: Albuquerque, N.M., Atlanta, Ga., Boston, Mass., Chicago, Ill., Dallas, Texas, Los Angeles, Calif., Miami, Fla., New York, N.Y., Seattle, Wash. and Washington, D.C.

The SBA also conducted tribal consultations to gain further public input to the revisions in Albuquerque, Fairbanks and Anchorage, Alaska, and Seattle. In total, the SBA received more than 2,500 individual comments from the public.

The 8(a) program is a nine-year business development program for small businesses where the owner(s) fits the SBA’s criteria of being socially and economically disadvantaged and the same owners control the firm. The 8(a) program helps these firms develop their business and provides them with access to government contracting opportunities, allowing them to become solid competitors in the federal marketplace. It also provides specialized business training, counseling, marketing assistance and high-level executive development to its participants. In FY09, small businesses received $18.6 billion in 8(a) contract dollars.

 

 

John Clancey Don Rhea

 

 

 

 

Advertisements

March 30, 2011 Posted by | 8(a), business development program, SDB, SDVOSB, Small Business Administration | , , , , | Leave a comment

Government shutdown threatens small businesses

Reliance on contracts, fewer reserves put firms at risk

 

A potential government shutdown has been delayed until mid-March, but that doesn’t mean that government contractors — particularly small businesses — have stopped preparing for the possibility that their biggest customer will close up shop.

While most government contractors will be affected in some way by a government shutdown, it’s thought that small businesses will feel the greatest impact because many rely on the government for all of their annual revenue and have less cash flow and fewer resources.

Several small-business contractors that generate the majority of their revenue from government work are coming up with plans for how to deal with the potential loss of revenue, as well as what to do with scores of employees who can’t do the work they were hired for.

“How do we recover the loss of revenue?” asked Tony Jimenez, president and CEO of MicroTech, a company based in Vienna, Va., that generates 80 percent of its revenue from government contracts. “It’s a constant situation of Democrats and Republicans trying to teach each other a lesson, and government contractors are suffering.”

Small businesses have little to go on in terms of knowing whether and for how long the government will stop working. But they do know that nonessential contracts will stop and the work they do that requires supervision by a government employee will also stop if that government employee has been furloughed.

Ideally, many say they’d like to keep employees on the payroll but can’t do it if the funds aren’t there. So, do the contractor’s employees get furloughed? Are they forced to take their paid vacation time? Are there other projects for them to work on?

One of the biggest fears small businesses face is that good employees, forced to take vacations or get furloughed, might decide to leave.

“If we lose employees, then it’s very hard to bring them back and go through the security clearance process again,” said Jay Challa, chairman and CEO of Ace Info Solutions Inc., based in Reston, Va.

Challa said his firm, which has about 20 government projects active right now, will consider letting employees continue working at government sites that don’t require a government supervisor.

Another option is to allow the employees to take on nongovernment work, such as research projects and proposal writing. Challa said the company will also use the time to make sure employees are caught up on certifications. These measures will allow employees to still be paid and not have to use up any vacation time.

“We will have to use overhead dollars for those tasks,” Challa said. “But we just have to make sure we give the employees enough opportunities to continue.”

If employees aren’t able to work on other company projects, they will be asked to take paid time off, Challa said.

List Innovative Solutions, an IT provider to the federal government based in Herndon, Va., gets all of its revenue from government contracts. So the small firm is seeking legal advice to better understand the human resources laws and how it can deal with its hourly and salaried employees.

The company’s preference is for employees to take their paid vacation time rather than leave without pay. But a furlough is not completely out of the question for List and other small businesses.

“A small business can’t carry a whole lot of it,” said Katie Sleep, president and CEO of List. “We’re trying to keep going and trying not to go into panic mode because it could be in vain. I hope they can work it out to get us through the budget year.”

Aronson LLC, an accounting and consulting firm in Rockville, Md., says the impending government shutdown has been one of its most active blog topics on the firm’s website. Aronson has also been busy consulting with clients on how to handle a government shutdown.

“Treat it as a project,” said Thomas Marcinko, principal consultant with Aronson. “Assign somebody to be in charge or responsible for preparing your firm for a shutdown.”

His other advice includes looking at each contract and evaluating how each one will be affected, as well as telling small businesses to alert their banks about late payments from their clients, document any costs related to the shutdown and communicate with all the people who are affected, including suppliers.

“The shutdown is very complicated and impacts different contracts differently,” Marcinko said. “Handling it well will help a great deal. Not handling it well is close to fatal.”


John Clancey Don Rhea

 

March 21, 2011 Posted by | 8(a), sba, SDB, SDVOSB, Small Business Administration, small business contractor | , , , , , | Leave a comment