SBA Proposed Changes to the 8(a) Business Development Program

The Small Business Administration has announced proposals for the improvement of the 8(a) Business Development Program for disadvantaged small businesses. The first comprehensive review of the 8(a) program in several years resulted with the proposed 8 (a) regulation changes that were published in the Federal Register. The public comment period on the proposed changes is open for 60 days.

SBA Administrator Karen Mills said about the proposed changes that they will “strengthen the program and and maximize its benefits for eligible small businesses”. “The 8(a) program has a proven record as an effective program for helping disadvantaged small businesses gain access to training and contracting opportunities to help them grow, create jobs and ultimately succeed in the marketplace once they graduate from the program”, said Mills.

The 8(a) program is designed to help businesses that meet the SBA’s criteria for being socially and economically disadvantaged. In effort to help small businesses grow and motivate people to starting a small business, this program provides them with access to government contracting opportunities, specialized business training and counseling, and help with their small business marketing and high-level executive development. In fiscal 2008, small businesses received over $16 billion in 8(a) contracts.

Some of the proposed changes of the 8(a) program include:

* Economic Disadvantage: Adjustments to how assets, gross income and retirement savings are considered when determining whether the company is economically disadvantaged.
* Ownership and Control Requirements: The proposed changes would provide flexibility in admitting immediate family members of current and former 8(a) participants into the program.
* Joint Ventures: The proposal would require 8(a) firms to perform significant portion of the work on joint ventures, ensuring that they are able to build capacity.
* Business size for Primary Industry: Requiring that the firm stays small for its primary industry while participating in the 8(a) program.

Details of the proposed rule can be viewed in the Federal Register.