SBA to Publish Interim Final Rule on Extension of 8(a) Participation

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PilieroMazza PLLCBoth the Appropriations Act and the 2021 National Defense Authorization Act permit businesses who were participants in the 8(a) Business Development program on or before September 9, 2020, to extend their participation in the program for a period of one year. Accordingly, the U.S. Small Business Administration (SBA) is expected to publish a final rule incorporating this mandate tomorrow, January 13, 2021. Below are key takeaways for government contractors seeking to extend participation in the 8(a) program.

Eligibility Requirements

Through the unpublished rule, SBA has further clarified that it believes that any firms participating in the 8(a) program as of the date the national disaster was declared due to the COVID-19 pandemic (March 13, 2020) should receive the program extension.

Accordingly, to be eligible for the one-year extension you must:

  • Have been in the 8(a) program as of March 13, 2020, or September 9, 2020.

You are not eligible for the one-year extension if you:

  • Graduated or otherwise left the program prior to March 13, 2020;
  • Were a participant between March 13, 2020, and September 9, 2020, but were terminated, early graduated, or voluntarily withdrew; or
  • Were admitted after September 9, 2020.

How Will the Extension Be Implemented?

  • If you were an 8(a) participant between March 13, 2020, and the date the rule is published, the extension is automatic, unless your company declines the extension.
  • If you were a participant as of March 13, 2020, but have since graduated, you must notify SBA of your intent to be readmitted for a period of one year from date of completion of the program term (e.g., if you graduated on November 25, 2020, your program participation would be extended until November 25, 2021).
    • This notification must be received by SBA no later than 60 days after the rule is published.
    • You must certify that you continue to meet the eligibility requirements.
    • All requests for re-admittance must be submitted to: Associate Administrator, Office of Business Development, Small Business Administration, 409 Third Street SW, Washington, DC 20416 or via email to 8aQuestions@sba.gov.

It is important to keep in mind that participants must continue to comply with all applicable 8(a) eligibility requirements. Additionally, SBA has confirmed that in order to be eligible to receive 8(a) sole-source contracts during the extended program term, the participant must have met the 50% non-8(a) business activity target (or made good faith efforts to meet that target) during its ninth program year.

The final rule, which will have immediate effect, is expected to be published tomorrow, January 13. While the rule will have immediate effect, SBA is providing for a 60-day comment period.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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