Oct 10

Major Changes to the 8A Set-Aside Program Rules

In order to minimize the number of fraudulent incidents and to make sure that the federal contracts reach the deserving candidate, the SBA- Small business administration has declared some primary modifications in the 8A programs. The changed regulations and modifications are primarily aimed to make sure that the benefits of the 8A program reach the deserving recipient. By implementing stringent regulations and rules along with unparallel services, SBA 8A aims to display its dedication to limiting the option of fraud, waste and abuse.

The major changes include:

Joint Ventures

According to the major changes made by SBA, a firm credited with 8A certification should conduct not less than 40% of the work of the joint venture contracts, including those granted via a mentor-protege program. With added restrictions and limitations on joint venture contracts, now an applicant is required to complete at least 40% of the work, not less than that, in comparison to the previous requirement when only completion of a small portion of the work was required. In addition to it, during tenure of 2 years, if an 8A firm is awarded a joint venture contract, more than 3 contracts will not be permissible to win. The work cannot be subcontracted to any Joint venture partner who is not 8A certified. The changed rules also state that the mentor firms are more responsible. Mentors who do not offer adequate guidance to their proteges could experience severe consequences such as debarment or stop work orders. The protege firms are required to submit data related to the breakdown of the work within the joint venture, according to the new amendments and record-keeping provisions.

Financial disadvantage

According to the newly changed rules, financial and economic disadvantages will be calculated in a new set of format. It will be determined on the basis of gross income, total assets, retirement account and few other factors.

Mentor Protege Program

The new changed rules state that the mentors are bound to offer adequate assistance to proteges, or else experience severe outcomes. Few other significant changes to the mentor-protege program may include:

• Tying up of the protege assistance with the protege’s SBA-approved business plan

• Enhancing the relationships which are allowed

• Restrict an 8A certified company from being both mentor and protege at the same time

• Permit a protege-mentor joint venture to be considered small for government contracts

• Verify that an agreement built between a mentor and protege should be sanctioned by the SBA 8A before a proposal for joint ventures can be submitted to derive the benefits of the special exception to the volume requirements of that procural

• Permit the SBA with discretionary powers to advice for stop work orders for all those contracts which has mentor-protege joint ventures. It should be done when the mentor fails to offer agreed assistance to the protege.

It is quite likely that the 8A program will be criticized and disliked by the major companies who do not fulfill its criteria for disadvantaged. The scheduled changes will be benefit the small companies to a great extent and the deserving applicant will be able to diversify with the help of federal contracts.

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