What: The U.S. Small Business Administration (SBA or Agency) proposes to amend its regulations governing Multiple Programs and Policies, including –
- Historically Underutilized Business Zone (HUBZone) Program to clarify certain policies, hoping to clarify and improve policies last revised in 2019. The rule proposes to require any certified HUBZone small business to be eligible as of the date of offer for any HUBZone contract. It also proposes to amend the definition of the term “employee” by raising the minimum number of work hours necessary for an individual to count as an employee for HUBZone program purposes.
- Several changes to SBA’s size and 8(a) Business Development (BD) regulations, the Women-Owned Small Business (WOSB) and Veteran Small Business Certification (VetCert) programs, notably:
- SBA proposes to amend its rules on affiliation regarding negative control. Specifically, this proposed rule would make the negative-control rules consistent across SBA’s various programs, expressly addressing six (6) circumstances in which SBA will not find that a lack of control exists where a qualifying individual or business does not have the unilateral power and authority to make decisions regarding: (1) adding a new equity stakeholder; (2) dissolution of the company; (3) sale of the company or all assets of the company; (4) the merger of the company; (5) the company declaring bankruptcy; and (g) amendment of the company’s governance documents to remove the shareholder’s authority to block any of (1) through (5).
- SBA proposes to amend its “ostensible subcontractor” rule to clarify that SBA intended to aggregate revenues of prime/subcontractor relationships between proteges and mentors unless all the joint venture requirements were met. That would mean that the protégé and mentor have an underlying joint venture agreement that meets the requirements of § 125.8(b), the protégé will direct and have ultimate responsibility for the contract, and the performance of work requirements set forth in § 125.8(c) will be met. In all other cases in which the mentor as subcontractor performs primary and vital requirements of a contract, order, or agreement, or where the prime contractor is unusually reliant on such a subcontractor. , those regulatory requirements are not present and SBA would aggregate the revenues/employees of such “joint ventures” in determining size.
- Delete the program specific recertification requirements contained separately in SBA’s size, 8(a) BD, HUBZone, WOSB, and VetCert and move them to a new section that would cover all size and status recertification requirements.
- SBA proposes to simplify and reorganize 13 CFR § 121.404, which addresses the date used to determine size for size certifications and determinations. The proposed changes “seek to clarify the current rules and make them easier to understand and apply”. They address qualification as “small” for purposes of multiple award contracts (MACs) awarded one an unrestricted basis vs. MACs set aside or reserved for small business; and the scope of a size recertification request requested by a contracting officer vs. one triggered by a merger, sale, or acquisition; or made under a long-term contract in the fifth year of performance.
The proposed revision will amend parts of 13 CFR Parts 121, 124, 125, 126, 127, 128, 134.
When: Comments are due by October 7, 2024. All comments received will be posted here.
For more information on the proposed rulemaking and how to submit comments click here.
