[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR124.108]



[Page 373-374]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 124_8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS 

DETERMINATIONS--Table of Contents

 

                   Subpart A_8(a) Business Development

 

Sec. 124.108  What other eligibility requirements apply for individuals 

or businesses?



    (a) Good character. The applicant or Participant and all its 

principals must have good character.

    (1) If, during the processing of an application, adverse information 

is obtained from the applicant or a credible source regarding possible 

criminal conduct by the applicant or any of its principals, no further 

action will be taken on the application until SBA's Inspector General 

has collected relevant information and has advised the AA/8(a)BD of his 

or her findings. The AA/8(a)BD will consider those findings when 

evaluating the application.

    (2) Violations of any of SBA's regulations may result in denial of 

participation in the 8(a) BD program. The AA/8(a)BD will consider the 

nature and severity of the violation in making an eligibility 

determination.

    (3) Debarred or suspended concerns or concerns owned by debarred or 

suspended persons are ineligible for admission to the 8(a) BD program.

    (4) An applicant is ineligible for admission to the 8(a) BD program 

if the applicant concern or a proprietor, partner, limited liability 

member, director, officer, or holder of at least 10 percent of its 

stock, or another person (including key employees) with significant 

authority over the concern:

    (i) Lacks business integrity as demonstrated by information related 

to an indictment or guilty plea, conviction, civil judgment, or 

settlement; or

    (ii) Is currently incarcerated, or on parole or probation pursuant 

to a pre-trial diversion or following conviction for a felony or any 

crime involving business integrity.

    (5) If, during the processing of an application, SBA determines that 

an applicant has knowingly submitted false information, regardless of 

whether correct information would cause SBA to deny the application, and 

regardless of whether correct information was given to SBA in 

accompanying documents, SBA will deny the application. If, after 

admission to the program, SBA discovers that false information has been 

knowingly submitted by a firm, SBA will initiate termination proceedings 

and suspend the firm under Sec. Sec. 124.304 and 124.305. Whenever SBA 

determines that the applicant submitted false information, the matter 

will be referred to SBA's Office of Inspector General for review.

    (b) One-time eligibility. Once a concern or disadvantaged individual 

upon whom eligibility was based has participated in the 8(a) BD program, 

neither the concern nor that individual will be eligible again.

    (1) An individual who claims disadvantage and completes the 

appropriate SBA forms to qualify an applicant has participated in the 

8(a) BD program if SBA approves the application.

    (2) Use of eligibility will take effect on the date of the concern's 

approval for admission into the program.

    (3) An individual who uses his or her one-time eligibility to 

qualify a concern for the 8(a) BD program will be considered a non-

disadvantaged individual for ownership or control purposes of another 

applicant or Participant. The criteria restricting participation by non-

disadvantaged individuals will apply to such an individual. See 

Sec. Sec. 124.105 and 124.106.

    (4) When at least 50% of the assets of a concern are the same as 

those of a former Participant, the concern will not be eligible for 

entry into the program.



[[Page 374]]



    (5) Participants which change their form of business organization 

and transfer their assets and liabilities to the new organization may do 

so without affecting the eligibility of the new organization provided 

the previous business is dissolved and all other eligibility criteria 

are met. In such a case, the new organization may complete the remaining 

program term of the previous organization. A request for a change in 

business form will be treated as a change of ownership under Sec. 

124.105(i).

    (c) Wholesalers. An applicant concern seeking admission to the 8(a) 

BD program as a wholesaler need not demonstrate that it is capable of 

meeting the requirements of the nonmanufacturer rule for its primary 

industry classification.

    (d) Brokers. Brokers are ineligible to participate in the 8(a) BD 

program. A broker is a concern that adds no material value to an item 

being supplied to a procuring activity or which does not take ownership 

or possession of or handle the item being procured with its own 

equipment or facilities.

    (e) Federal financial obligations. Neither a firm nor any of its 

principals that fails to pay significant financial obligations owed to 

the Federal Government, including unresolved tax liens and defaults on 

Federal loans or other Federally assisted financing, is eligible for 

admission to or participation in the 8(a) BD program.

    (f) Achievement of benchmarks. Where actual participation by 

disadvantaged businesses in a particular SIC Major Group exceeds the 

benchmark limitations established by the Department of Commerce, SBA, in 

its discretion, may decide not to accept an application for 8(a) BD 

participation from a concern whose primary industry classification falls 

within that Major Group.



[63 FR 35739, 35772, June 30, 1998]