[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: 13CFR124.111]



[Page 378]

 

                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. 124.111  Do Community Development Corporations (CDCs) have any 

special rules for applying to the 8(a) BD program?



    (a) Concerns owned at least 51 percent by CDCs (or a wholly owned 

business entity of a CDC) are eligible for participation in the 8(a) BD 

program and other federal programs requiring SBA to determine social and 

economic disadvantage as a condition of eligibility. These concerns must 

meet all eligibility criteria set forth in Sec. 124.101 through Sec. 

124.108 and Sec. 124.112 to the extent that they are not inconsistent 

with this section.

    (b) A concern that is at least 51 percent owned by a CDC (or a 

wholly owned business entity of a CDC) is considered to be controlled by 

such CDC and eligible for participation in the 8(a) BD program, provided 

it meets all eligibility criteria set forth or referred to in this 

section and its management and daily business operations are conducted 

by one or more individuals determined to have managerial experience of 

an extent and complexity needed to run the concern.

    (c) A concern that is at least 51 percent owned by a CDC (or a 

wholly owned business entity of a CDC) must qualify as a small business 

concern as defined in part 121 of this title. The size standard 

corresponding to the primary industry classification of the applicant 

concern applies for determining size. SBA will determine the concern's 

size independently, without regard to its affiliation with the CDC or 

any other business enterprise owned by the CDC, unless the Administrator 

determines that one or more such concerns owned by the CDC have 

obtained, or are likely to obtain, a substantial unfair competitive 

advantage within an industry category.

    (d) A CDC cannot own 51% or more of another firm which, either at 

the time of application or within the previous two years, has been 

operating in the 8(a) program under the same primary SIC code as the 

applicant. A CDC may, however, own a Participant or an applicant that 

conducts or will conduct secondary business in the 8(a) BD program under 

the same SIC code that a current Participant owned by the CDC operates 

in the 8(a) BD program as its primary SIC code.

    (e) SBA does not deem an individual involved in the management or 

daily business operations of a CDC-owned concern to have used his or her 

individual eligibility within the meaning of Sec. 124.108(b).

    (f)(1) A CDC-owned applicant concern must be in business for at 

least two years, as evidenced by income tax returns for each of the two 

previous tax years showing operating revenues in the primary industry in 

which the applicant is seeking 8(a) BD certification, or demonstrate 

potential for success as set forth in paragraph (e)(2) of this section.

    (2) In determining whether a CDC-owned concern has the potential for 

success, SBA will look at a number of factors including, but not limited 

to:

    (i) The technical and managerial experience and competence of the 

individual(s) who will manage and control the daily operation of the 

concern;

    (ii) The financial capacity of the concern; and

    (iii) The concern's record of performance on any previous Federal or 

private sector contracts in the primary industry in which the concern is 

seeking 8(a) certification.

    (g) A CDC-owned applicant and all of its principals must have good 

character as set forth in Sec. 124.108(a).