[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: 13CFR124.405]



[Page 387-389]

 

                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. 124.405  How does a Participant obtain Federal Government surplus 

property?



    (a) General. (1) Pursuant to 15 U.S.C. 636(j)(13)(F), eligible 

Participants may receive surplus Federal Government property from State 

Agencies for Surplus Property (SASPs). The procedures set forth in 41 

CFR Part 101-44 and this section will be used to transfer surplus 

property to eligible Participants.

    (2) The property which may be transferred to SASPs for further 

transfer to eligible Participants includes all personal property which 

has been determined to be ``donable'' as defined in 41 CFR 101-44.001-3.

    (b) Eligibility to receive Federal surplus property. To be eligible 

to receive Federal surplus property, on the date of transfer a concern 

must:

    (1) Be in the 8(a) BD program;

    (2) Be in compliance with all program requirements, including any 

reporting requirements;

    (3) Not be debarred, suspended, or declared ineligible under part 9, 

subpart 9.4 of the Federal Acquisition Regulations, Title 48 of the Code 

of Federal Regulations;

    (4) Not be under a pending 8(a) BD program suspension, termination 

or early graduation proceeding; and

    (5) Be engaged or expect to be engaged in business activities making 

the item useful to it.

    (c) Use of acquired surplus property. (1) Eligible Participants may 

acquire surplus Federal property from any SASP located in any state, 

provided the concern represents and agrees in writing:

    (i) As to what the intended use of the surplus property is to be and 

that this use is consistent with the objectives of the concern's 8(a) 

business plan;

    (ii) That it will use the property to be acquired in the normal 

conduct of its business activities or be liable for the fair rental 

value from the date of its receipt;

    (iii) That it will not sell or transfer the property to be acquired 

to any party other than the Federal Government during its term of 

participation in the 8(a) program and for one year after it leaves the 

program;

    (iv) That, at its own expense, it will return the property to a SASP 

or transfer it to another Participant if directed to do so by SBA 

because it has not used the property as intended within one year of 

receipt;

    (v) That, should it breach its agreement not to sell or transfer the 

property, it will be liable to the Government for the established fair 

market value or the sale price, whichever is greater, of the property 

sold or transferred; and

    (vi) That it will give SBA access to inspect the property and all 

records pertaining to it.

    (2) A firm receiving surplus property pursuant to this section 

assumes all liability associated with or stemming from the use of the 

property.

    (3) If the property is not placed in use for the purposes for which 

it was intended within one year of its receipt, SBA may direct the 

concern to deliver the property to another Participant or to the SASP 

from which it was acquired.

    (4) Failure to comply with any of the commitments made under 

paragraph (c)(1) of this section constitutes a basis for termination 

from the 8(a) program.

    (d) Procedures for acquiring Federal Government surplus property. 

(1) Participants may participate in the surplus property distribution 

program administered by the SASPs to the same extent, but with no 

special priority over, other authorized transferees. See 41 CFR subpart 

101-44.2.

    (2) Each Participant seeking to acquire Federal Government surplus 

property from a SASP must:



[[Page 388]]



    (i) Certify in writing to the SASP that it is eligible to receive 

the property pursuant to paragraph (b) of this section;

    (ii) Make the written representations and agreement required by 

paragraph (c)(1) of this section; and

    (iii) Identify to the SASP its servicing SBA field office.

    (3) Upon receipt of the required certification, representations, 

agreement, and information set forth in paragraph (d)(2) of this 

section, the SASP must contact the appropriate SBA field office and 

obtain SBA's verification that the concern seeking to acquire the 

surplus property is eligible, and that the identified use of the 

property is consistent with the concern's business activities. SASPs may 

not release property to a Participant without this verification.

    (4) The SASP and the Participant must agree on and record the fair 

market value of the surplus property at the time of the transfer to the 

Participant. The SASP must provide to SBA a written record, including 

the agreed upon fair market value, of each transaction to a Participant 

when any property has been transferred.

    (e) Costs. Participants acquiring surplus property from a SASP must 

pay a service fee to the SASP which is equal to the SASP's direct costs 

of locating, inspecting, and transporting the surplus property. If a 

Participant elects to incur the responsibility and the expense for 

transporting the acquired property, the concern may do so and no 

transportation costs will be charged by the SASP. In addition, the SASP 

may charge a reasonable fee to cover its costs of administering the 

program. In no instance will any SASP charge a Participant more for any 

service than their established fees charged to other transferees.

    (f) Title. The title to surplus property acquired from a SASP will 

pass to the Participant when the Participant executes the applicable 

SASP distribution documents and takes possession of the property.

    (g) Compliance. (1) SBA will periodically review whether 

Participants that have received surplus property have used and 

maintained the property as agreed. This review may include site visits 

to visually inspect the property to ensure that it is being used in a 

manner consistent with the terms of its transfer.

    (2) Participants must provide SBA with access to all relevant 

records upon request.

    (3) Where SBA receives credible information that transferred surplus 

property may have been disposed of or otherwise used in a manner that is 

not consistent with the terms of the transfer, SBA may investigate such 

claim to determine its validity.

    (4) SBA may take any action to correct any noncompliance involving 

the use of transferred property still in possession of the Participant 

or to enforce any terms, conditions, reservations, or restrictions 

imposed on the property by the distribution document. Actions to enforce 

compliance, or which may be taken as a result of noncompliance, include 

the following:

    (i) Requiring that the property be placed in proper use within a 

specified time;

    (ii) Requiring that the property be transferred to another 

Participant having a need and use for the property, returned to the SASP 

serving the area where the property is located for distribution to 

another eligible transferee or to another SASP, or transferred through 

GSA to another Federal agency;

    (iii) Recovery of the fair rental value of the property from the 

date of its receipt by the Participant; and

    (iv) Initiation of proceedings to terminate the Participant from the 

8(a) BD program.

    (5) Where SBA finds that a recipient has sold or otherwise disposed 

of the acquired surplus property in violation of the agreement covering 

sale and disposal, the Participant is liable for the agreed upon fair 

market value of the property at the time of the transfer, or the sale 

price, whichever is greater. However, a Participant need not repay any 

amount where it can demonstrate to SBA's satisfaction that the property 

is no longer useful for the purpose for which it was transferred and 

receives SBA's prior written consent to transfer the property. For 

example, if a piece of equipment breaks down beyond repair, it may be 

disposed of without being



[[Page 389]]



subject to the repayment provision, so long as the concern receives 

SBA's prior consent.

    (6) Any funds received by SBA in enforcement of this section will be 

remitted promptly to the Treasury of the United States as miscellaneous 

receipts.



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