[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR130.700]

[Page 477-478]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 130_SMALL BUSINESS DEVELOPMENT CENTERS--Table of Contents
 
Sec.  130.700  Suspension, termination and non-renewal.

    (a) General. After SBA has entered into a Cooperative Agreement with 
a recipient organization, it shall not suspend, terminate or fail to 
renew the agreement unless SBA gives the recipient organization written 
notice setting forth the reasons and affording the recipient 
organization an opportunity for a hearing. Subject to this requirement 
and the provisions of Sec.  130.700(c) regarding non-renewal procedures 
for non-performance, the applicable general procedures for suspension 
and termination are contained in 13 CFR 143.43 and 143.44, and in OMB 
Circular A-110, Attachment L.
    (b) Causes. Causes which may lead to suspension, termination, or 
failure to renew include non-performance, poor performance, 
unwillingness to implement changes to improve performance, or any of the 
following reasons:
    (1) Disregard or material violation of these regulations;
    (2) A willful or material failure to perform under the Cooperative 
Agreement or under these regulations;
    (3) Conduct reflecting a lack of business integrity or honesty;
    (4) A conflict of interest causing real or perceived detriment to a 
small business concern, a contractor, the SBDC or SBA;
    (5) Improper use of Federal funds;
    (6) Failure of a Lead Center or its subcenters to consent to audits 
or examination or to maintain required documents or records;
    (7) Failure of the SBDC Director to work at the SBDC Lead Center on 
a full-time basis;
    (8) Failure promptly to suspend or terminate the employment of an 
SBDC Director, subcenter Director or other key employee upon receipt of 
knowledge by the recipient organization and/or SBA that such individual 
is engaging in or has engaged in conduct resulting in a criminal 
conviction or civil judgment which would cause the public to question 
the SBDC's business integrity, taking into consideration such factors as 
the magnitude, repetitiveness, harm caused and remoteness in time of the 
activity or activities underlying the conviction or judgment.
    (9) Violation of the SBDC's standards of conduct as specified in 
these rules and as established by the SBDC pursuant to these rules; or
    (10) Any other cause not otherwise specified which materially and 
adversely affects the operation or integrity of an SBDC or the SBDC 
program.
    (c) Non-Renewal Procedure. (1) Subject to Sec.  130.700(a), when an 
SBA District Director believes there is sufficient evidence of SBDC 
nonperformance, poor performance or unwillingness to implement changes 
to improve performance, under the terms of the Cooperative Agreement or 
these regulations, the District Director shall notify the SBDC Director 
and any other appropriate official of the recipient organization of an 
intention not to approve its renewal application.

[[Page 478]]

    (2) Notice can be submitted at any time during the budget period, 
but normally should be sent no later than 3 months prior to the due date 
for renewal applications at the District Office.
    (3) The notice shall specifically cite the reasons for the intention 
not to renew. It must allow the recipient organization 60 days within 
which to change its operations to correct the problems cited in the 
notice, and to report to the Project Officer, in writing, regarding the 
results of such changes.
    (4) If the recipient organization is unwilling or unable to address 
the specific problem areas to the satisfaction of the SBA District 
Office within the 60-day period, the SBA Project Officer shall have ten 
(10) calendar days after expiration of the 60 days to submit to the AA/
SBDCs a written description of the unresolved issues, a summary of the 
positions of the District Office on the issues, and any supportive 
documentation.
    (5) The AA/SBDCs shall transmit a written, final decision to the 
recipient organization, the SBDC Director, the SBA Project Officer and 
other appropriate SBA field office personnel within 30 calendar days of 
receipt of such documentation, unless an extension of time is mutually 
agreed upon by the recipient organization and the AA/SBDCs.
    (6) The AA/SBDCs shall consider written documentation of the issues 
to be resolved, including all relevant correspondence between the 
Project Officer, District Director and any other SBA personnel and the 
affected recipient organization. At a minimum, such documentation shall 
commence with the first written notice of issues invoking the non-
renewal procedure. In addition, the AA/SBDCs also may communicate with 
the recipient organization and appropriate SBA personnel.
    (7) If the AA/SBDCs determines that the evidence submitted 
establishes nonperformance, ineffective performance or an unwillingness 
to implement suggested changes to improve performance, the AA/SBDCs 
shall have full discretion to order non-renewal of the SBDC. The SBA 
District Office shall then pursue proposals from other organizations 
interested in applying for SBDC designation. The incumbent SBDC shall 
have until the end of the budget period or 120 days, whichever is 
longer, to conclude operations and to submit close-out documents to the 
SBA District Office. Close-out procedures shall conform with applicable 
OMB Circulars.
    (d) Effect of action on subcenter. If competing applications are 
being accepted, a subcenter of the previously funded recipient 
organization may apply for designation as the recipient organization, so 
long as the subcenter was not involved in the conduct leading to non-
renewal or termination of the former recipient organization.