This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

76625 

Vol. 88, No. 214 

Tuesday, November 7, 2023 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 130 

[Docket No. SBA–2015–0005] 

RIN 3245–AE05 

Small Business Development Centers 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Final rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA or the Agency) 

issues this final rule to update its 

regulations for the Small Business 

Development Centers Program (the 

SBDC Program or the Program). The 

Office of Small Business Development 

Centers has not comprehensively 

updated its regulations since 1995. This 

final rule updates and clarifies the 

regulations, making them more efficient, 

effective, transparent, and 

comprehensive, and puts them in 

alignment with current SBA policy and 

guidance. This final rule also includes 

policy and procedural changes 

identified by the Agency as necessary to 

preserve the integrity and legislative 

intent of the Program. Finally, it 

incorporates updates to conform with 

administrative requirements, cost 

principles, and audit requirements for 

Federal awards (Uniform Guidance). 

DATES: Effective date: December 7, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Rachel Karton, Program Manager for the 

SBDC Program, at 202–205–6766 or 

rachel.newman-karton@sba.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Statutory 

The SBDC Program was authorized in 

1980 by the Small Business 

Development Centers Act of 1980 (Pub. 

L. 96–302, 94 Stat. 833) and is currently 

codified in section 21 of the Small 

Business Act, 15 U.S.C. 648 (the Act). 

According to the Act, the purpose of the 

Program is to assist in establishing 

SBDCs explicitly to provide 

‘‘management and technical assistance’’ 

to small businesses. Section 21(a)(3)(A) 

requires SBA to consult with the 

recognized association of SBDCs in any 

rulemaking action for the Program. 

B. History 

Title II of the Small Business 

Development Act of 1980 authorized the 

SBDC Program at an initial annual 

funding level of $8.5 million. The new 

law specifically provided for Federal 

funding to be matched one-for-one with 

non-Federal funds and required an 

evaluation of the Program to be 

submitted to Congress by January 31, 

1983. 

SBA’s Associate Administrator, Small 

Business Development Centers (AA/ 

SBDC) holds statutory responsibility for 

the general management and oversight 

of the SBDC Program by means of a 

cooperative agreement with each 

recipient organization. A recipient 

organization is an institution of higher 

education or a state agency which 

receive Federal funds to operate an 

SBDC. Recipient organizations 

administer the SBDC Program to 

provide small businesses and aspiring 

entrepreneurs with a wide array of 

technical assistance, help strengthen 

business performance and 

sustainability, and enable the creation of 

new business entities. 

The SBDC Program regulations were 

revised in 1995, see 60 FR 31504 (June 

13, 1995). The statute authorizing the 

SBDC Program has since been amended 

numerous times. The annual notice of 

funding opportunity has become, for all 

practical purposes, the document which 

interprets statutory requirements of the 

Program and aligns them with current 

policies and procedures. To maintain 

consistency in Program administration 

and implementation, it is necessary to 

revise the regulations to outline current 

policies and procedures. Many of the 

proposed changes are enforced through 

the current notice of funding 

opportunity. Therefore, SBA revised 

Program regulations to incorporate those 

changes for efficiency and transparency 

of the SBDC Program. 

1. Summary of Advanced Notice of 

Proposed Rulemaking 

SBA published an advanced notice of 

proposed rulemaking (ANPRM) on April 

2, 2015, at 80 FR 17708, seeking 

comments on the development of new 

definitions, clarification of existing 

program requirements, and the renewal 

or termination of the notice of award. 

The ANPRM also solicited comments on 

international trade counselor 

certification requirements, required 

steps for the selection of Lead Center 

Directors, procedures for international 

travel, and procedures regarding the 

determination to effect suspension, 

termination or nonrenewal of an SBDC’s 

cooperative agreement. 

SBA received 133 comments on this 

ANPRM, which were considered during 

the development of the proposed rule. 

Comments received generally fell into 

four categories: the role of the District 

Office, definitions/clarifications, client 

confidentiality, and the Lead Center 

Director hiring process. SBA took these 

comments under advisement when 

writing the proposed rule. 

2. Summary of the Notice of Proposed 

Rulemaking 

The notice of proposed rulemaking 

was published on December 13, 2022, at 

87 FR 76127, with a comment period of 

60 days. Following the publication of 

the NPRM, SBA received approximately 

350 comments from a broad range of 

stakeholders on a diversity of issues 

relating to the proposed rule. These 

included comments from the 

Association of Small Business 

Development Centers, several Small 

Business Development Centers, 

Chambers of Commerce, banking and 

lending institutions and other economic 

development organizations. 

First, SBA proposed to clarify and 

define the role of the District Office 

regarding grant oversight activities by 

proposing new definitions and 

procedures throughout program 

regulations. Second, SBA proposed the 

addition of 23 new definitions and the 

revision of existing definitions to 

explicitly define and clarify the various 

roles, procedures, documents, and 

categories of funding. Third, a new 

section was proposed to codify SBDC 

client confidentiality requirements 

under the Act. Finally, the proposed 

rule added the current process of hiring 

a Lead Center Director, as outlined in 

the cooperative agreement. The intent of 

the proposed rule changes was to make 

Program operations more streamlined 

and less onerous for recipient 

organizations and the Agency and to 


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align with current practices in the 

notice of funding opportunity and 

cooperative agreement. Many of the 

proposed changes made, which were 

discussed in comments received 

through the ANPRM are already 

required and implemented by the 

SBDCs; however, these final regulations 

will codify existing requirements to 

ensure consistency in Program 

regulations. 

Through the NPRM, the Agency also 

sought feedback on its existing 

collection and use of individual SBDC 

client data. 

3. Summary of Final Rule 

In this final rule SBA incorporates the 

Uniform Guidance at 2 CFR part 200, 

which streamlined and consolidated 

government requirements for receiving 

and using Federal awards to reduce 

administrative burden and improve 

outcomes; makes various revisions to 

align the regulations with the text of the 

SBDC statute; and adopts the proposed 

rule with changes from the comments 

received from the publication of the 

NPRM. 

C. Discussion of Comments 

SBA received approximately 350 

comments on the proposed rule, 50 of 

which pertained to SBA’s new section 

regarding client confidentiality; 12 

regarding the new definition of the 

accreditation process; 31 comments on 

the definition of program income; 13 

comments on the definition of SBDC 

Director; 30 comments on new 

§ 130.310(c), Area of service; 20 

comments on new § 130.320(e), 

Operating requirements; 34 comments 

on § 130.330(b)(5), SBDC services and 

restrictions on services; 14 comments on 

revised § 130.350(a)(3) and 6 comments 

on § 130.350(a)(6) regarding SBDC 

advisory boards; 15 comments regarding 

new § 130.370(b), Contracts with other 

Federal agencies; 11 comments 

regarding new § 130.460(g)(1) regarding 

the salaries of the State Directors; and 

other as stated below. SBA also received 

comments from The National Center for 

American Indian Enterprise 

Development requesting (1) to include 

‘‘tribal’’ in § 130.100, Introduction, 

which SBA has accepted and (2) 

changes to § 130.200, Eligible entities, to 

include tribal communities and to add 

a new paragraph which states, 

‘‘including a recipient organization that 

teams with a tribal government, Native 

American private or non-profit business 

assistance center or Native American 

community development financial 

institution that provides entrepreneurial 

development counseling to small 

businesses and entrepreneurs in native 

communities.’’ SBA is unable to change 

this request as eligible entities are 

outlined in the Small Business Act, 15 

U.S.C. 656 and 648. However, SBA 

supports tribal governments and entities 

to collaborate with SBDC Lead Center 

Directors and their networks of Service 

Centers. 

Comments Opposing SBA’s Proposed 

Changes to Various Definitions in 

§ 130.110 

a. SBA received 12 comments on the 

proposed definition of accreditation 

process. The commenters expressed that 

the accreditation process evaluates 

SBDC programs based on standards 

derived from the Baldrige Performance 

Excellence Program. The commenters 

further stated that the accreditation 

process focuses on overall program 

improvement that is consistent with the 

standards providing conditions and 

recommendations on how to work 

toward continuous improvement based 

on observations during the review. The 

commenters request that SBA revise the 

definition of accreditation process to 

include such information. 

SBA Response: SBA revised the 

definition of accreditation process that 

reflects the commenters suggestions and 

current use of the term. The new 

definition states that it’s the process by 

which evaluation and assessment occurs 

to assist an SBDC with assessing its 

processes and outlining areas needing 

improvement by providing 

recommendations to strengthen delivery 

of services and assistance. 

b. SBA received three comments on 

the definition of application. The 

commenters stated that this definition 

needs to include the term ‘‘renewal 

application.’’ 

SBA Response: SBA took these 

comments under consideration and 

revised the definition of application to 

include the term ‘‘renewal application.’’ 

c. SBA received one comment on the 

definition of cash match requesting to 

include waived indirect costs (IDC) in 

the definition. The commenter further 

stated that when it states that IDC is not 

allowed as cash match, adding the 

verbiage of the waived IDC may be 

important to include here. Currently, 

waived indirect costs are included as 

cash match after 50 percent of actual 

cash are acknowledged in the 

agreement. 

SBA Response: SBA rejects this 

comment. As defined in 2 CFR part 200, 

waived indirect cost is the difference 

between the total amount of indirect 

costs charged to a Federal award and the 

total amount of indirect costs that could 

have been charged to a Federal award. 

The regulation in 2 CFR part 200 refers 

to this as unrecovered indirect costs. 

d. SBA received six comments on the 

new proposed definition of 

clearinghouse. The comments state that 

the definition should be reflected as a 

collection of management information 

and a source of market and industrial 

information that all SBDC programs 

have access to assist clients. It also 

collects management information for 

SBDC networks. 

SBA Response: SBA revised the 

definition of clearinghouse to define the 

term more clearly and accurately as 

requested by the commenters. The 

definition now states that the 

clearinghouse is a source of market and 

industry information made available to 

all SBDC networks to assist clients and 

supports the exchange of information 

between SBDCs. 

e. SBA received eight comments on 

the definition of client. The commenters 

state that there should be a qualifier 

before the word ‘‘entrepreneur’’ such as 

‘‘nascent’’ or ‘‘emerging’’ or 

‘‘developing’’ to clarify that this applies 

to both established business owners and 

those who plan to start a business. 

SBA Response: SBA revised the 

definition of client to include the word 

‘‘nascent’’ before the word 

‘‘entrepreneur.’’ 

f. SBA received 31 comments on the 

definition of program income. 

Commenters stated that this revised 

definition would make almost all funds 

and not just training registration fees 

into program income funds and 

ineligible for use as match. Commenters 

also stated that if the intent of 

‘‘sponsorship agreement’’ was meant to 

be a co-sponsorship agreement that has 

been traditionally used with SBDC 

resource partners when hosting a 

training event, the language would need 

to be changed to define ‘‘sponsorship 

agreement.’’ 

SBA Response: SBA accepts the 

comments and refers the reader to the 

definition of program income as defined 

in 2 CFR part 200. 

g. SBA received 13 comments on the 

definition of SBDC Director. 

Commenters stated that the definition 

should read ‘‘at least 75 percent of 

whose time is allocated to’’ or at least 

‘‘100 percent of the individual’s time 

and effort is allocated to the SBDC grant 

OR other grant programs . . .’’ An 

alternative definition that was suggested 

was a minor grammar change ‘‘100 

percent of the individual’s time and 

effort is allocated to the SBDC grant or 

other grant programs . . .’’ 

SBA Response: SBA agrees with the 

commenters and revised the definition 

of SBDC Director to state that no less 


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than 75 percent of the individual’s time 

and effort is allocated to the SBDC grant. 

h. SBA received three comments on 

the definition of specialized services. 

The commenters stated that this is a 

vague definition and that it seems to 

imply that the SBDC must hire an 

outside consultant for a client which 

makes no sense. 

SBA Response: SBA agrees with the 

commenters and deleted the words 

‘‘hiring outside consultants for a client’’ 

from the definition. 

Comments Opposing SBA’s Proposed 

Changes to Eligible Entities in § 130.200 

a. SBA received one comment 

opposing the proposed change to the 

eligible entities’ requirements of the 

recipient organization in § 130.200(2)(c). 

The commenters stated that currently 

SBDC hosts are colleges or state offices. 

Instead of restricting SBDC hosts, it 

would be better to expand hosts to nongovernmental entities such as Economic 

Development offices that may not be a 

state office. Colleges may not be a good 

fit for SBDC since they have different 

missions, and some colleges believe the 

SBDC they host to conflict with the 

college’s need to increase student 

enrollment for state funding by head 

count. 

SBA Response: SBA is unable to 

change this requirement as it required in 

the Small Business Act, 15 U.S.C. 656 

and 648(a)(1), which states, in part, that 

after December 31, 1990, the 

Administration shall not make a grant to 

any applicant other than an institution 

of higher education or a women’s 

business center operating pursuant to 

section 656 of the title as a Small 

Business Development Center unless the 

applicant was receiving a grant 

(including a contract or cooperative 

agreement) on such date. The previous 

sentence shall not apply to an applicant 

that has its principal office located in 

the Commonwealth of the Northern 

Mariana Islands. Therefore, SBA is 

rejecting this comment. 

b. SBA received five comments on 

new proposed paragraphs (e) and (f) 

stating that there is a concern that this 

new requirement will inherently restrict 

the ability of the SBDC Lead Center to 

engage partners that are not housed 

within higher education and that this 

will limit the ability of the SBDC to 

reach and serve rural and underrepresented populations. 

SBA Response: SBA is unable to 

change this requirement as it required in 

the Small Business Act, 15 U.S.C. 656 

and 648(a)(1), which states, in part, that 

after December 31, 1990, the 

Administration shall not make a grant to 

any applicant other than an institution 

of higher education or a women’s 

business center operating pursuant to 

section 656 of the title as a Small 

Business Development Center unless the 

applicant was receiving a grant 

(including a contract or cooperative 

agreement) on such date. The previous 

sentence shall not apply to an applicant 

that has its principal office located in 

the Commonwealth of the Northern 

Mariana Islands. Therefore, SBA 

rejected this comment. 

Comments Opposed to § 130.310—Area 

of Service 

SBA received 30 comments regarding 

the new proposed paragraph (c) stating 

that there is a concern that this new 

requirement will inherently restrict the 

ability of the SBDC Lead Center to 

engage partners that are not housed 

within higher education and that this 

will limit the ability of the SBDC to 

reach and serve rural and underrepresented populations. 

SBA Response: SBA accepts these 

comments and revised the paragraph to 

provide that for any applicant 

commencing after January 1, 1992, the 

recipient organization must ensure that 

any new SBDC service centers 

established within its area of service, to 

the extent practicable, are primarily 

housed within institutions of higher 

education or a Women’s Business 

Center (WBC), operating pursuant to 

section 29 of the Small Business Act (15 

U.S.C. 656) as stated in section 21(a)(1) 

of the Small Business Act (15 U.S.C. 

648(a)(1)). 

Comments Opposing SBA’s Proposed 

Changes to § 130.320—SBDC Operating 

Requirements (Formerly § 130.330) 

a. There is one comment opposing the 

proposed revision to paragraph (a) 

which states that full time is more than 

75 percent. The proposed paragraph 

states that the Lead Center must be an 

independent department within the 

recipient organization, having its own 

staff, including a full-time SBDC 

Director. 

SBA Response: SBA accepts this 

comment and revises the paragraph to 

delete the reference to ‘‘full-time.’’ 

b. SBA received 20 comments 

opposing the proposed new paragraph 

(e) stating that this new paragraph will 

severely limit the ability of SBDCs to 

coordinate and collaborate with outside 

entities. If ‘‘any type of organization’’ 

can be considered an ‘‘SBDC service 

center’’ then literally anybody SBDCs 

work with becomes an SBDC service 

centers. If the point is to track SBDC 

performance than this will lead to 

overcounting, double-counting and 

taking credit for other people’s efforts. 

Also, ‘‘any funds’’ could lead to serious 

problems with outside organizations 

that have no wish to submit to SBA 

scrutiny. 

SBA Response: SBA accepts this 

comment and revised the paragraph to 

narrow the scope of the requirement to 

read as follows: ‘‘Any entity that is 

using the term ‘Small Business 

Development Center’ and under contract 

with the Lead Center and receiving 

program funds, whether . . .’’ and at the 

end of the paragraph replaces the word 

‘‘entity’’ with the words ‘‘Service 

Center.’’ 

c. SBA received one comment 

opposing new paragraph (f) which refers 

to the technology designation for an 

SBDC stating that the America’s Small 

Business Development Centers (ASBDC) 

voted to and did delete the Technology 

Development Center Designation under 

the accreditation program in 2022 in 

response to the growth and availability 

of technology services in all SBDCs. 

SBA Response: SBA deleted 

paragraph (f) since the new 

accreditation standards no longer 

address the technology designation. 

Comments Opposing SBA’s Proposed 

Revisions to § 130.330—SBDC Services 

and Restrictions on Services (Formerly 

§ 130.340) 

a. SBA received six comments on 

newly revised paragraph (a) stating that 

not all SBDCs provide either training or 

specialized services. This should be 

corrected to read ‘‘with counseling, and 

whenever practicable, training and 

specialized services.’’ An SBDC Lead 

Center should use and compensate 

qualified small business vendors as one 

of its resources. Another commenter 

stated that this language is unclear and 

probably a holdover from old statutory 

language. 

SBA Response: SBA accepts the 

comments and revised the paragraph to 

include, ‘‘to the extent practicable.’’ 

b. SBA received one comment on new 

§ 130.330(b)(4) stating that this would 

be a new requirement and that should 

the Agency consider this a priority, the 

Agency should include this information 

on SBA Form 641. 

SBA Response: SBA deleted this 

paragraph. The remaining paragraphs 

are redesignated from paragraphs (b)(5) 

and (6) to paragraphs (b)(4) and (5) in 

this final rule. 

c. SBA received one comment on 

newly revised § 130.330(b)(3) requesting 

that SBA define ‘‘direct or indirect 

role.’’ 

SBA Response: SBA agrees that an 

SBDC should not act as an agent for the 

client. SBA inserted after ‘‘however’’ 

‘‘SBDCs may not attest to a client’s 


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readiness or creditworthiness to the 

lending institution either verbally or in 

writing’’. Further SBA deleted ‘‘neither 

SBDC staff nor their agents may take a 

direct or indirect role in representing 

clients in loan negotiations.’’ 

d. SBA received 34 comments on 

newly revised § 130.330(b)(5) (now 

§ 130.330(b)(4)) stating first, that 

currently SBDC personnel are asked to 

participate in many panels that provide 

input concerning loan applicants. In 

some states, the State Economic 

Development Departments rely on SBDC 

personnel to assist them in evaluating 

numerous applicants for state 

assistance. Second, why is one SBA 

Resource Partner allowed to make loans 

(Women’s Business Centers) while the 

others are not. According to several 

studies the biggest challenge faced by 

minority entrepreneurs is access to 

capital. Eighty-three percent of minority 

entrepreneurs have difficulties 

accessing capital and 76 percent rely on 

personal and family savings. By servings 

on panels or board that review loan 

applications, SBDC personnel become 

more knowledgeable about the financing 

trends in their communities and better 

understand the advising needs of 

minority owned business. Finally, some 

SBDC counselors have been members of 

loan committees of Black and Latino 

associations and instrumental in 

widening access to capital for minority 

entrepreneurs and learning of their 

technical assistance (advising) needs. 

Another commenter stated that SBDC 

personnel participate on Loan 

Evaluation Boards where SBDC 

personnel routinely serve on boards, 

panels, etc. and that SBDC personnel are 

covered by SBA’s conflict of interest 

codified at 2 CFR 200.112. 

SBA Response: SBA agrees with the 

commenters and revised the language to 

state ‘‘SBDCs may participate on boards 

and panels of financial institutions and 

with outside organizations but may not 

be involved in any final credit decisions 

involving SBDC clients or in making or 

servicing loans.’’ 

e. SBA received one comment 

regarding newly revised § 130.330(b)(6) 

(now § 130.330(b)(5)) requesting that 

SBA define the word ‘‘advocate,’’ noting 

the current rules also mention the words 

‘‘may not advocate’’ but fails to define 

it for better universal understanding. 

SBA Response: SBA agrees with the 

commenter and revises the language to 

include ‘‘. . . but may not advocate for, 

promote, recommend approval . . .’’ to 

the paragraph. 

f. SBA received seven comments on 

revised § 130.340(c). Some comments 

requested that SBA not codify specific 

focus areas which are likely to change, 

and other commenters requested that 

specific focus areas, such as the 

‘‘employee-owned business concern, be 

included in this paragraph. 

SBA Response: SBA agrees not to 

include specific focus areas in the 

regulations as they could change which 

is now reflected in the regulation. Focus 

areas will be included in the notice of 

funding opportunity (NOFO) each year. 

Comments Opposing § 130.340— 

Specific Program Responsibilities 

(Formerly § 130.350) 

SBA received two comments on the 

proposed language stating that not all 

service centers provide training. The 

District Office and/or program manager 

may construe this to mean that all 

centers must provide training and that 

this would be a new requirement and 

could place a substantial financial 

burden on individual service centers. 

SBA Response: SBA agrees with the 

commenters and revises the language in 

new § 130.340(c)(5) to state that service 

centers should provide access to 

training. 

Comments Opposing § 130.350—SBDC 

Advisory Boards (Formerly § 130.360) 

a. SBA received 14 comments on 

proposed § 130.350(a)(3) stating that the 

proposed language is not supported by 

sec. 21(j)(1) of the Small Business Act, 

and may restrict advisory board 

membership from including local 

leaders, non-profit organization 

supporting underserved communities, 

etc. Further, these advisory boards 

should consist primarily of 

representatives from small businesses or 

associations representing small 

businesses, as well as local economic 

development and community 

organizations. Some SBDCs have small 

business champions, community 

development experts, and others with 

expert skills and experience that the 

SBDC would like to include as 

members. The commenters stated that it 

seems that SBDCs should have the 

flexibility to make this decision if they 

do indeed ensure that most of our 

members are from small businesses or 

associations representing small 

businesses. 

SBA Response: SBA accepts these 

comments and did not revise this 

paragraph. 

b. SBA received six comments on 

proposed § 130.350(a)(6) stating that this 

language precludes the possibility of 

advisory boards paying their own costs. 

Advisory board members are volunteers 

and often pay their own costs. 

SBA Response: SBA accepts this 

comment and agrees that the proposed 

language should be changed so that the 

Board members can pay for their own 

costs if they choose to do so. The 

paragraph now states that the reasonable 

cost of travel of any Board member for 

official Board activities may be paid out 

of the SBDC’s budget funds, and Federal 

and program funds are not to be used to 

compensate advisory board members for 

non-travel related expenses such as time 

and effort. 

Comments Opposed to § 130.370— 

Contracts With Other Federal Agencies 

SBA received 15 comments regarding 

proposed new § 130.370(b) stating that 

this requirement does not provide any 

responsibility for SBA to respond. The 

commenter requests that a five businessday response time from SBA be 

incorporated into the rule so that SBDCs 

are not precluded from participating in 

grant opportunities consistent with their 

mission. 

SBA Response: SBA accepts these 

comments and adds language to the end 

of the paragraph with a five-business 

day response timeframe. 

Comments Opposed to § 130.380— 

Client Privacy 

SBA received 50 comments regarding 

this new section stating they believe 

that this section compromises the intent 

of the privacy guidelines currently in 

practice without outlining specific 

practices the Agency must comply with 

to ensure that client data is not unduly 

disregarded. The commenters want to 

know who is responsible for the data. 

Currently, the SBDC controls the client 

identifying data and submits downloads 

that contain anonymized information 

for program performance monitoring. 

The commenter raises several questions 

regarding broadening access to the data 

including how it will impact client 

privacy and who will be responsible for 

the making these decisions. Further, the 

commenter has questions regarding 

responsibility for granting access to the 

client data. 

Finally, the commenter states that it 

seems as though Congress included a 

catch-all provision in the Small 

Business Act (section 21(a)(7)(C)(ii)) 

requiring that regulations regarding 

client privacy ‘‘shall, to the extent 

practicable, provide for the maximum 

amount of privacy protection.’’ 

Therefore, any lessening of that amount 

of privacy requires the SBA to take 

significant steps to limit disclosure. The 

proposed rule works in the opposite 

direction—towards more exposure, not 

less. The SBA might consider 

prescribing steps to protect that privacy. 

SBA response: SBA rejects these 

comments. The SBA complies with the 

statute protecting client privacy. First, 


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SBA allows clients to opt-in to obtain 

their contact data for the purpose of 

communication and surveys. SBDCs 

cannot refuse service for those who do 

not opt in; therefore, the client has the 

right to not disclose the information in 

most cases excluding the three 

exceptions. With regards to surveys, 

SBA will consult with the Recognized 

Organization prior to implementing a 

survey to coordinate any timing, 

minimizing duplicating any surveys that 

are currently being done, and protect 

the client’s privacy to the maximum 

extent possible. 

SBA believes that the language in the 

regulation does not compromise the 

intent of the privacy guidelines 

currently in place. 

The language states that the 641 has 

an opt-in clause for clients. Clients do 

not have to provide their information on 

the form. 

Comments Opposed to § 130.410—New 

Applications 

SBA received three comments 

regarding § 130.410(b) stating that while 

this paragraph only applies to new 

applicants to the SBDC program, it does 

raise issues surrounding foreign 

campuses, and relationships with other 

institutions outside the area of 

operation. 

SBA Response: SBA agrees with the 

comments received and removed the 

word ‘‘region’’ from the paragraph. 

Comments Opposed to § 130.420— 

Renewal Applications 

a. SBA received two comments on 

§ 130.420(c)(2) stating that this appears 

to be a subjective measure. The 

commenters asked how will the Agency 

define how quality is evaluated, or is 

the intent of this statement that the 

Agency will review the performance of 

a program relative to programmatic 

goals, and relative to prevailing 

economic conditions during that prior 

performance period? How will the 

Agency measure and assess quality of 

prior performance? 

SBA Response: SBA agrees with the 

commenters and added language to the 

paragraph that incorporates client 

satisfaction rates as a deciding factor. 

b. SBA received three comments on 

proposed new § 130.420(c)(5) stating 

that accreditation recommendations do 

not require action, they are simply 

recommendations for consideration and 

suggests this paragraph be rephrased to 

cite the current accreditation report, 

rather than recommendations. 

SBA Response: SBA accepts the 

comment. SBA replaces the word 

‘‘recommendations’’ with the word 

‘‘conditions.’’ 

Comments Opposing § 130.450— 

Matching Funds 

a. SBA received three comments on 

the revision of § 130.450(a) stating that 

the new language appears to contradict 

the funding requirement defined in the 

statute. 

SBA Response: SBA accepts this 

comment and revised the language in 

this paragraph to state that no more than 

50 percent of cash match may be 

provided through any allowable 

combination of additional cash, in-kind 

contributions, or indirect costs. 

b. SBA received seven comments 

regarding revised § 130.450(b) stating 

that this appears to be an overstep by 

the Agency that increases the reporting 

burden of the SBDC, with no 

discernable benefit to the Agency or the 

SBDC. Further, different hosts and 

partners have different requirements 

and expectations, and it is the 

responsibility of the SBDC to ensure 

that these needs are in alignment with 

the mission and vision of the program 

and to ensure that the needs are being 

met, should they wish to continue to 

receive that match funding. 

SBA Response: SBA rejects this 

comment but clarified the language by 

adding that only the additional 

requirements from SBA will need to be 

identified. Further, SBA requests this 

information to ensure that the NonFederal Entity’s (NFE) cost sharing and 

matching are not paid by Federal 

Government under another Federal 

award or by other Federal sources. 

Additionally, the SF424 requires the 

sources of match. Further, if match 

sources are not known, SBA could 

unknowingly approve those funds 

through the Notice of Award. 

c. SBA received one comment on 

proposed § 130.450(e) stating that 

matching funds includes in-kind which 

by definition is not under the direct 

management of the State Director. 

SBA Response: SBA rejects this 

comment as all funds are and should be 

under the authority of the State Director. 

When the SBDC accepts an in-kind 

donation the management of the SBDC 

is accountable for accurate reporting. 

SBA added the following sentence for 

clarity: ‘‘If in-kind contributions are 

utilized by the SBDC, the State Director 

or an SBDC Service Center Director is 

then considered to be in control of those 

contributions.’’ 

d. SBA received one comment on new 

proposed § 130.450(f) stating that this 

paragraph is objective and questioning 

why SBA is vesting special authority in 

the Grants Management Specialist 

(GMS). A program either meets the cash 

match or not. There is no determination 

to be made by the GMS or others. 

SBA Response: SBA rejects this 

comment. SBA needs to determine if 

there is sufficient cash match and has 

oversight responsibility of that match 

amount. Additionally, the GMS must 

determine and evaluate the proposal 

that proper cash match has been 

provided. 

e. SBA received five comments 

regarding proposed new § 130.450(g) 

stating that identifying overmatched 

funds is problematic. The policy of the 

university is to not report overmatch so 

that these funds can be used for 

leveraging other grants and 

opportunities. There are also concerns 

as to how this funding may be spent. 

This is problematic to the university 

and the SBDC organization. A benefit of 

the current SBDC model is that 

innovative and additional business 

services complement base SBDC 

services. Since SBA’s funds are limited, 

SBDCs must seek other sources of 

capital and should not be limited by this 

proposed requirement. 

SBA Response: SBA accepts this 

comment and revises the language to 

include that overmatching expenditures 

are those which are derived from 

eligible matching sources; are 

reasonable, allowable, and allocable to 

the SBDC program; are over and above 

the minimum match required to the 

Federal expenditures; and are included 

on the required SBDC financial 

reporting to SBA for the project period. 

Comments Opposed to § 130.460— 

Budget Justification 

a. SBA received seven comments 

regarding new proposed § 130.460(f) 

about lobbying. The commenter stated 

that the new paragraph seems to be a 

gratuitous restatement of current Office 

of Management and Budget (OMB) 

guidance. It is also confusing as state 

lobbying efforts are permitted as the 

purpose is to ‘‘reduce program costs’’ by 

obtaining matching funds. Another 

commenter states that this creates a 

problem with hosts, regarding state 

activities. There is an OMB exception 

regarding state activities ‘‘to reduce the 

cost or avoid material impairment’’. 

Also, this violates section 21(a)(3)(B) of 

Small Business Act (‘‘Circulars shall be 

incorporated by reference and shall not 

be set forth in summary or other form 

in regulations.’’). The commenter 

requests that the first sentence should 

be stricken. Also, lobbying definition is 

far more complex than this which gives 

a false impression of ‘‘any legislative 

contact.’’ Finally, another commenter 

suggests that this section should clearly 

state, as permitted by OMB, that SBDCs 


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can engage in lobbying in order to 

secure adequate public match funding. 

This will reduce ambiguity among 

Federal and state stakeholders. 

SBA Response: SBA accepts these 

comments and deleted the paragraph. 

b. SBA received 11 comments on 

revised proposed new § 130.460(f) 

regarding salaries of the State Directors. 

The commenters state that this language 

hasn’t been useful in the past when 

examining host institutions’ human 

resources departments on pay equality 

issues. The section is neither helpful 

nor enforceable and should be removed. 

Basing Center Director salaries on 

professor salaries does not make sense, 

particularly for Centers that are not 

based in higher education institutions. 

Furthermore, Centers and their Hosts 

must be able to stay competitive in the 

marketplace to hire top quality 

employees. Another commenter stated 

that if a recipient organization is not an 

educational institution, the salaries of 

the SBDC Lead Center Director and the 

subcenter Directors must approximate 

the average salaries of parallel positions 

within the recipient organization. In 

both cases, the recipient organization 

should consider the Director’s longevity 

in the Program, the number of 

subcenters, the size of the SBDC budget, 

the number of service centers, and the 

individual’s experience and 

background. 

SBA Response: SBA accepts these 

comments and deleted the reference to 

the salary but is keeping the rank in the 

organization and revising the text to 

state that where the recipient 

organization is an educational 

institution, the SBDC Lead Center 

Director and the SBDC Service Center 

Director at a minimum must be 

equivalent to a full professor and an 

assistant professor, respectively, in the 

school or department in which the 

SBDC is located. 

c. SBA received two comments on 

revised § 130.460(i) regarding travel. 

The commenter states that this entire 

section is covered by the omni-circular; 

the organizations and institutions that 

host SBDC programs have very clear 

guidelines on allowable versus 

unallowable travel expenses. 

SBA Response: SBA accepts these 

comments and will reference 2 CFR 

200.475 and NOFO for out-of-state and 

international travel. 

d. SBA received two comments on 

revised § 130.460(i)(2) regarding coach 

class travel. The commenter questions 

what is meant by coach class and how 

is this different than the omni-circular. 

SBA Response: SBA accepts these 

comments and deleted this paragraph. 

e. SBA received one comment on 

revised § 130.460(j) regarding dues 

stating that 2 CFR 200.454(a) Costs of 

the non-Federal entity’s membership in 

business, technical, and professional 

organizations are allowable. 

SBA Response: SBA accepts this 

comment and deleted this paragraph. 

Comments Opposing 13 CFR 130.480— 

Program Income 

a. SBA received one comment on 

revised paragraph (b) regarding the use 

of program income. The commenter 

stated that this is a legacy rule that 

should be reviewed by the Agency and 

that the CFR sets forth no such 

limitations. Given the Agency’s 

historical backlog for issuing notices of 

award along with the difficult Federal 

budget process, program income can be 

a valuable resource to provide services 

to clients during shutdowns or during 

the time when programs do not have an 

active Notice of Award due to Agency 

delays. 

SBA Response: SBA rejects this 

comment based on the Small Business 

Act section 21(a)(4)(A) which requires 

the recipient to match 100 percent 

Federal grant funding not less than 50 

percent cash and not more than 50 

percent of indirect costs and in-kind 

contributions. SBA interprets this 

paragraph to mean that program income, 

which are fees collected from recipients 

of assistance, is excluded to be used as 

matching funds. Further, SBA requests 

the sources of match to ensure that the 

NFE’s cost sharing and matching are not 

paid by the Federal Government under 

another Federal award or by other 

Federal sources. Additionally, forms 

submitted to the SBA require the NFE 

to provide the source of the matching 

funds. If the funding sources are not 

provided to the SBA, SBA could 

unknowingly approve an award with 

unallowable sources of matching funds. 

b. SBA received one comment on 

proposed new paragraph (e) regarding 

program income and SBDC sponsored 

activities. The commenter stated that 

they do not believe that funds received 

under a sponsorship agreement should 

be considered program income and that 

the requirement is not in 2 CFR 200.80. 

SBA Response: SBA accepts this 

comment and deleted this paragraph. 

Comments Opposing 13 CFR 130.490— 

Property Standard 

SBA received one comment opposing 

this section as it repeats guidelines 

outlined in 2 CFR part 200. 

SBA Response: SBA agrees with this 

comment and will delete this section 

from the regulation. 

Comments Opposing 13 CFR 130.500— 

Advances and Reimbursements 

SBA received one comment regarding 

this section stating that this is a 

restatement of what is in 2 CFR part 

200. 

SBA Response: SBA accepts this 

comment and removed the section as it 

is a restatement of what is in 2 CFR part 

200. 

Comments Opposing 13 CFR 130.600— 

Cooperative Agreement 

a. SBA received one comment 

opposing proposed paragraph (b) stating 

that it is in direct conflict with the 

Agency’s requirement to grant prior 

approval for contracts in § 130.620. 

SBA Response: SBA agrees with the 

commenter and revised the paragraph to 

state that SBA reserves the right to 

disapprove any sub-agreement entered 

into the by recipient organization with 

SBDC service center organizations, 

vendors, or contractors. 

b. SBA received one comment 

opposing proposed paragraph (d) stating 

that this paragraph is already covered by 

2 CFR part 200. 

SBA Response: SBA agree with the 

commenter and deleted this paragraph. 

Comments Opposing 13 CFR 130.610— 

Grant Administration and Cost 

Principles 

a. SBA received one comment 

regarding the new proposed paragraph 

(b) stating that this paragraph is already 

covered by 2 CFR part 200. 

SBA Response: SBA agree with the 

commenter and deleted this paragraph. 

b. SBA received one comment 

regarding the new proposed paragraph 

(c) stating that there is nothing to 

preclude SBA to propose additional 

requirements beyond 2 CFR part 200. 

SBA Response: SBA accepts the 

comments and deleted this paragraph. 

Comments Opposing 13 CFR 130.620— 

Revisions and Amendment to 

Cooperative Agreements 

a. SBA received two comments 

regarding revised paragraph (a)(2) 

questioning whether this paragraph is 

regarding sub-awards or contracts. 

Additionally, the comments state that 

this requirement is already covered by 

2 CFR part 200. 

SBA Response: SBA agrees with the 

commenters and deleted paragraph 

(a)(2). 

b. SBA received two comments on 

proposed new paragraph (a)(3) stating 

that they encourage the regulations to 

include language describing how SBA 

will publicize and distribute any 

supplemental funds it may have and to 

seek input from SBDCs regarding 


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distribution of these funds in a way that 

supports the overall program and/or 

individual SBDCs. The summary 

mentions supplemental funds but there 

is no language regarding those funds 

and how they would be distributed. 

SBA Response: SBA accepts this 

comment and revises the paragraph to 

add the following language, ‘‘If 

supplemental funds are available for 

distribution, SBA will publish a notice 

of funding opportunity in consultation 

with the Recognized Organization.’’ 

c. SBA received two comments 

regarding new paragraph (b) asking if 

SBA will amend a cooperative 

agreement with one SBDC decreasing its 

award in order to increase another 

SBDC’s cooperative agreement award to 

authorize unanticipated out-of-state 

travel? 

SBA Response: SBA accepts this 

comment and adds the following 

language at the beginning of paragraph 

(b)(1), ‘‘In consultation with the 

Recognized Organization . . .’’ 

Comments Opposed to § 130.630— 

Dispute Resolution Procedures 

SBA received three comments 

regarding revised paragraph (a)(1). The 

comments question why the District 

Office needs to be involved in the 

process of a financial dispute resolution 

since the District Office in not involved 

in the financial oversight process. 

SBA Response: SBA accepts this 

comment and replaces the District 

Office reference with the Grants 

Management Officer. 

Comments Opposed to § 130.700— 

Suspension, Termination, and NonRenewal 

a. SBA received two comments 

regarding paragraph (a)(1) stating that 

this paragraph vests broad authority to 

terminate and contradicts guidance in 

the renewal application section and that 

this is concerning as it gives the Agency 

authority to terminate without cause. 

SBA Response: SBA accepts these 

comments and is removing this 

paragraph. Further, the SBA 

acknowledges that the causes for 

termination are outlined in 2 CFR 

200.340. 

b. SBA received three comments 

regarding revised paragraph (b) stating 

that this paragraph does not accurately 

reflect the accreditation process. The 

recommendations are for continuous 

improvement of the program and are at 

the discretion of the Lead Center to act 

upon. 

SBA Response: SBA accepts the 

comments and is replacing the word 

‘‘recommendations’’ with the word 

‘‘conditions.’’ 

Comments Opposed to § 130.800— 

Oversight of the SBDC Program 

SBA received one comment regarding 

new paragraph (c) regarding a change in 

the SBA primary contact and 

notification of the recipient 

organization. The commenter is 

questioning why this included in the 

regulations and if it is final. 

SBA Response: SBA rejects this 

comment and believes that it is 

necessary to keep this paragraph for 

notification purposes. 

Comments Opposing § 130.810—SBA 

Review Authority 

SBA received one comment regarding 

paragraph (a), Site visits. The 

commenter states that this paragraph is 

repeating what is already stated in 2 

CFR part 200. 

SBA Response: SBA is rejecting this 

comment. SBA believes that more 

information is needed to provide to the 

recipient organization regarding site 

visits. Additionally, section 21 (k)(2) of 

the Small Business Act states that the 

Administration will develop and 

implement a biennial programmatic and 

financial examination of each small 

business development center 

established pursuant to this section. 

Comments Opposed to § 130.820— 

Records and Recordkeeping 

SBA received four comments stating 

that annual physical site visits are not 

necessary to conduct required 

subrecipient monitoring. Lead centers 

should be allowed flexibility in 

determining whether a physical or 

virtual visit will meet the needs of its 

required subrecipient monitoring. In 

cases where there have been no changes 

in leadership at the subrecipient and no 

problems exist, a virtual visit may 

suffice. Further, the comments state that 

this appears to unnecessarily restrict the 

method (in-person vs virtual) by which 

centers are reviewed and it is in 

contradiction to any risk-based 

approach that a Lead Center may 

deploy. 

SBA Response: SBA accepts the 

comments. However, SBA revised 

paragraph (a)(2)(ii) to include: (1) that a 

physical on-site visit must be conducted 

at least once every four years by the 

recipient organization; (2) or when SBA 

deems it necessary, such as, when there 

is a change in leadership, either at the 

Service Center or the Lead Center, or the 

SBA has or receives concerns regarding 

a Service Center. 

Comments Opposed to § 130.825— 

Reports 

a. SBA received two comments on 

new paragraph (b)(3) requesting that 

SBA provide a timeline for delivering 

final reports in the regulations rather 

than referring to the NOFO. 

SBA Response: SBA rejects this 

comment as the dates and times may 

change. Additionally, the Agency 

should have the flexibility to do this in 

the NOFO. 

b. SBA received two comments 

regarding newly revised paragraph (d) 

stating that including specific reporting 

formats in the regulations limits ongoing 

improvements to narrative reporting and 

that simplified reporting may make the 

content more useful for the Agency. 

SBA Response: SBA accepts the 

comments and revises paragraph (b) to 

add an introductory sentence which 

states, ‘‘Performance reports must 

include the data specified below, along 

with any other information the SBDC 

feels may be relevant to a full appraisal 

of its performance.’’ 

c. SBA received one comment on 

newly revised paragraph (e) stating that 

this paragraph does not vest any new 

authority within the Agency nor does it 

further the Agency’s stated goal of 

providing more specific and clear 

instructions. The Uniform Guidance 

provides for a certification statement to 

be included. This is redundant to 

existing guidance provided by the 

Uniform Guidance. 

SBA Response: SBA accepts that 

comments and deleted this paragraph. 

Comments Opposed to § 130.830— 

Audits and Investigations 

SBA received one comment stating 

that this section does not vest any new 

authority within the Agency nor does 

further the Agency’s stated goal of 

providing more specific and clear 

instructions. 

SBA Response: SBA accepts this 

comment and revises this section to 

reference 2 CFR part 200. 

g. Section-By-Section Analysis 

Section 130.100—Introduction 

SBA proposed to add a paragraph 

providing a broad overview of the 

Program and purpose. SBA believes that 

this will provide clarity. SBA did not 

receive any comments on this section 

and is moving forward with the 

paragraph as proposed. 

Section 130.110—Definitions 

This section proposed adding 23 new 

definitions to clarify and codify current 

District Office responsibilities, State/ 

Lead Center Director responsibilities, 

and define other terms already in use in 

the notice of funding opportunity. If the 

revised or new definition is not listed 

below, SBA did not receive any 


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comments for them and moves forward 

with those definitions as proposed. 

a. Due to the comments received, SBA 

revised the definition of accreditation 

process that reflects the commenters 

suggestions and current use of the term. 

The new definition states that it’s the 

process by which evaluation and 

assessment occurs to assist an SBDC 

with assessing its processes and 

outlining areas needing improvement by 

providing recommendations to 

strengthen delivery of services and 

assistance. 

b. Due to comments received, SBA 

revised the definition of application to 

include the term ‘‘renewal application.’’ 

c. After reviewing the comments, SBA 

will not change the definition of cash 

match. As defined in 2 CFR part 200, 

waived indirect cost is the difference 

between the total amount of indirect 

costs charged to a Federal award and the 

total amount of indirect costs that could 

have been charged to a Federal award. 

The regulation at 2 CFR part 200 refers 

to this as unrecovered indirect costs. 

d. SBA took the comments under 

consideration and revised the definition 

of clearinghouse to define the term more 

clearly and accurately as requested by 

the commenters. The definition now 

states that the clearinghouse is a source 

of market and industry information 

made available to all SBDC networks to 

assist clients and supports the exchange 

of information between SBDCs. 

e. SBA took the comments submitted 

under consideration and revised the 

definition of client to include the word 

‘‘nascent’’ before the word 

‘‘entrepreneur.’’ 

f. SBA accepts the comments 

submitted and refers the reader to the 

definition of program income as defined 

in 2 CFR part 200. 

g. After some consideration, SBA 

agrees with the commenters and revised 

the definition of SBDC Director to state 

that at least 75 percent of the 

individual’s time and effort is allocated 

to the SBDC grant. 

h. SBA agrees with the comments 

submitted and deleted the words 

‘‘hiring outside consultants for a client’’ 

from the definition. 

Section 130.200—Eligible Entities 

As required in the Small Business 

Act, 15 U.S.C. 656 and 648(a)(1), this 

section adds a Women’s Business Center 

operating pursuant to section 29 of the 

Small Business Act as an entity eligible 

to apply to be a Lead Center SBDC. This 

section also proposed to add eligibility 

criteria for the Commonwealth of the 

Northern Mariana Islands. SBA is 

unable to change this requirement, as 

the Small Business Act, 15 U.S.C. 656 

and 648(a)(1) states, in part, that after 

December 31, 1990, the Administration 

shall not make a grant to any applicant 

other than an institution of higher 

education or a women’s business center 

operating pursuant to section 656 of the 

title as a Small Business Development 

Center unless the applicant was 

receiving a grant (including a contract or 

cooperative agreement) on such date. 

The previous sentence shall not apply to 

an applicant that has its principal office 

located in the Commonwealth of the 

Northern Mariana Islands. 

Section 130.300—Small Business 

Development Centers (SBDCs) 

This section codifies the statutory 

authority for the Administrator to 

operate and administer the SBDC 

Program through cooperative 

agreements issued to recipient 

organizations, as established under the 

Small Business Act. SBA did not receive 

any comments on this section and is 

moving forward with the rule as 

proposed. 

Section 130.310—Area of Service 

This section requires service centers 

to be primarily housed within 

institutions of higher education or a 

Women’s Business Center operating 

pursuant to section 29 of the Small 

Business Act, under paragraph (c). SBA 

is revising the paragraph to provide that 

for any applicant commencing after 

January 1, 1992, the recipient 

organization must ensure that any new 

SBDC service centers established within 

its area of service, to the extent 

practicable, are primarily housed within 

institutions of higher education or a 

WBC, operating pursuant to section 29 

of the Small Business Act (15 U.S.C. 

656) as stated in section 21(a)(1) of the 

Small Business Act (15 U.S.C. 

648(a)(1)). 

Section 130.320—Operating 

Requirements 

This section adds five requirements 

already in use in the notice of funding 

opportunity as paragraphs (d) through 

(g) of the section to standardize SBDC 

naming/branding nationwide and 

enhance the current conflict of interest 

policy as follows: 

• The name of the Lead SBDC must 

contain the official identification of 

‘‘Small Business Development Center’’ 

and that, unless waived by the AA/ 

SBDC, the SBDC has one year from the 

date of promulgation to make any 

necessary changes. 

• Any entity operating as an SBDC 

service center, whether receiving 

Federal funding or not, is now 

considered a part of the recipient 

organization’s network and is required 

to report its goals, achievements, etc. as 

any other service center. 

• The process to obtain the minimum 

number of required staff members for 

international trade assistance as 

required by the Act. 

• The requirement for every SBDC to 

annually sign the conflict-of-interest 

form and to have a policy, which 

addresses how the recipient 

organization will deal with competing 

and conflicting issues. 

a. SBA accepts a comment and revises 

the paragraph (a) to delete the reference 

to ‘‘full-time.’’ 

b. SBA accepts the comments 

regarding new paragraph (e) stating that 

this is new and revises the paragraph to 

narrow the scope of the requirement to 

read as follows: ‘‘Any entity that is 

using the term ‘Small Business 

Development Center’ and under contract 

with the Lead Center and receiving 

program funds, whether . . .’’ and at the 

end of the paragraph will replace the 

word ‘‘entity’’ with the words ‘‘Service 

Center.’’ 

c. SBA deleted paragraph (f) since the 

new accreditation standards no longer 

address the technology designation. 

Section 130.330—SBDC Services and 

Restrictions on Services 

SBA provides an overview of the 

services that an SBDC must provide to 

prospective entrepreneurs and existing 

small businesses and the related 

reporting requirements. Further, 

SBA requires the SBDC network to 

collaborate with other state and local 

government programs providing 

assistance to small businesses and 

potential small business. This change 

will provide clarity and transparency to 

the regulations and is consistent with 

the notice of funding opportunity. 

a. SBA accepts the comments and 

revised paragraph (a) to include, ‘‘to the 

extent practicable.’’ 

b. SBA agrees with the comment 

received and deleted § 130.330(b)(4). 

The remaining paragraphs are 

redesignated from paragraphs (b)(5) and 

(6) to paragraphs (b)(4) and (5) in this 

final rule. 

c. SBA addresses a comment on 

newly revised § 130.330(b)(3) and agrees 

that an SBDC counselor should not act 

as an agent for the client. SBA inserted 

after ‘‘however’’ ‘‘SBDCs may not attest 

to a client’s readiness or 

creditworthiness to the lending 

institution either verbally or in writing’’. 

Further SBA deleted ‘‘neither SBDC 

staff nor their agents may take a direct 

or indirect role in representing clients in 

loan negotiations.’’ 


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d. SBA revised the language in 

§ 130.330(b)(5) (now § 130.330(b)(4)) to 

state ‘‘SBDCs may participate on boards 

and panels of financial institutions and 

with outside organizations but may not 

be involved in any final credit decisions 

involving SBDC clients or in making or 

servicing loans.’’ 

e. SBA revises the language in 

§ 130.330(b)(6) (now § 133.330(b)(5)) to 

include ‘‘. . . but may not advocate for, 

promote, recommend approval. . .’’ to 

the paragraph. 

f. SBA revises § 130.340(c) to not 

include specific focus areas in the 

regulations as they could change and 

revised the language in the regulation to 

reflect this change. The focus areas will 

be included in the NOFO each year. 

Section 130.340—Specific Program 

Responsibilities 

This section clarifies the 

responsibilities of the AA/SBDC and the 

SBDC Lead Center Director (Lead Center 

Director). Currently, this section refers 

to SBA as the entity making decisions 

or determinations. The final rule 

distinguishes between AA/SBDC and 

the District Director to provide for more 

transparent identification of roles and 

responsibilities for the public. SBA 

revises the language in new 

§ 130.340(c)(5) to state that service 

centers should provide access to 

training. 

Section 130.350—SBDC Advisory 

Boards 

This section would replace the words 

‘‘shall’’ and ‘‘may’’ with ‘‘must’’ and 

‘‘will’’ and imposes term limits and 

language to provide guidance to the 

boards, consistent with the cooperative 

agreement. 

a. After reviewing comments 

submitted from the public, SBA will no 

longer revise § 130.350(a)(3). 

b. SBA revised § 130.350(a)(6) stating 

that the Board members can pay for 

their own costs if they choose to do so. 

Section 130.360—Selection of the SBDC 

Lead Center Director 

This section codifies the current 

selection process, for SBDC Lead Center 

Director utilized by SBDCs. SBA did not 

receive any comments on this section 

and is moving forward with the rule as 

proposed. 

Section 130.370—Contracts With Other 

Federal Agencies 

This section codifies the requirements 

process for an SBDC to enter a contract 

with another Federal agency and adds 

language to the end of the paragraph 

with a five-business day response 

timeframe for SBA. 

Section 130.380—Client Privacy 

Section 21(a)(7) of the Act requires 

SBDCs and the Administration to 

protect the privacy of any individual or 

small business receiving assistance in 

the Program. Under this final rule, an 

SBDC, including its contractors and 

other agents, would not be permitted to 

disclose to an entity outside the 

individual SBDC, the name, address, 

email address, or telephone number, 

referred to as ‘‘client contact data’’ of 

any individual or small business 

without the consent of such individual 

or small business, unless such 

disclosure meets on the three exceptions 

discussed below. 

The three exceptions, as authorized 

by the Act, would permit disclosure if: 

(1) A court orders the Administrator to 

disclose the information in any civil or 

criminal enforcement action initiated by 

a Federal or state agency; or (2) the 

Administrator considers such a 

disclosure to be necessary for the 

purpose of conducting a financial audit 

of a center, not including those required 

under § 130.830, as determined on a 

case-by-case basis when formal requests 

are made by a Federal or state agency. 

Such formal requests must justify and 

document the need for individual client 

contact and/or Program activity data to 

the satisfaction of the Administrator; or 

(3) SBA requires client contact data to 

directly survey SBDC clients. 

This rule would require SBDCs to 

provide an opportunity for clients to opt 

in to allow SBA to obtain their contact 

data. SBA’s use of client contact data 

would be restricted only to conduct 

survey and studies that help 

stakeholders better understand how the 

services the client received affect their 

business outcomes over time. These 

surveys or studies would include, but 

are not limited to, program evaluation 

and performance management studies. 

Under this final rule, the Agency 

would not allow use of client contact 

data for any other purpose beyond 

program surveys or studies. 

This final rule prohibits the denial of 

services to clients solely based on a 

client’s refusal to provide consent to use 

their contact data for study purposes. 

Section 21(a)(7)(C) of the Act directs 

the Agency to publish standards for 

requiring disclosures of client 

information during a financial audit. 

Other Federal or state agencies making 

such disclosure requests are required to 

submit formal requests, in writing, 

including a justification for the need for 

individual client contact and/or 

Program activity data for the 

Administrator’s review on a case-bycase basis. 

This final rule codifies the current 

privacy protections in place in the 

Program employed by the Agency. Any 

reports on the Program produced by an 

SBDC, including its contractors and 

other agents, and the Agency, could not 

disclose individual client information 

without consent from the client. Any 

such reports could only report activity 

data in the aggregate, unless given 

consent, to protect the individual 

privacy of clients. 

SBA believes that the language in the 

regulation does not compromise the 

intent of the privacy guidelines 

currently in place. The language states 

that the 641 has an opt-in clause for 

clients. Clients do not have to provide 

their information on the form. 

Section 130.400—Application 

Procedure 

Currently, this section is not used. 

This section requires all SBDC 

applicants to comply with the current 

annual notice of funding opportunity 

procedures for their new or renewal 

applications to receive consideration. 

This final rule reinforces that an SBDC 

applicant must follow procedures for 

submitting a new or renewal 

application, and to clarify the 

application procedures. SBA did not 

receive any comments on this section 

and is moving forward with the rule as 

proposed. 

Section 130.410—New Applications 

Currently, this section outlines 

outdated procedures that are no longer 

enforced. This final rule codifies the 

current new application procedures 

utilized by SBDCs, which require 

applicants to be located in the same 

state/region where the SBDC is located. 

This section also codifies new 

recruitment and selection procedures 

for new recipient organizations. As a 

result of submitted comments, SBA will 

remove the word ‘‘region’’ from the 

§ 130.410(b). 

Section 130.420—Renewal Applications 

Currently, this section outlines 

outdated procedures that are no longer 

enforced. This final rule revises the 

existing renewal and nonrenewal 

process to reflect the process currently 

utilized by SBDCs. Factors of 

consideration in the renewal application 

under paragraph (c) are expanded to 

include corrective measures 

implemented as a result of examinations 

conducted; and the accreditation 

provision of § 130.810(c), including any 

conditions from the accreditation report, 

and corrective measures implemented, 

affecting the recipient organization and 

the SBDC network. 


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SBA added language to § 130.420(c)(2) 

which incorporates client satisfaction 

rates as a deciding factor. 

Additionally, SBA revised 

§ 130.420(c)(5) citing the current 

accreditation report, rather than 

recommendations. 

Section 130.430—Application Decisions 

This final rule clarifies and makes 

transparent the existing approval 

process of an application by outlining 

the options to grant approval, 

conditional approval, or denial of an 

application. SBA did not receive any 

comments on this section and is moving 

forward with the rule as proposed. 

Section 130.440—Maximum Grant 

This final rule codifies the limitations 

on grant funding set forth in section 

21(a)(6)(C) of the Act and the exceptions 

set forth under paragraph (b). The 

legislative language was revised in this 

codification to be clear and transparent. 

SBA did not receive any comments on 

this section and is moving forward with 

the rule as proposed. 

Section 130.450—Matching Funds 

This final rule expands and clarifies 

the requirements on matching funds for 

cash, in-kind, or authorized indirect 

funds so that it is clearer and more 

transparent. 

As a result of comments received, 

SBA revised the language § 130.450(a) to 

state that cash match must be equal to 

or greater than 50 percent of the SBA 

funds used by the SBDC. 

Further, because of comments 

received, SBA revises § 130.450(b) by 

adding that only the additional 

requirements from SBA will need to be 

identified. 

Under this final rule, paragraph (c) is 

added to clarify matching requirements 

for insular territories. 

Paragraph (d) codifies the requirement 

for all applicants to submit a 

certification of cash match and program 

income, currently required by the notice 

of funding opportunity. 

Paragraph (e) requires all matching 

funds, in addition to the Federal and 

program income funds, to be under the 

direct management of the SBDC State/ 

Region Director. As a result of 

comments received, SBA adds the 

following sentence to § 130.450(e) for 

clarity: ‘‘If in-kind contributions are 

utilized by the SBDC, the State Director 

or an SBDC Service Center Director is 

then considered to be in control of those 

contributions.’’ 

Paragraph (g) expands the list of 

unallowable sources of matching funds 

and as a result of comments received to 

the proposed rule, SBA revises the 

language in § 130.450(g) to include 

language that defines overmatching 

expenditures as those that are derived 

from eligible matching sources; are 

reasonable, allowable, and allocable to 

the SBDC program; are over and above 

the minimum match required to the 

Federal expenditures; and are included 

on the required SBDC financial 

reporting to SBA for the project period. 

Section 130.460—Budget Justification 

This section codifies current budget 

justification procedures used by SBDCs, 

as required by the notice of funding 

opportunity. In accordance with 2 CFR 

part 200, the SBDC is required to have 

the prior approval from the Agency for 

the purchase of equipment, either 

through a specific disclosure in an 

annual cost proposal or through an 

approved amendment to an existing 

cooperative agreement. 

This final rule outlines procedures for 

foreign travel requests. Specifically, all 

foreign travel requests are required to be 

submitted to the appropriate District 

Director and the Office of Small 

Business Development Centers 

(OSBDCs) Program Manager for review 

and then to the AA/SBDC for final 

approval. 

Paragraph (i) is revised to allow dues 

to the recognized organization to be 

charged to the cooperative agreement. 

As a result of comments received, 

SBA deleted proposed § 130.460(f). 

As a result of the comments received 

on proposed § 130.460(g) (now 

§ 130.460(f)) SBA revised the language 

by deleting the reference to the salary 

but keeping the rank in the organization. 

SBA received two comments on 

proposed § 130.460(i) (now 

§ 130.460(h)) regarding travel stating 

that this entire section is covered by the 

omni-circular. However, SBA will keep 

this paragraph as stated in the proposed 

rule because it includes details and 

information not found in 2 CFR part 

200. 

As a result of comments received, 

SBA deleted proposed § 130.460(i)(2). 

Proposed paragraph (i) was redesignated 

as paragraph (h) in this rule, so 

proposed paragraphs (i)(3) through (5) 

are redesignated as paragraphs (h)(2) 

through (4). 

As a result of comments received, 

SBA deleted proposed § 130.460(j). 

Section 130.465—Restricted and 

Prohibited Costs 

Under this final rule, this new section 

prohibits the use of Federal funds, 

matching funds and program income as 

required under the cooperative 

agreement for the purposes identified as 

unallowable in applicable sections of 2 

CFR part 200. Currently regulations do 

not restrict the use of these above cited 

funds. These changes, in accordance 

with 2 CFR part 200, ensure that 

program funds are not used by recipient 

organizations for the purpose of subgrants, or as seed money for venture 

capital, or for other purposes outside the 

scope of authorized SBDC activities. 

SBA did not receive any comments on 

this section and is moving forward with 

the rule as proposed. 

Section 130.470—Fees 

This section prohibits SBDC network 

entities, staff, consultants, or volunteers 

to solicit or accept fees or other 

compensation for counseling services, 

including, but not limited to, business 

or marketing plan development, loan 

packaging or credit application 

assistance, or other advisory services 

described in the Act. SBA adds a second 

paragraph to codify, clarify and make 

more transparent the intent of the 

section. SBA did not receive any 

comments on this section and is moving 

forward with the rule as proposed. 

Section 130.480—Program Income 

This section codifies the existing 

requirement that SBDCs may not report 

program income as a matching resource. 

Additionally, unused program income is 

permitted to be carried over to the 

subsequent budget period by the SBDC 

network; however, the aggregate amount 

of network program income cannot 

exceed 25 percent of the total SBDC 

budget (Federal and matching 

expenditures). The intent of the section 

remains the same; however, it is revised 

to make it clearer and more transparent. 

Based upon comments received, SBA 

will not revise or change paragraph (b) 

regarding the use of program income 

based on the Small Business Act section 

21(a)(4)(A) which requires the recipient 

to match 100 percent Federal grant 

funding not less than 50 percent cash 

and not more than 50 percent of indirect 

costs and in-kind contributions. SBA 

interprets this paragraph to mean that 

program income, which are fees 

collected from recipients of assistance, 

is excluded to be used as matching 

funds. Further, SBA requests the 

sources of match to ensure that the 

NFE’s cost sharing and matching are not 

paid by the Federal Government under 

another Federal award or by other 

Federal sources. Additionally, forms 

submitted to the SBA require the NFE 

to provide the source of the matching 

funds. If the funding sources are not 

provided to the SBA, SBA could 

unknowingly approve an award with 

unallowable sources of matching funds. 

However, SBA deleted new paragraph 


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(e) regarding program income and SBDC 

sponsored activities based upon 

comments received. 

Section 130.490—Property Standard 

The proposed rule created a new 

section to require the SBDCs to adopt 

and implement the respective Office of 

Management and Budget (OMB) 

guidelines for property standards. SBA 

received one comment opposing this 

section as it repeats guidelines outlined 

in 2 CFR part 200. Based upon the 

comment received, SBA deleted this 

section from the final rule. 

Section 130.500—Advances and 

Reimbursements. 

Current regulations outline the 

process for SBDC submission of 

reimbursement requests and 

advancements. Based upon comments 

received, SBA will delete this section. 

Section 130.600—Cooperative 

Agreement 

Currently, this section is not used. 

This section codifies program 

requirements currently enforced 

through the notice of funding 

opportunity and followed by the SBDCs. 

Under this final rule, paragraph (a) 

requires a recipient organization to 

incorporate the cooperative agreement 

into its SBDC sub-agreements and 

contracts, which is already being done 

by the SBDCs. 

As a result of comments, paragraph 

(b) now states that SBA reserves the 

right to disapprove any sub-agreement 

entered into the by recipient 

organization with SBDC service center 

organizations, vendors, or contractors. 

Paragraph (c) outlines procedures for 

developing performance goals and 

measurements, negotiating the goals and 

measurements, and consequences of not 

meeting those goals and measurements. 

Also, SBA loan goals are not negotiated 

or incorporated into the cooperative 

agreement without the written approval 

of the AA/SBDC. 

As a result of comments submitted, 

paragraph (d) is deleted. 

Section 130.610—Grant Administration 

and Cost Principles 

As a result of comments received, 

SBA will delete both the last sentence 

in the current paragraph and newly 

designated paragraphs (b) and (c). 

Section 130.620—Revisions and 

Amendment to Cooperative Agreements 

This section revises paragraph (a) by 

outlining required prior approval 

requests by SBDCs for revisions to the 

cooperative agreement. However, due to 

comments received, SBA will delete 

paragraph (a)(2). Additionally, due to 

comments received, SBA revised 

paragraph (a)(3) to add the following 

language, ‘‘If supplemental funds are 

available for distribution, SBA will 

publish a notice of funding opportunity 

in consultation with the Recognized 

Organization.’’ 

SBA will also add new paragraph (b) 

for clarity and transparency. As is 

current practice, paragraph (b) would 

authorize the AA/SBDC to amend one or 

more cooperative agreements to 

authorize unanticipated out-of-state 

travel by SBDC personnel responding to 

a need for services in a Presidentially 

Declared Major Disaster Area and to 

address how travel costs are to be 

handled. Paragraph (b) authorizes SBA 

to provide financial assistance to 

SBDCs, or any proposed consortium of 

such individuals or entities, to spur 

disaster recovery and growth of small 

business concerns located in an area for 

which the President or SBA 

Administrator has declared a major 

disaster. 

Due to comments received, SBA 

added the following language at the 

beginning of paragraph (b)(1), ‘‘In 

consultation with the Recognized 

Organization . . .’’ 

Section 130.630—Dispute Resolution 

Procedures 

This section clarifies the existing 

procedures for a financial dispute or a 

programmatic or nonfinancial dispute 

for clarity and transparency. The intent 

of this section remains the same. As a 

result of comments received, SBA 

replaces the District Office reference 

with the Grants Management Officer. 

Section 130.700—Suspension, 

Termination, and Non-Renewal 

This section revises and clarifies the 

procedures for suspension, termination 

or non-renewal for clarity and 

transparency. 

Proposed paragraph (a)(1) is deleted 

in this final rule due to comments 

received and SBA acknowledges that 

the causes for termination are outlined 

in 2 CFR 200.340. Proposed paragraph 

(a)(2) (now paragraph (a)(1)) allows the 

recipient organization to continue to 

conduct project activities and incur 

allowable expenses until the end of the 

current budget period in instances when 

the SBA has elected to not to renew a 

cooperative agreement. Under this final 

rule, if a recipient organization does not 

seek to renew the grant, it must notify 

the District Office and send a letter of 

intent to withdraw to the AA/SBDC. 

Paragraph (a)(2) of this final rule 

(proposed paragraph (a)(3)) adds the 

sentence, ‘‘A decision to suspend a 

cooperative agreement is effective 

immediately.’’ Additionally, the notice 

of suspension recommends that the 

recipient organization cease work on the 

project immediately and places SBA 

under no obligation to reimburse any 

expenses incurred by a recipient 

organization while it is under 

suspension. 

Under this final rule, paragraphs 

(b)(11) through (15) would be added for 

clarity and transparency on the causes 

for termination or suspension. 

Currently, the administrative 

procedures for suspension, termination, 

and non-renewal are found in the 

cooperative agreement. Under this final 

rule, the new administrative procedures 

are outlined under paragraph (c) as well 

as the responsibilities of the AA/SBDC 

in these circumstances. 

Under this final rule, paragraph (d) is 

added to outline the administrative 

review of suspension, termination, and 

non-renewal actions as well as the 

required process for SBDCs to submit 

the request for administrative review. 

Further, due to comments received on 

the proposed rule, SBA is revising 

paragraph (d) by replacing the word 

‘‘recommendations’’ with the word 

‘‘conditions.’’ 

Section 130.800—Oversight of the SBDC 

Program 

This section is revised to clarify the 

existing broad language used to outline 

program oversight requirements by 

adding three new paragraphs. SBA 

received one comment concerning new 

paragraph (c) regarding a change in the 

SBA primary contact and notification of 

the recipient organization. The 

commenter is questioning why this 

included in the regulations and if it is 

final. SBA is not changing this 

paragraph and believes that it is 

necessary to keep this paragraph for 

notification purposes. 

Section 130.810—SBA Review 

Authority 

This final rule revises paragraph (c) to 

reiterate 15 U.S.C. 648(k)(2) of the Small 

Business Act and to state that SBA may 

not renew or extend any cooperative 

agreement with an SBDC unless the 

center has been approved under the 

accreditation program, except that the 

AA/SBDC may waive such accreditation 

requirement, at their discretion, upon 

showing that the center is making a 

good faith effort to obtain accreditation. 

This section clarifies and provides more 

detail on the review authority provided 

to SBA regarding the SBDC Program. 

SBA received one comment regarding 

paragraph (a) (Site visits). However, 

SBA is keeping the paragraph in this 


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final rule as the SBA believes that more 

information is needed to provide to the 

recipient organization regarding site 

visits. Section 21(k)(2) of the Small 

Business Act states that the 

Administration will develop and 

implement a biennial programmatic and 

financial examination of each small 

business development center 

established pursuant to this section. 

Section 130.820—Records and 

Recordkeeping 

This final rule revises the existing 

broad instructions on records and 

recordkeeping requirements for an 

SBDC to provide clarity and 

transparency. The revisions include 

more narrow instructions to clarify each 

required step in the current process. 

SBA received four comments stating 

that annual physical site visits are not 

necessary to conduct required 

subrecipient monitoring. Lead centers 

should be allowed flexibility in 

determining whether a physical or 

virtual visit will meet the needs of its 

required subrecipient monitoring. In 

cases where there have been no changes 

in leadership at the subrecipient and no 

problems exist, a virtual visit may 

suffice. Further, the comments state that 

this appears to unnecessarily restrict the 

method (in-person vs virtual) by which 

centers are reviewed and it is in 

contradiction to any risk-based 

approach that a Lead Center may 

deploy. 

SBA Response: SBA accepts these 

comments and revises the paragraph to 

state that the Lead Center must annually 

conduct monitoring of its Service 

Centers either in-person or virtually. 

Moreover, a physical on-site visit must 

be conducted at least once every four 

years by the recipient organization; or 

when SBA deems it necessary, such as, 

when there is a change in leadership, 

either at the Service Center or the Lead 

Center, or the SBA has or receives 

concerns regarding a Service Center. 

Section 130.825—Reports 

This final rule requires SBDCs to 

submit performance and financial 

reports to SBA for review, as currently 

required by the notice of funding 

opportunity. The proposed revisions 

outline the frequency of the reporting, 

electronic data reporting which includes 

counseling and training records, and 

specific details for each of the 

performance reports and financial 

reports. SBA is not changing paragraph 

(b)(3) as the dates and times may change 

and the Agency should have the 

flexibility to do put the dates and times 

in the NOFO. 

Due to comments received on the 

proposed rule, SBA revises paragraph 

(d) in this final rule to add an 

introductory sentence which states, 

‘‘Performance reports must include the 

data specified below, along with any 

other information the SBDC feels may 

be relevant to a full appraisal of its 

performance.’’ 

Further, SBA deletes paragraph (e) 

due to comments received on the 

proposed rule. 

Section 130.830—Audits and 

Investigations 

Current regulations provide general 

but outdated, compliance instructions to 

the SBDCs regarding audits and 

investigations performed by SBA’s 

Office of Inspector General. This section 

would be updated and revised with 

more specific and clear instructions. 

However, due to comments received on 

this proposed section, SBA refers to 2 

CFR part 200. 

Section 130.840—Closeout Procedures 

Current regulations do not include 

closeout procedures; rather, these are 

found in the cooperative agreement. 

Under this final rule, this new section 

outlines closeout procedures for the 

recipient organization to ensure that 

program funds and property acquired or 

developed under the SBDC cooperative 

agreement are fully reconciled and 

transferred seamlessly between 

recipient organizations, service centers, 

or other Federal programs. SBA did not 

receive any comments on this section 

and is moving forward with the rule as 

proposed. 

Compliance With Executive Orders 

12866, 12988, 13132, and 13563, the 

Paperwork Reduction Act (44 U.S.C. Ch. 

35), the Congressional Review Act (5 

U.S.C. 801–808), and the Regulatory 

Flexibility Act (5 U.S.C. 601–612) 

Executive Order 12866 

The Office of Management and Budget 

(OMB) has determined that this rule is 

a ‘‘significant’’ regulatory action for the 

purposes of Executive Order (E.O.) 

12866. Accordingly, the next section 

contains SBA’s Regulatory Impact 

Analysis. 

Regulatory Impact Analysis 

1. Is there a need for this regulatory 

action? 

The SBDC rules were last revised in 

1995 (see 60 FR 31504) (June 13, 1995). 

However, the statute authorizing the 

SBDC Program has been amended 

numerous times since the last 

rulemaking (for a full listing of 

amending legislation, see the history 

notes at 15 U.S.C. 648). For example, 

SBA updates the regulation as required 

by section 21(a)(7) of the Small Business 

Act to protect the privacy of any 

individual or small business receiving 

assistance in the Program. 

SBA believes it is now necessary to 

revise the regulations to outline current 

policies and procedures for the SBDC 

Program for consistency. This regulation 

also incorporates the changes required 

by the 2 CFR part 200 and other grant 

changes that have taken place over the 

last 25 years. Additionally, the 

America’s Small Business Development 

Centers (ASBDC), the recognized 

association as established in section 

21(a)(3)(A), has requested changes that 

are consistent with the revisions made 

in the notice of funding opportunity and 

cooperative agreement. Furthermore, the 

SBA received 133 comments to the 

ANPRM that was published on April 2, 

2015, some of which are incorporated in 

this rule. 

In the absence of this rule, there are 

discrepancies between the regulations 

and Program governing documents, 

including the notice of funding 

opportunity and the cooperative 

agreement. Currently, SBA and the 

SBDCs reference three or more 

documents to find guidance on the 

Program, and the annual notice of 

funding opportunity and cooperative 

agreement have become, for all practical 

purposes, documents which interpret 

the statute. Also, SBA has limited 

authority to hold SBDCs accountable for 

low or non-performance. While low or 

non-performance is a rare occurrence, 

SBA’s only current recourse is to write 

conditions into the SBDC notice of 

award. The rule strengthens SBA’s 

oversight and accountability, as 

intended by Congress, and reduces 

burden by consolidating programmatic 

guidance to one document. 

2. What are the potential benefits and 

costs of this regulatory action? 

The benefits of this rule are based on 

incorporating all the changes that have 

been made with the publication of 2 

CFR part 200, other grant changes over 

the past 20 years, and a streamlining of 

both the notice of funding opportunity 

and the cooperative agreement. 

Specifically, the rule provides guidance 

on: 

• The determination of the official 

name of the SBDC. 

• Directing minimum reporting for, 

and hiring of, State Directors. 

• Applying for other grants/other 

sources of funds. 

• Clarifying Project Officer 

responsibilities. 


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• Clarifying matching funds, such as 

in-kind funds, funding expenditures, 

and eligible entities budget justification. 

• The collection and use of 

individual SBDC client data. 

• Adding new sections regarding 

suspension, termination, and nonrenewal, payments and reimbursements, 

property standards, confidential 

information—among others. 

The new regulations will simplify and 

streamline notice of funding 

opportunity language to contain only 

that information that the applicant 

organization must submit and not all the 

other information that will now be 

written into the regulations. Moreover, 

having the regulations in one document 

would make administering the Program 

by the SBDCs much easier by not having 

to reference three or more different 

documents. The estimated reduction in 

burden hours to this consolidation is 

presented in the table below: 

TABLE 1—ESTIMATE OF SAVINGS TO SBDCS

Outcomes 

Number of 

expected 

occurrence 

per year 

Average time or money saved 

per occurrence 

Total annual 

savings 

(A) (B) (A × B) 

Provision of better information leading to better choices ........ 63 SBDCs ......... 4 hours at $120.22 1/hr = 

$480.88.

252 hours; $30,295.44. 

Increased efficiency from clarity and agreement with other 

related documents.

63 SBDCs ......... 2 hours at $120.22 1/hr = 

$240.44.

126 hours; $15,147.72. 

Total Savings .................................................................... ........................... ................................................ 378 hours; $45,443.16. 

1Based on the most recently available data, from 2019 Salary Survey of America’s SBDC, hourly wage of a State Director ($60.11) plus 100% 

for benefits. Salary Survey (americassbdc.org), p. 3. 

There are currently 63 SBDCs that 

benefit from this new regulation. We 

estimate the changes to the rule will 

create a four-hour benefit per SBDC 

from better information leading to better 

SBDC choices because the revisions will 

clarify definitions and provide guidance 

on various issues. We estimate a twohour increase in efficiency per SBDC 

due to the clarity that the revisions to 

the rule will provide because the rule 

will align with the notice of funding 

opportunity and the cooperative 

agreement. Using the average hourly 

wage of an SBDC State Director, the 

total annual benefit of these revisions 

comes to $45,443.16 for all the 63 

SBDCs. We anticipate that these benefits 

will be realized over perpetuity in that 

SBDCs will continue to experience 

better decision-making from the 

clarification and additional guidance 

provided and increased efficiency from 

only having to reference one document. 

There are also several benefits that 

cannot be quantified. One of these 

benefits is the increased security that 

the rule provides SBDCs through its 

requirements to protect the privacy of 

an individual or small business 

receiving assistance in the Program. 

Another benefit to revising and 

updating the regulations is that it would 

give SBA more authority to enforce the 

requirements as written in the 

regulations which is something 

currently lacking in the Program. 

There are some costs incurred by the 

SBDCs in initially reading and 

interpreting the new regulation. There is 

an additional requirement for 

application procedures which currently 

only exists in the notice of funding 

opportunity. We estimate that this will 

add approximately two hours of burden 

for SBDCs. The SBDCs also must 

provide a certification of cash match 

and program income for which a 

requirement currently exists only in the 

notice of funding opportunity. 

Additionally, the rule would require 

SBDCs to submit performance and 

financial reports to SBA for review, as 

currently required by the notice of 

funding opportunity. These 

requirements are reflected in the most 

recent Information Collection Requests 

for the reporting requirements for 

SBDCs, so while reflected here, these 

requirements do not change the 

Paperwork Reduction Act cost burden. 

SBA staff must review these reporting 

requirements which we estimate will 

take SBA staff 30 minutes twice a year 

to review. These costs are summarized 

below: 

TABLE 2—ESTIMATE OF COSTS TO SBDCS/SBA 

Amount of 

time required 

hours 

Value of time Frequency 

per year 

Number of 

businesses or 

individuals affected 

Total annual cost 

(A) (B) (C) (D) (A × B × C × D) 

Read and interpret the regulation .................. 2 $120.22 1/hr ...... 1 63 SBDCs ................. 126 hours; 

$15,147.72. 

Reporting ....................................................... 2 $58.90 2/hr ........ 2 63 SBDCs ................. 252 hours; 

$14,842.80. 

Reviewing Reports (SBA) .............................. 0.5 $137.10 3/hr ...... 2 For 63 SBDCs .......... 63 hours; $8,637.30. 

Total Administrative Costs ...................... ........................ ........................... .................... ................................... 441 hours; 

$38,627.82. 

2Based on the most recently available data, from 2019 Salary Survey of America’s SBDC, hourly wage of an Accounting, Grants, and Finance 

Position of ($29.45) plus 100 percent for benefits. Salary Survey (americassbdc.org), p. 12. 3Based on the 2022 salary of a GS–14 step 5 analyst in the DC area plus 100 percent for benefits. SALARY TABLE 2022–DCB (opm.gov). 


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The undiscounted schedule of 

benefits and costs over the first three 

years of the rule (with the values in year 

three to continue in perpetuity) are 

presented in the following table: 

TABLE 3—SCHEDULE OF COSTS/(SAVINGS) OVER 3-YEAR HORIZON

Benefits Costs 

Year 1 ...................................................... 378 hours; $45,443.16 .......................................... 441 hours; $38,627.82. 

Year 2 ...................................................... 378 hours; $45,443.16 .......................................... 310 hours; $23,107. 

Year 3 ...................................................... 378 hours; $45,443.16 .......................................... 310 hours; $23,107. 

The annualized net savings of this 

rule is $20,640 with a seven percent 

discount rate, assuming annual savings 

of $44,722 in perpetuity and costs in the 

first year of $38,015 and afterwards 

costs of $23,107, in perpetuity. 

3. What alternatives have been 

considered? 

SBA considered two alternatives to 

this rulemaking. First would be using 

internal SBA guidance, such as 

Standard Operating Procedures (SOPs), 

to interpret existing rules. SBA also 

considered continued interpretation of 

program requirements through the 

cooperative agreement negotiation 

process. However, under the applicable 

statute, SBA must consult with the 

ASBDC when developing documents as 

set forth in the statute (15 U.S.C. 

648(a)(3)(A)). 

In addition to this consolidation 

requirement, SBA values the input of 

the public. The rulemaking process 

would provide an opportunity for both 

the ASBDC and the public to comment 

on changes made to the Program. SBA 

also identified a need to streamline 

changes made to the notice of funding 

opportunity and cooperative agreement, 

and any changes in Federal grant 

procedures, since the Program 

regulations were last revised. Since this 

rule is an all-encompassing revision of 

the current regulations, SBA does not 

believe that more extreme changes 

could be made at this time. Also, this 

statute specifically includes a direction 

for SBA to develop regulations for the 

SBDC Program with the ASBDC and 

SBDCs. For these reasons, SBA believes 

that proceeding with a rulemaking is the 

best approach to revise SBDC Program 

requirements currently. 

Summary 

The changes proposed for this rule 

will not negatively affect access to the 

Program for small businesses or nascent 

entrepreneurs. Each small business and 

nascent entrepreneur will continue to 

have access to the full array of services 

provided by the SBDCs. In fact, there 

will be a de minimis cost savings 

realized by SBDCs because they will not 

have to reference multiple documents 

for guidance. There are also some nonquantifiable benefits such as increased 

privacy and the ability for SBA to 

enforce the requirements laid out in the 

rule. 

Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. It is anticipated that this rule 

will not be a significant regulatory 

action and, therefore, was not subject to 

review under section 6(b) of E.O. 12866, 

Regulatory Planning and Review, dated 

September 30, 1993. 

Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, 

Department of Defense (DoD), General 

Services Administration (GSA), and 

National Aeronautics and Space 

Administration (NASA) will send the 

rule and the ‘‘Submission of Federal 

Rules Under the Congressional Review 

Act’’ form to each House of the Congress 

and to the Comptroller General of the 

United States. A major rule cannot take 

effect until 60 days after it is published 

in the Federal Register. This rule is not 

anticipated to be a major rule under 5 

U.S.C. 804. 

Executive Order 12988 

This action meets applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988, Civil 

Justice Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. The action does not have 

retroactive or preemptive effect. 

Executive Order 13132 

Seven recipients (States) are grantees 

of SBDC Programs hosted by State 

economic development organizations. 

They are Colorado, Illinois, Indiana, 

Minnesota, Montana, Ohio, and West 

Virginia. All other grantees are hosted 

by institutions of higher education. This 

rule imposes no additional or special 

burdens on the State-based SBDCs. As 

mentioned above the grantees are 

currently abiding by these regulations 

and 2 CFR part 200 as the requirements 

are already in the notice of funding 

opportunity and cooperative agreement. 

The recipient organizations apply or 

volunteer to participate in the Program 

and can withdraw at any time. 

SBA determined that this rule will not 

have substantial direct effects on the 

States, on the relationship between the 

Federal Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Therefore, for the 

purposes of Executive Order 13132, 

SBA has determined that this rule has 

no federalism implications warranting 

preparation of a federalism assessment. 

However, SBA invites comments on 

issues relating to the federalism aspects 

of this rule. 

Paperwork Reduction Act, 44 U.S.C. Ch. 

35 

SBA determined that this rule would 

not impose additional reporting and 

recordkeeping requirements under the 

Paperwork Reduction Act (PRA). 

Currently, there are two PRA 

submissions associated specifically with 

the SBDC Program: (1) OMB control 

number 3245–0140 Cooperative 

Agreement; and (2) OMB control 

number 3245–0169, Federal Cash 

Transaction Report, Financial Status 

Report, Program Income Report, and 

Narrative Program Report. These will 

not change, and no new requirements 

are required in the rule. 

Regulatory Flexibility Act, 5 U.S.C. 601– 

612 

When an agency issues a rulemaking 

proposal, the Regulatory Flexibility Act 

(RFA) requires the Agency to prepare an 


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4SBA Table of Size Standards. 

Initial Regulatory Flexibility Analysis 

(IRFA) describing the economic impact 

that the rulemaking may have on small 

entities. Section 605 of the RFA allows 

an agency to certify a rule, in lieu of 

preparing an analysis, if the rulemaking 

is not expected to have a significant 

economic impact on a substantial 

number of small entities. 

The rule revises regulations to outline 

current policies and procedures for the 

SBDC Program. Specifically, the rule 

clarifies and defines the role of the 

District Office regarding cooperative 

agreement oversight activities by adding 

definitions and procedures throughout 

the regulations. Second, SBA adds 23 

definitions that refine and explain 

various roles, procedures, documents, 

and categories of funding and revises 

other definitions for clarification. Third, 

a section is added to codify SBDC client 

confidentiality. Finally, the current 

process of hiring a State/Region Director 

is outlined in an SBA policy notice; 

however, the regulation codifies and 

refines this process. Most of these 

changes are already implemented by the 

SBDCs, and these regulations are 

codifying them. 

The rule impacts 62 SBDCs that 

primarily fall into the North American 

Industry Classification System (NAICS) 

codes 611210 (junior colleges) and 

611310 (colleges, universities, and 

professional schools). In addition, seven 

SBDCs are hosted by state economic 

development organizations, such as 

state Departments of Trade or 

Commerce. 

A junior college is considered small if 

its annual receipts are $28.5 million 4 or 

less while colleges, universities, and 

professional schools are considered 

small if annual receipts are $30.5 

million or less. As shown in Table 2, 

only one SBDC can be considered small 

under both size standards. Note that 

these size standards do not apply to the 

seven SBDCs hosted by state 

organizations. However, state 

organizations under NAICS 92 (public 

administration) do not have applicable 

small business size standards but would 

not be considered small using the 

standards of NAICS codes 611210 or 

611310. 

TABLE 5—SBDC SIZE STANDARD BY NAICS CODE

NAICS code SBA Small business size standard: annual Receipts threshold Count 

Junior Colleges (611210) ............................................................ Less than or equal to $28.5 million ...........................................

Greater than $28.5 million .........................................................

1 

7 

Colleges, Universities, and Professional Schools (611310) ....... Less than or equal to $30.5 million ...........................................

Greater than $30.5 million .........................................................

0 

47 

Public Administration (92) ........................................................... No standard established ............................................................ 7 

Total ..................................................................................... .................................................................................................... 62 

The purpose of the rule is to codify 

existing practices and to provide 

consistency between regulations and the 

Program’s governing documents and 

practices. The Regulatory Impact 

Analysis presented earlier describes the 

costs and savings of the rule and the 

small net savings relative to the number 

of entities. Accordingly, the 

Administrator of the SBA, hereby 

certifies to the Chief Counsel of 

Advocacy of SBA that this rule will not 

have a significant economic impact on 

a substantial number of small entities. 

SBA invites comment from the public 

on this certification. 

RISE Act (Research Investment To Spark 

the Economy Act of 2021, H.R. 7308) 

The Administrator may authorize an 

SBDC to provide advice, information, 

and assistance, as described in 

subsection (c) of the Small Business Act, 

to a small business concern located 

outside of the state, without regard to 

geographic proximity to the small 

business development center, if the 

small business concern is located in an 

area for which the President has 

declared a major disaster. 

The Administrator may provide 

financial assistance to an SBDC, a 

Women’s Business Center described in 

section 29 of the Small Business Act, 

SCORE, or any proposed consortium of 

such individuals or entities to spur 

disaster recovery and growth of small 

business concerns located in an area for 

which the President has declared a 

major disaster. 

List of Subjects in 13 CFR Part 130 

Grant programs-business, Small 

businesses, Technical assistance. 

For the reasons stated in the 

preamble, the Small Business 

Administration amends 13 CFR part 130 

as follows: 

PART 130—SMALL BUSINESS 

DEVELOPMENT CENTERS 

■ 1. The authority citation for part 130 

is revised to read as follows: 

Authority: 15 U.S.C. 634(b)(6), 648, and 

648 note. 

■ 2. Revise § 130.100 to read as follows: 

§ 130.100 Introduction. 

(a) Objective. The Small Business 

Development Centers (SBDC) Program 

creates a broad-based system of 

assistance for the small business 

community by linking the resources of 

Federal, state, tribal, and local 

governments with the resources of the 

educational community and the private 

sector. The Program provides small 

businesses and aspiring entrepreneurs 

with a wide array of technical assistance 

and support to strengthen performance 

and sustainability of existing small 

businesses, and to enable the creation of 

new business entities. The Small 

Business Administration (SBA or the 

Agency) articulates its responsibilities 

for the general management and 

oversight of the SBDC Program by 

means of a cooperative agreement with 

the recipient organization. 

(b) Adoption of amended references. 

All references in this part to Standard 

Operating Procedures, SBA official 

policies and procedures, and award 

documents adopt all ensuing changes or 

amendments to such sources. 

■ 3. Amend § 130.110 by: 

■ a. Adding the definition 

‘‘Accreditation process’’ in alphabetical 

order; 

■ b. Revising the definitions ‘‘Applicant 

organization’’ and ‘‘Application’’; 

■ c. Removing the definition ‘‘Area of 

Service’’ and adding the definition 

‘‘Area of service’’ in its place; 

■ d. Adding the definitions ‘‘Associate 

Administrator/Entrepreneurial 

Development (AA/ED)’’ and ‘‘Associate 

Administrator/Small Business 

Development Centers (AA/SBDC)’’ in 

alphabetical order; 


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■ e. Removing the definition ‘‘Cash 

Match’’ and adding the definition ‘‘Cash 

match’’ in its place; 

■ f. Adding the definitions 

‘‘Clearinghouse’’ and ‘‘Client’’ in 

alphabetical order; 

■ g. Removing the definitions 

‘‘Cognizant Agency’’ and ‘‘Cooperative 

Agreement’’ and adding the definitions 

‘‘Cognizant agency’’ and ‘‘Cooperative 

agreement’’ in their places, respectively; 

■ h. Revising the definition of 

‘‘Counseling’’; 

■ i. Adding the definition ‘‘Counseling 

record’’ in alphabetical order; 

■ j. Revising the definitions ‘‘Direct 

costs’’ and ‘‘Dispute’’; 

■ k. Adding the definition ‘‘District 

Office’’ in alphabetical order; 

■ l. Revising the definitions ‘‘Grants 

Management Specialist’’, ‘‘In-kind 

contributions’’, and ‘‘Indirect costs’’; 

■ m. Adding the definitions ‘‘Insular 

areas’’ and ‘‘Key personnel’’ in 

alphabetical order; 

■ n. Revising the definitions ‘‘Lead 

Center’’ and ‘‘Lobbying’’; 

■ o. Adding the definitions ‘‘Matching 

funds’’, ‘‘Notice of funding 

opportunity’’, ‘‘Notice of non-renewal’’, 

‘‘Notice of suspension’’, ‘‘Notice of 

termination’’, and ‘‘Office of Small 

Business Development Centers 

(OSBDC)’’ in alphabetical order; 

■ p. Removing the definition 

‘‘Overmatched Amount’’ and adding the 

definition ‘‘Overmatched amount’’ in its 

place; 

■ q. Adding the definitions ‘‘Prior 

approval’’ and ‘‘Program funds’’ in 

alphabetical order; 

■ r. Revising the definition ‘‘Program 

income’’; 

■ s. Removing the definition ‘‘Program 

manager’’ and adding ‘‘Program 

Manager’’ in its place; 

■ t. Adding the definition ‘‘Program 

performance data’’ in alphabetical order; 

■ u. Removing the definition ‘‘Project 

officer’’ and adding the definition 

‘‘Project Officer’’ in its place; 

■ v. Revising the definition ‘‘Project 

period’’; 

■ w. Adding the definition ‘‘Proposal’’ 

in alphabetical order; 

■ x. Revising the definition ‘‘Recipient 

organization’’; 

■ y. Adding the definition ‘‘SBDC Lead 

Center Director’’ in alphabetical order; 

■ z. Revising the definition ‘‘SBDC 

network’’; 

■ aa. Adding the definitions ‘‘SBDC 

satellite location’’, ‘‘SBDC service 

center’’, and ‘‘SBDC Service Center 

Director’’ in alphabetical order; 

■ bb. Removing the definition 

‘‘Specialized Services’’ and adding the 

definition ‘‘Specialized services’’ in its 

place; 

■ cc. Revising the definition ‘‘Training’’; 

and 

■ dd. Adding the definition ‘‘Training 

record’’ in alphabetical order. 

The additions and revisions read as 

follows: 

§ 130.110 Definitions. 

Accreditation process. An evaluation 

process to assist an SBDC with assessing 

its processes and outlining areas 

needing improvement by providing 

recommendations to strengthen delivery 

of services and assistance. 

Applicant organization. A qualified 

eligible entity that applies for Federal 

financial assistance to establish, 

administer, and operate an SBDC 

network under a new or renewed 

cooperative agreement. 

Application. Also referred to as the 

proposal or the renewal application, the 

written submission by a new applicant 

organization or an existing recipient 

organization describing its projected 

SBDC activities for the upcoming budget 

period and requesting SBA funding for 

use in its operations. 

Area of service. As designated in the 

cooperative agreement, the state or 

region in which an applicant 

organization proposes to provide 

services, or in which a recipient 

organization currently provides 

services. 

Associate Administrator/ 

Entrepreneurial Development (AA/ED). 

The individual who is appointed by the 

SBA Administrator to oversee the Office 

of Entrepreneurial Development (OED), 

where the SBDC Program is located. 

Associate Administrator/Small 

Business Development Centers (AA/ 

SBDC). The individual who is 

statutorily mandated to administer the 

SBDC Program. 

* * * * * 

Cash match. Non-Federal funds 

budgeted and expended by the recipient 

organization and/or sponsoring SBDC 

organization for direct costs of the 

project. Cash match excludes indirect 

costs, overhead costs, in-kind 

contributions, and program income. See 

2 CFR 200.306. 

Clearinghouse. A source of market 

and industry information made 

available to all SBDC networks to assist 

clients and supports the exchange of 

information between SBDCs. 

Client. A nascent entrepreneur or 

existing small business seeking services 

provided by the SBDC. 

Cognizant agency. The Federal 

awarding agency that provides the 

predominant amount of direct funding 

to a recipient. See 29 CFR 99.105. 

Cooperative agreement. A legal 

instrument of financial assistance 

between a Federal awarding agency or 

pass-through entity and a non-Federal 

entity that, consistent with 31 U.S.C. 

6302–6305: 

(1) Is used to enter into a relationship 

the principal purpose of which is to 

transfer anything of value from the 

Federal awarding agency or passthrough 

entity to the non-Federal entity to carry 

out a public purpose authorized by a 

law of the United States (see 31 U.S.C. 

6101(3)); and not to acquire property or 

services for the Federal Government or 

pass-through entity’s direct benefit or 

use. 

(2) Is distinguished from a grant in 

that it provides for substantial 

involvement between the Federal 

awarding agency or pass-through entity 

and the non-Federal entity in carrying 

out the activity contemplated by the 

Federal award. 

(3) The term does not include: 

(i) A cooperative research and 

development agreement as defined in 15 

U.S.C. 3710a; or 

(ii) An agreement that provides only: 

(A) Direct United States Government 

cash assistance to an individual; 

(B) A subsidy; 

(C) A loan; 

(D) A loan guarantee; or 

(E) Insurance. 

(4) Is a negotiated legal agreement 

between SBA and a recipient 

organization containing the terms and 

conditions under which SBA provides 

Federal funds for the performance of 

SBDC activities. 

* * * * * 

Counseling. Qualifying technical or 

management assistance, as defined in 

the cooperative agreement, provided 

through the SBDC Program to clients on 

an individual basis, as established by 

policy. 

Counseling record. A record that 

provides individual client contact 

information, demographics about the 

client/business and data on the 

counseling provided. 

Direct costs. Expenditures that can be 

identified specifically with a final cost 

objective and are further defined in 2 

CFR part 200. 

Dispute. A programmatic or financial 

disagreement that the recipient 

organization requests be handled in 

accordance with the dispute resolution 

procedures set forth at § 130.630. 

District Office. The local SBA office, 

in collaboration with the OSBDC, is 

charged with: ensuring that small 

business market needs are met by the 

SBDC; conducting the regularly 

scheduled compliance reviews; 

monitoring statements as required; and 


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collaborating with the SBDC to perform 

joint events and trainings. 

* * * * * 

Grants Management Specialist. An 

SBA employee within the Office of 

SBDC, designated by the AA/SBDC, 

who meets the Office of Management 

and Budget (OMB) standards and 

certifications and is responsible for the 

budgetary review, award, and 

administration of one or more SBDC 

cooperative agreements. 

In-kind contributions. Property, 

facilities, services, or other 

nonmonetary contributions from nonFederal sources. See 2 CFR part 215 

(OMB Circular A–110) and part 143 of 

this chapter, as applicable. 

Indirect costs. Costs generally 

incurred for a common or joint purpose. 

See 2 CFR part 220 (OMB Circular A– 

21), 225 (OMB Circular A– 87), and/or 

230 (OMB Circular A–122). 

Insular areas. Territories include the 

Virgin Islands, Guam, American Samoa, 

the Trust Territory of the Pacific Islands, 

and the Government of the Northern 

Mariana Islands. See 48 U.S.C. 1469a. 

Key personnel. Principal staff of the 

Lead Center and SBDC service centers, 

including SBDC Lead Center Directors, 

SBDC Service Center Directors, or 

managers of International Trade Centers, 

Technology Program Centers, and 

directors of other SBDC specialty 

programs and any other leadership 

positions identified by the SBDC 

network. 

Lead Center. The administrative office 

of the recipient organization that 

operates and manages an SBDC 

network. 

Lobbying. ‘‘Lobbying’’ as described in 

2 CFR parts 220 (OMB Circular A–21), 

225 (OMB Circular A–87), and 230 

(OMB Circular A–122) and Public Law 

101–121, section 319, which discuss the 

limitations on use of appropriated funds 

to influence decisions of certain of 

Federal officials, including Members of 

Congress, Federal contracting, and 

financial transactions. 

Matching funds. The combined 

amounts of non-Federal cash and 

noncash resources proposed for the 

cooperative agreement or claimed to 

fulfill statutory match requirements. 

Notice of funding opportunity. The 

annual solicitation that an applicant 

organization or recipient organization 

must respond to in its initial or renewal 

application. 

Notice of non-renewal. A notice 

provided to an SBDC stating that the 

SBA will not renew the cooperative 

agreement with the current recipient 

organization. 

Notice of suspension. A notice 

provided to an SBDC stating that the 

SBDC is under suspension. 

Notice of termination. A notice 

provided to an SBDC stating that the 

SBDC is terminated. 

Office of Small Business Development 

Centers (OSBDC). The SBA program 

office providing leadership and program 

oversight, managing the funding 

formula, program budget, and the 

establishment and maintenance of all 

program policy over the national SBDC 

network. 

Overmatched amount. Contributions 

of non-Federal cash and of non-cash 

resources for authorized SBDC activities 

in excess of the statutorily required 

match. 

Prior approval. The written 

concurrence from the appropriate SBA 

AA/SBDC, Deputy Associate 

Administrator for the Office of Small 

Business Development Centers, Grants 

Management Officer, Grants 

Management Specialist, or Program 

Manager for a proposed action or 

amendment to the SBDC cooperative 

agreement. 

* * * * * 

Program funds. Also referred to as 

project funds and defined as all funds 

authorized under the cooperative 

agreement including, but not limited to, 

Federal funds, cash match, non-cash 

match from indirect costs, in-kind 

contributions, and program income 

revenues. 

Program income. Gross income 

earned as a result of the Federal award 

during the period of performance, 

including funds received under a 

sponsorship agreement, as defined in 2 

CFR 200.80. 

Program Manager. An SBA employee 

designated by the AA/SBDC who 

oversees and monitors the SBDC 

network operations, including meeting 

the statutorily required programmatic 

reviews. 

Program performance data. Any 

anonymous data or information that 

captures the outputs of the SBDC 

service center and outcomes of services 

provided to clients. 

Project Officer. The individual who 

serves as the primary local contact for 

the SBDC, conducts regular compliance 

oversight as required by AA/SBDC, and 

works in conjunction with the Program 

Manager. 

Project period. The total annual 

period of performance for an award 

made under the notice of funding 

opportunity. 

Proposal. Also known as the 

application, the written submission by a 

new applicant organization or an 

existing recipient organization 

describing its projected SBDC activities 

for the upcoming budget period and 

requesting Federal funding for use in its 

operations. 

Recipient organization. The selected 

applicant organization receiving Federal 

funding to deliver SBDC services under 

a cooperative agreement. 

* * * * * 

SBDC Lead Center Director. Also 

referred to as the State/Region Director, 

an individual or position whose time is 

allocated to the SBDC grant program or 

other related small business grant 

programs that provide comparable 

management and technical assistance to 

the small business community in 

accordance with the cooperative 

agreement. For the purposes of meeting 

the Program requirements, no less than 

75 percent of the SBDC Lead Center 

Director’s time and effort must be 

devoted specifically to the SBDC grant. 

The SBDC Lead Center Director has 

clear and complete control of all SBDC 

Program funds. 

SBDC network. The Lead Center, 

SBDC service centers, and SBDC 

satellite locations funded and affiliated 

by sub-agreements and comprising a 

single service delivery network 

administered by a recipient 

organization. 

SBDC satellite location. A geographic 

point of service delivery that operates 

on a full- or part-time basis under direct 

management of an SBDC Lead Center 

Director or SBDC Service Center 

Director. 

SBDC service center. An entity 

operating full-time authorized by the 

Lead Center to perform SBDC 

counseling and training services. Any 

applicant commencing after January 1, 

1992, establishing service centers within 

its area of service, to the extent 

practicable, should be primarily housed 

within institutions of higher education 

or a Women’s Business Center (WBC) 

operating pursuant to section 29 of the 

Small Business Act (15 U.S.C. 656) as 

stated in section 21(a)(1) of the Small 

Business Act (15 U.S.C. 648(a)(1)). 

SBDC Service Center Director. The 

individual responsible for SBDC 

Program implementation and 

management at an SBDC service center 

within an SBDC network. 

* * * * * 

Specialized services. SBDC services 

other than counseling or training, e.g., 

extensive research, hiring outside 

consultants for a client, translation 

services, etc. 

* * * * * 

Training. An educational activity or 

event presented by an SBDC that 


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delivers a structured program of 

knowledge on an entrepreneurial or 

business-related subject, as established 

in the cooperative agreement. 

Training record. A record that 

provides aggregate data about a training 

event to include training topic and 

program format. 

■ 4. Amend § 130.200 by: 

■ a. Removing the paragraph 

designation and heading from paragraph 

(a) introductory text; 

■ b. Removing paragraph (b); 

■ c. Redesignating paragraphs (1) 

through (4) as paragraphs (a) through 

(d); 

■ d. Redesignating paragraphs (5) and 

(6) as paragraph (h) and (g), 

respectively; 

■ e. Adding paragraphs (e) and (f); 

■ f. In newly redesignated paragraph (g), 

removing the period and adding ‘‘; or’’ 

in its place; and 

■ g. Revising newly redesignated 

paragraph (h). 

The additions and revision read as 

follows: 

§ 130.200 Eligible entities. 

* * * * * 

(e) A Women’s Business Center 

operating pursuant to section 29 of the 

Small Business Act (15 U.S.C. 656); 

(f) The Commonwealth of the 

Northern Mariana Islands SBDC must 

have its principal office located in the 

Commonwealth of the Northern Mariana 

Islands (CNMI) and must: 

(1) Be a CNMI government or agency; 

(2) Be a regional entity; 

(3) Be a CNMI-chartered development, 

credit, or finance corporation; 

(4) Be an institution of higher 

education (including but not limited to 

any land-grant college or university, any 

college or school of business, 

engineering, commerce, or agriculture, 

community college or junior college); 

(5) Be a current SBA Women’s 

Business Center (WBC); or 

(6) Be any entity formed by two or 

more of the entities in paragraphs (f)(1) 

through (5) of this section; 

* * * * * 

(h) Any entity operating continually 

as a recipient organization on or before 

December 31, 1990. 

■ 5. Revise § 130.300 to read as follows: 

§ 130.300 Small Business Development 

Centers (SBDCs). 

The Small Business Development 

Center Program is established under the 

statutory authority of the Small 

Business Act (15 U.S.C. 648) and 

administered through cooperative 

agreements issued to recipient 

organizations. 

■ 6. Revise § 130.310 to read as follows: 

§ 130.310 Area of service. 

(a) The AA/SBDC will designate, in 

the cooperative agreement, the 

geographic area of service of each 

recipient organization. Generally, no 

more than one recipient organization 

may be located in a state. 

(1) The AA/SBDC may determine that 

making awards to multiple recipient 

organizations in a state is necessary to 

more effectively implement the Program 

and provide services to all interested 

small businesses. 

(2) Once the Administration has 

entered into a cooperative agreement, a 

subsequent decision to change the 

recipient organization’s area of service 

will be considered a non-renewal or 

termination. This decision will be 

subject to the procedures outlined in 

§ 130.700. 

(b) The recipient organization must 

locate its Lead Center and SBDC service 

centers in the designated area of service 

to ensure that services are readily 

accessible to all small businesses within 

the designated area of service. 

(c) Any applicant commencing after 

January 1, 1992, must ensure that any 

new SBDC service centers established 

within its area of service, to the extent 

practicable, are primarily housed within 

institutions of higher education or a 

WBC operating pursuant to section 29 of 

the Small Business Act (15 U.S.C. 656) 

as stated in section 21(a)(1) of the Small 

Business Act (15 U.S.C. 648(a)(1)). 

(d) The allocation of resources, 

including site locations of the Lead 

Center and the SBDC service centers, 

will be reviewed for adequacy of 

coverage by SBA as part of the 

application review process for each 

budget period. 

§ 130.320 [Removed] 

■ 7. Remove § 130.320. 

§§ 130.330, 130.340, 130.350, and 130.360 

[Redesignated as §§ 130.320, 130.330, 

130.340, and 130.350] 

■ 8. Redesignate §§ 130.330, 130.340, 

130.350, and 130.360 as §§ 130.320, 

130.330, 130.340, and 130.350. 

■ 9. Amend newly redesignated 

§ 130.320 by: 

■ a. Revising paragraph (a); 

■ b. Adding a sentence at the end of 

paragraph (b); 

■ c. Revising paragraph (c); 

■ d. Redesignating paragraphs (d) and 

(e) as paragraphs (g) and (h); 

■ e. Adding new paragraphs (d) and (e) 

and paragraph (f); and 

■ f. Revising newly redesignated 

paragraphs (g) and (h). 

The revisions and additions read as 

follows: 

§ 130.320 Operating requirements. 

(a) The recipient organization has the 

contractual responsibility for 

performing the duties of the Lead Center 

in accordance with the cooperative 

agreement. The Lead Center must be an 

independent department within the 

recipient organization, having its own 

staff, including a full-time SBDC 

Director. 

(b) * * * The Lead Center must 

conduct and document annual financial 

and programmatic reviews and 

evaluations of its SBDC service centers 

consistent with § 130.820(a). 

(c) The Lead Center’s and SBDC 

service center’s services will be 

available to the public throughout the 

year during the normal hours of the 

business community. In addition, every 

effort should be made to provide 

assistance, including during 

nonbusiness hours, both in-person and 

virtually, as appropriate, to meet local 

community business demands and 

needs. Variations from these schedules 

or other anticipated closures will be 

included in the new or annual renewal 

application. Emergency closures will be 

reported to the SBA District Office as 

soon as is feasible. 

(d) The specific identification ‘‘Small 

Business Development Center’’ must be 

a part of the official name of every SBDC 

Lead Center and SBDC service center 

within the SBDC network, unless 

waived by the AA/SBDC. 

(e) Any entity that is using the term 

‘‘Small Business Development Center’’ 

and under contract with the Lead Center 

and receiving program funds, whether 

receiving Federal funding or not, is 

considered a part of the recipient 

organization’s network and as such the 

recipient organization is required to 

report to the OSBDC each SBDC service 

center’s performance as well as any 

funds or program income generated by 

the activities of that Service Center. 

(f) Each SBDC must maintain a 

minimum number of export and trade 

certified counselors to assist clients 

develop export and international trade 

opportunities. The standard for 

establishing the number of counselors 

required to have this certification is 

based on the total number of full-time 

equivalent (FTE) counseling employees 

in an SBDC’s network. The minimum 

number of certified counselors for an 

SBDC network is the lesser of: 

(1) Five counselors; or 

(2) Ten percent of the total number of 

FTE counselors in the network. 

(g) The Lead Center and all its SBDC 

service centers must implement and 

have in effect at all times, a uniform and 

enforceable conflict of interest policy 

applicable to all SBDC employees, 


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contractors, consultants, and volunteers 

and must be signed annually. At a 

minimum, this policy must be 

consistent with the conflict of interest 

principles set forth in 2 CFR 2701.112. 

(h) The SBDC network will comply 

with 13 CFR parts 112, 113, 117, and 

136 requiring that no person, on the 

grounds of race, color, handicap, marital 

status, national origin, race, religion, or 

gender, be excluded from participation 

in, be denied the benefits of, or 

otherwise be subjected to discrimination 

under any program or activity 

conducted by the SBDC network. 

■ 10. Amend newly redesignated 

§ 130.330 by: 

■ a. Revising paragraph (a); 

■ b. Removing the words ‘‘are 

encouraged to’’ from paragraph (b)(1) 

and adding in their place the word 

‘‘must’’; 

■ c. Revising paragraphs (b)(2) through 

(5) and (c); 

■ d. Adding paragraph (d). 

The revisions and addition read as 

follows: 

§ 130.330 SBDC services and restrictions 

on service. 

(a) Services. The SBDC network, to 

the extent practicable, must provide 

prospective entrepreneurs and existing 

small businesses, known as clients, with 

counseling, access to training, and 

specialized services. The SBDC must 

create counseling records for clients 

when required by the cooperative 

agreement. The services provided must 

relate to the formation, financing, 

management, and operation of small 

business enterprises. The network must 

provide services that meet local needs 

as determined through periodic needs 

assessments, which are continually 

improved to keep pace with changing 

local small business needs. It is the 

responsibility of the recipient 

organization to change local SBDC 

service centers, as necessary, to meet the 

needs of the communities it serves in 

accordance with §§ 130.310 and 

130.620. See section 21(c)(3) of the 

Small Business Act (15 U.S.C. 

648(c)(36)) for the full list of 

compulsory services. To the extent 

possible, SBDCs will work in 

collaboration with other Federal, state, 

tribal, and local government programs 

that assist small businesses and will 

coordinate and cooperate, to the extent 

practicable, with other local public and 

private providers of small business 

assistance. An SBDC Lead Center 

should use and compensate qualified 

small business vendors as one of its 

resources. 

(b) * * * 

(2) SBDCs may provide assistance and 

guidance with the necessary 

documentation required for applications 

for capital assistance; including 

assistance for SBA loan products and 

services, including small dollar loans, 

free of charge as stated in § 130.470. 

(3) SBDCs should prepare their clients 

to represent themselves to lending 

institutions. SBDCs may attend 

meetings with lenders to assist clients in 

preparing financial packages; however, 

SBDCs may not attest to a client’s 

readiness or creditworthiness to the 

lending institution either verbally or in 

writing. 

(4) SBDCs may participate on boards 

and panels of financial institutions and 

with outside organizations but may not 

be involved in any final credit decisions 

involving SBDC clients or in making or 

servicing loans. 

(5) With respect to SBA loan guaranty 

programs, SBDCs may accompany an 

applicant organization appearing before 

SBA or a lender but may not advocate 

for, promote, recommend approval or 

otherwise attempt in any manner to 

influence SBA or a lender to provide 

financial assistance to any of its clients. 

(c) Special emphasis initiatives. 

Periodically, SBA may identify, and 

include in the cooperative agreement, 

portions of the general population to be 

targeted for assistance by SBDCs and 

specific focus areas including, but not 

limited to: base closure assistance; 

cybersecurity and preparedness; 

employee ownership program; and 

intellectual property protections. (Refer 

to current cooperative agreement.) 

(d) Portable assistance. The current 

cooperative agreement is a startup and 

sustainability non-matching program to 

be conducted by eligible SBDCs in 

communities that are economically 

challenged as a result of a business or 

government facility downsizing or 

closing, which has resulted in the loss 

of jobs or small business instability. The 

funds will be used for small business 

development center personnel expenses 

and related small business programs 

and services. 

■ 11. Revise newly redesignated 

§ 130.340 to read as follows: 

§ 130.340 Specific program 

responsibilities. 

(a) Policy development. The AA/ 

SBDC will establish program policies 

and procedures to improve the delivery 

of services by SBDCs to the small 

business community, and to enhance 

compliance with applicable laws, 

regulations, OMB guidelines, and 

Executive orders. The AA/SBDC will, to 

the extent practicable, consult with the 

recognized association. 

(b) Program administration. The AA/ 

SBDC or designee will recommend the 

annual program budget, establish 

appropriate funding levels in 

compliance with the statute, and review 

the annual budgets submitted by each 

applicant. The AA/SBDC will also select 

applicants to participate in the Program, 

to maintain a clearinghouse to provide 

for the dissemination and exchange of 

information between SBDCs, and to 

conduct audits of recipients of SBDC 

grants. 

(c) Responsibilities of SBDC Lead 

Center Directors. (1) The SBDC Lead 

Center Director must be an individual 

dedicating not less than 75 percent of 

their time to the supervision and control 

of the SBDC on behalf of the recipient 

organization. The position may not be 

held by a company or contractor. 

(2) The SBDC Lead Center Director 

position must have direct reporting 

authority, at a minimum, equivalent to 

that of a college dean in a university 

setting or the third level of management 

or administration within a state agency. 

(3) The Lead Center Director will 

direct and monitor program activities 

and financial affairs of the SBDC 

network to ensure effective delivery of 

services to the small business 

community, and compliance with 

applicable laws, regulations, 2 CFR part 

200, and the terms and conditions of the 

cooperative agreement. 

(4) The SBDC Lead Center Director 

must have the authority necessary to 

control all personnel, budgets, and 

expenditures under the cooperative 

agreement. 

(5) The SBDC Lead Center Director 

will serve as the SBA’s principal contact 

for all matters involving the SBDC 

network including, but not limited to, 

ensuring that state and local needs are 

addressed; financial and programmatic 

reporting are submitted; service centers 

are providing access to training; 

employees have experience necessary to 

conduct meaningful counseling; etc. 

■ 12. Amend newly redesignated 

§ 130.350 by: 

■ a. Removing the word ‘‘must’’ from 

paragraph (a)(1) and adding in its place 

the word ‘‘will’’; 

■ b. Revising paragraph (a)(2); 

■ c. Removing ‘‘Area of Service’’ from 

paragraph (a)(3) and adding in its place 

‘‘area of service’’; 

■ d. Revising paragraphs (a)(4) and (6) 

and (b)(1); and 

■ e. Adding paragraphs (b)(3) through 

(5). 

The revisions and additions read as 

follows: 

§ 130.350 SBDC advisory boards. 

(a) * * * 


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(2) This advisory board will be 

referred to as a State SBDC Advisory 

Board in a state/territory having only 

one recipient organization, and a 

Regional SBDC Advisory Board in a 

state having more than one recipient 

organization. 

* * * * * 

(4) New Lead Centers must establish 

a State or Regional SBDC Advisory 

Board by the beginning of the second 

project period. 

* * * * * 

(6) The reasonable cost of travel of 

any Board member for official Board 

activities may be paid out of the SBDC’s 

budgeted funds. Federal and program 

funds are not to be used to compensate 

advisory board members for non-travel 

related expenses such as time and effort. 

(b) * * * 

(1) The SBA will establish a National 

SBDC Advisory Board, appointed by the 

SBA Administrator, and comprised of 

members who are not Federal 

employees. The Board will elect a 

chairperson. Three members of the 

Board will be from universities, or their 

affiliates and the remainder will be from 

small businesses or associations 

representing small businesses. Board 

members will serve staggered three-year 

terms. The SBA Administrator may 

appoint successors to fill unexpired 

terms. 

* * * * * 

(3) The reasonable cost of travel of 

any National SBDC Advisory Board 

member for official Board activities will 

be paid by SBA out of SBDC line-item 

program funds. 

(4) Each member of the Board will be 

entitled to be reimbursed for expenses 

as a member of the Board. 

(5) The Board will meet at least 

semiannually and at the call of the 

Chairman of the Board. 

■ 13. Add a new § 130.360 to read as 

follows: 

§ 130.360 Selection of the SBDC Lead 

Center Director. 

(a) Selection. Selection of an SBDC 

Lead Center Director must be 

accomplished in accordance with the 

guidelines set forth in the notice of 

funding opportunity and cooperative 

agreement. 

(b) Vacancy. (1) The recipient 

organization must notify the appropriate 

SBA District Director (DD), Regional 

Administrator, and AA/SBDC within 

ten business days of either: 

(i) Being notified by the incumbent 

SBDC Lead Center Director of their 

intent to vacate the position; or 

(ii) Its formal decision to remove the 

incumbent SBDC Lead Center Director. 

(2) If the position will be vacated 

prior to the selection of a replacement, 

the recipient organization must appoint 

an interim SBDC Lead Center Director, 

prior to the vacancy, who will serve in 

that capacity until a permanent SBDC 

Lead Center Director is in position. 

(3) The recipient organization must 

inform the SBA District Director, 

Regional Administrator, and the AA/ 

SBDC within ten business days of the 

appointment of the interim SBDC Lead 

Center Director and provide that 

individual’s contact information. 

(4) An interim Lead Center Director 

must allocate at least 75 percent of their 

time and effort to the SBDC Program 

until a permanent SBDC Lead Center 

Director is in position. This must be 

documented in accordance with the 

policies of the recipient organization. 

An interim SBDC Lead Center Director 

must be knowledgeable about sponsored 

programs. The appointment period for 

such interim SBDC Lead Center Director 

will not exceed 120 days. Should more 

time be needed the recipient 

organization must obtain prior approval 

from the AA/SBDC for an extension. 

■ 14. Add § 130.370 to read as follows: 

§ 130.370 Contracts with other Federal 

agencies. 

(a) An SBDC Lead Center or SBDC 

service center organization may enter 

into a contract or grant with a Federal 

department or agency to provide 

specific assistance to small business 

concerns in accordance with paragraphs 

(b) and (c) of this section. 

(b) Prior to bidding on a non-SBA 

Federal award or contract, the SBDC 

Lead Center or service center must 

obtain written consent from the AA/ 

SBDC or designee regarding the subject 

and general scope of the award or 

contract to ensure that performance 

under the award or contract does not 

represent a conflict with the SBA’s 

cooperative agreement. The AA/OSBDC 

or designee shall respond to any written 

request within five business days. 

(c) Federal funds from other Federal 

programs (except for certain Community 

Development Block Grant program 

funds) may not be counted as match for 

purposes of the SBDC Program. In 

addition, match expenditures reported 

to the SBA under the cooperative 

agreement may not be used or reported 

as match for another Federal program. 

■ 15. Add § 130.380 to read as follows: 

§ 130.380 Client privacy. 

(a) SBDCs, including their contractors 

and other agents, are not permitted to 

disclose the Client’s name, address, 

email address, or telephone number, 

hereafter referred to as ‘‘client contact 

data,’’ of individuals or small businesses 

that obtain any type of assistance from 

the Program to any person or entity 

other than the SBDC, without the 

consent of the client, except in instances 

where: 

(1) Court orders require the SBA 

Administrator to do so in any civil or 

criminal enforcement action initiated by 

a Federal or state agency; or 

(2) The Administrator considers such 

a disclosure to be necessary for the 

purpose of conducting a financial audit 

of a center, not including those required 

under § 130.830, as determined on a 

case-by-case basis when formal requests 

are made by a Federal or state agency. 

Such formal requests must justify and 

document the need for individual client 

contact and/or program activity data to 

the satisfaction of the Administrator; or 

(3) SBA requires client contact data to 

directly survey SBDC clients. 

(b) SBDCs must provide an 

opportunity for a client to opt-in to 

allow the SBA to obtain client contact 

data. The SBA may use the permitted 

client contact data only to conduct 

surveys or studies that help 

stakeholders better understand how the 

services the client received affect their 

business outcomes over time. These 

surveys or studies would include, but 

not be limited to: 

(1) Studying evaluation and 

performance management; 

(2) Measuring the effect and economic 

or other impact of Agency programs; 

(3) Assessing public and SBDC 

partner needs; 

(4) Measuring customer satisfaction; 

(5) Guiding program policy 

development; 

(6) Improving grant-making processes; 

and 

(7) Other areas SBA determines would 

be valuable to strengthen the SBDC 

Programs and/or enhance support for 

SBDC clients. 

(c) SBDCs may not deny access to 

services to clients solely based on their 

refusal to provide consent as referenced 

in this section. 

(d) Any reports or studies on program 

activity produced by SBDC and/or the 

Administrator, including their 

contractors and other agents, may not 

disseminate client contact data and 

must only report data in the aggregate. 

Individual client contact data will not 

be disclosed in any way that could 

individually identify a client. 

(e) SBDCs and the Administrator, 

including their contractors and other 

agents, must obtain consent from the 

client prior to publishing media or 

reports that identify an individual 

client. 


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(f) This section does not restrict the 

Agency in any way from access and use 

of program performance data. 

■ 16. Revise § 130.400 to read as 

follows: 

§ 130.400 Application procedures. 

All SBDC applicants must comply 

with the annual notice of funding 

opportunity, including format, 

conditions, submission requirements, 

and due dates, for their new or renewal 

application to receive consideration. 

■ 17. Revise § 130.410 to read as 

follows: 

§ 130.410 New applications. 

(a) New applicants. New applicants 

must comply with the requirements set 

forth in the applicable notice of funding 

opportunity, including format, 

conditions, and due dates for their 

applications to receive consideration. 

(b) Consideration. Except in cases 

involving insular areas, only those 

applicants operating under § 130.200 

and incorporated solely within the state 

where the new SBDC is to be located 

will receive consideration. 

(c) Recruiting and selecting new 

recipient organizations. (1) SBA will use 

a fair, open and competitive 

procurement process to solicit proposals 

for new SBDC Program awards. 

(2) After completion of an objective 

review process, the AA/SBDC will make 

the final selection and notify the 

successful applicant. 

(3) The newly selected recipient 

organization may, with prior written 

approval from the SBA, incur qualified 

pre-award matching expenditures for 

the establishment of the Lead Center 

office, to recruit Lead Center staff, and 

to cover other related start-up 

expenditures to the extent permitted 

under 2 CFR 215.25(e)(1). 

■ 18. Revise § 130.420 to read as 

follows: 

§ 130.420 Renewal applications. 

(a) The recipient organization will 

submit the renewal application to the 

OSBDC using the submission process 

outlined in the annual notice of funding 

opportunity. 

(b) If the OSBDC chooses to not renew 

the award of an existing recipient 

organization or the recipient 

organization elects not to reapply, the 

OSBDC will award a cooperative 

agreement for the conduct of an SBDC 

project to a new recipient organization 

in the same area of service using a 

competitive process. If the OSBDC has 

initiated a non-renewal or termination 

action, the Agency will not issue the 

new award until all administrative 

remedies have been exhausted. For 

further information regarding the 

termination and non-renewal 

procedures, see § 130.700. 

(c) Significant factors considered in 

the renewal application review will 

include: 

(1) The applicant’s ability to obtain 

matching funds; 

(2) The quality of prior performance 

under the cooperative agreement as 

measured by client satisfaction rate; 

(3) The results of any examination 

conducted pursuant to § 130.810(b); 

(4) Corrective measures implemented 

as a result of examinations conducted; 

and 

(5) The accreditation provisions of 

§ 130.810(c) including any conditions, 

the most current accreditation report, 

and corrective measures implemented, 

affecting the recipient organization and 

the SBDC network. 

(d) The OSBDC will review the 

renewal application for conformity with 

the notice of funding opportunity. The 

AA/SBDC may request additional 

information and documentation prior to 

issuing the cooperative agreement. 

■ 19. Revise § 130.430 to read as 

follows: 

§ 130.430 Application decisions. 

(a) New applications will either be 

accepted or rejected in accordance with 

the evaluation criteria set forth in the 

applicable notice of funding 

opportunity. The AA/SBDC may 

approve, or conditionally approve, or 

deny any new application. The AA/ 

SBDC may approve or conditionally 

approve or deny a renewal application. 

The AA/SBDC may also reject a renewal 

application after following due process 

in accordance with the procedures set 

forth in § 130.700. If a renewal 

application is conditionally approved, 

the requirements that the recipient 

organization must meet in order to 

obtain full and unconditional approval, 

will be specified as special terms and 

conditions in the cooperative 

agreement. 

(b) In the event of a conditional 

approval, the SBA may fund a recipient 

organization for one or more specified 

periods of time up to a maximum of one 

budget period. If the recipient 

organization fails to comply with the 

special terms and conditions of the 

award to the satisfaction of the AA/ 

SBDC within the allotted time period, 

the AA/SBDC may suspend, non-renew, 

or terminate the cooperative agreement 

with the SBDC, in accordance with the 

procedures set forth in § 130.700. 

■ 20. Revise § 130.440 to read as 

follows: 

§ 130.440 Maximum grant. 

(a) No recipient organization will 

receive an SBDC grant, in any fiscal year 

under a cooperative agreement, 

exceeding the greater of the minimum 

statutory amount, or its pro rata share of 

all SBDC grants as determined by the 

statutory formula set forth in section 

21(a)(4)(C) of the Small Business Act (15 

U.S.C. 648(a)(4)(C)). This limit does not 

apply to the distribution of 

supplemental funds, or to grants 

provided pursuant to sections 

21(a)(4)(C)(viii) and 21(a)(6) of the Small 

Business Act (15 U.S.C. 648(a)(6)). 

(b) Additional grants are subject to the 

limitations set forth in section 21(a)(6) 

of the Small Business Act unless the 

statute providing for the additional 

grant states otherwise. 

■ 21. Amend § 130.450 by: 

■ a. Revising the second and third 

sentences of paragraph (a); 

■ b. In paragraph (b): 

■ i. Revising the third sentence and 

removing the fourth sentence; and 

■ ii. Removing ‘‘Cooperative 

Agreement’’ and adding in its place 

‘‘cooperative agreement’’; 

■ c. Revising paragraphs (c) through (e); 

and 

■ d. Adding new paragraphs (f) through 

(h). 

The additions and revisions read as 

follows: 

§ 130.450 Matching funds. 

(a) * * * Cash match must be equal 

to or greater than 50 percent of the SBA 

funds used by the SBDC. The remaining 

match required to equal the one-to-one 

match requirement may be provided 

through any allowable combination of 

additional cash, in-kind contributions or 

indirect costs. 

(b) * * * Any additional SBA 

requirements, specifications, or 

deliverables must be clearly identified 

in the budget narrative. * * * 

(c) Under the authority of 48 U.S.C. 

1469a(d), the AA/SBDC may, at his/her 

discretion, waive any requirement of 

matching funds for an insular territory 

otherwise required by law to be 

provided. Notwithstanding any other 

provision of law, in the case of 

American Samoa, Guam, the Virgin 

Islands, and the Commonwealth of the 

Northern Mariana Islands, any 

department or agency shall waive any 

requirements for local matching funds 

under $200,000, including in-kind 

contributions, required by law to be 

provided by American Samoa, Guam, 

the Virgin Islands, and the 

Commonwealth of the Northern Mariana 

Islands. 

(d) All applicants must submit a 

certification of cash match and program 


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income. This certification must be 

executed by an authorized official of the 

recipient organization and must identify 

any SBDC service center organization(s) 

providing cash match under a 

subcontract or other agreement. 

(e) In addition to the Federal and 

program income funds, all matching 

funds must be under the direct 

management of either the SBDC Lead 

Center Director or an SBDC Service 

Center Director, when budgeted under 

an SBDC service center organization. If 

in-kind contributions are utilized by the 

SBDC, the State Director or an SBDC 

Service Center Director is then 

considered to be in control of those 

contributions. 

(f) The Grants Management Specialist 

will determine whether matching funds 

and cash match set forth in the budget 

proposal are sufficient to issue the 

cooperative agreement. 

(g) Recipient organizations are not 

required but encouraged to identify 

overmatched amounts as part of the 

cooperative agreement. Overmatching 

expenditures are those which are 

derived from eligible matching sources; 

are reasonable, allowable, and allocable 

to the SBDC program; are over and 

above the minimum match required to 

the Federal expenditures; and are 

included on the required SBDC 

financial reporting to SBA for the 

project period. 

(1) Recipient organizations are 

encouraged to identify overmatched 

amounts as part of the cooperative 

agreement. The recipient organization 

must fully identify the amount and 

sources of claimed overmatched 

amounts. If overmatched amounts are 

reported, they are subject to the 

provisions of the cooperative agreement 

and SBA biennial programmatic and 

financial examinations. 

(2) An overmatched amount can be 

applied as matching funds for any 

funding increase (i.e., supplemental 

funds) received by the SBDC during the 

budget period, as long as the total cash 

match contributed by the SBDC is 50 

percent or more of the total SBA funds 

tendered during the budget period and 

provided that the total match is still 100 

percent. 

(3) Allowable overmatched amounts 

which have not been used in the 

manner described in this section may, 

with the approval of the AA/SBDC, be 

used as a credit to offset any confirmed 

audit disallowances applicable only to 

the budget period in which the 

overmatched amount exists and the two 

previous budget periods. Such offsetting 

funds will be considered matching 

funds. 

(h) The following sources cannot be 

used as matching funds for the SBDC 

network: 

(1) Uncompensated student labor; 

(2) SCORE, SBA, Women’s Business 

Centers, or other SBA resource partners; 

(3) Program income or fees collected 

from individuals or small businesses 

receiving assistance; 

(4) Federal funds other than 

Community Development Block Grant 

(CDBG) funds; 

(5) In-kind contributions, or indirect 

costs not solely dedicated to the SBDC 

Program, or under its control; 

(6) Any resource allocated and 

claimed as a matching cost to another 

federally funded program; or 

(7) Funds or other resources provided 

for an agreed upon scope of work 

inconsistent with the authorized 

activities of the SBDC Program. 

■ 22. Revise § 130.460 to read as 

follows: 

§ 130.460 Budget justification. 

(a) General. The SBDC Lead Center 

Director, as a part of the annual renewal 

proposal, or the applicant organization’s 

authorized representative, in the case of 

a new SBDC application, shall prepare 

and submit to the SBA Project Officer 

the budget justification for the 

upcoming budget period. The budget 

will be reviewed annually upon 

submission of a renewal application. 

(b) Direct costs. At least 80 percent of 

SBA funding must be allocated to the 

direct cost of program delivery. 

(c) Indirect costs. If the applicant 

organization or recipient organization 

waives all indirect costs, then 100 

percent of SBA funding must be 

allocated to program delivery. If the 

reimbursements of some, but not all, 

indirect costs are waived to meet the 

matching funds requirement, the lesser 

of the following may be allocated as 

reimbursed indirect costs of the Program 

and charged against the Federal 

contribution: 

(1) Twenty percent of Federal 

contribution; or 

(2) The amount remaining after the 

waived portion of indirect costs is 

deducted from the total indirect costs 

allowed by the SBA. 

(d) Separate SBDC service provider 

budgets. The applicant organization 

shall include separate budgets for all 

SBDC service providers in conformity 

with 2 CFR part 220, appendix A. 

Applicable direct cost categories and 

indirect cost base/rate agreements will 

be included for the Lead Center and all 

SBDC service providers, using a rate 

equal to or less than the negotiated 

predetermined rate. If no such rate 

exists, the sponsoring SBDC 

organization or SBDC service provider 

will negotiate a rate with its cognizant 

agency. In the event the sponsoring 

SBDC organization or SBDC service 

provider does not have a cognizant 

agency, the rate shall be, in accordance 

with OMB guidelines: 

(1) Negotiated with the SBA Project 

Officer; or 

(2) Apply the OMB de minimis rate. 

(e) Cost principles. Principles for 

determining allowable costs are 

contained in 2 CFR part 200, subpart E. 

(f) Salaries. (1) Where the recipient 

organization is an educational 

institution, the salaries of the SBDC 

Lead Center Director and the SBDC 

Service Center Director at a minimum 

must approximate the average 

annualized salary of a full professor and 

an assistant professor, respectively, in 

the school or department in which the 

SBDC is located. If a recipient 

organization is not an educational 

institution, the salaries of the SBDC 

Lead Center Director and the subcenter 

Directors must approximate the average 

salaries of parallel positions within the 

recipient organization. In both cases, the 

recipient organization should consider 

the Director’s longevity in the Program, 

the number of subcenters, the size of the 

SBDC budget, the number of service 

centers, and the individual’s experience 

and background when determining the 

salary. 

(2) Salaries for Lead Center Directors 

should be comparable to salaries paid 

Lead Center Directors in other states or 

regions with comparably sized 

programs, responsibilities, and 

authority. 

(3) Salaries for all other positions 

within the SBDC should be based upon 

level of responsibility and be 

comparable to salaries for similar 

positions in the area served by the 

SBDC. 

(g) Equipment. In accordance with 2 

CFR part 200, capital expenditures for 

equipment must have the prior approval 

of the Program Manager of the OSBDC, 

either through a specific disclosure in 

an annual cost proposal or through an 

approved amendment to an existing 

cooperative agreement. 

(h) Travel. (1) All travel must be 

separately identified in the proposed 

budget under the categories of: planned 

in-state/region, planned out-of-state/ 

region, unanticipated in-state/region, or 

unanticipated out-of-state/region. 

Unplanned travel estimates may be 

based on the SBDC’s experience. 

(2) Transportation costs must be 

justified in writing, including the 

estimated cost, number of persons 

traveling, and the benefit to be derived 


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by the small business community from 

the proposed travel. 

(3) Any proposed unplanned out-ofstate/region travel exceeding the 

approved amount budgeted for this 

category must be submitted to the SBA 

for approval on a case-by-case basis 

prior to traveling. 

(4) All foreign travel requests must be 

submitted to the appropriate District 

Director and the SBDC Program 

Manager for review and provided to the 

AA/SBDC for final approval in 

accordance with the notice of funding 

opportunity. Foreign travel charged to 

the SBDC cooperative agreement or 

performed by SBDC staff, while on duty 

for the recipient organization, must be 

approved in advance. 

(i) Planned foreign travel costs 

allocable to the SBDC cooperative 

agreement for SBDC network staff may 

be approved by AA/SBDC through the 

annual proposal process, but such 

planned costs must be fully disclosed 

and justified in the budget narrative for 

Agency review. Prior approval should 

be obtained from the AA/SBDC prior to 

travel in accordance with 2 CFR part 

200. 

(ii) Unanticipated foreign travel must 

be approved using the process set forth 

in this paragraph (h). 

■ 23. Add § 130.465 to read as follows: 

§ 130.465 Restricted and prohibited costs. 

(a) SBA prohibitions are consistent 

with those outlined in 2 CFR part 200. 

(b) An SBDC must not use project 

funds as collateral for a loan or other 

such monetary purpose. 

(c) An SBDC must not use project 

funds for memorabilia, gifts, prizes, 

souvenirs, entertainment, alcoholic 

beverages, amusement, social activities, 

or any other such costs. 

(d) Prior written approval from the 

AA/SBDC is need for SBDC project 

funds to be used for the purpose of 

fundraising activities and costs. SBDCs 

may include in initial applications and 

renewal applications proposed 

fundraising activities. After issuance of 

an approved cooperative agreement, an 

SBDC wishing to seek prior approval for 

new fundraising activities not already 

approved should follow the prior 

approval guidance in the cooperative 

agreement. Prohibited fundraising 

activities include, but are not limited to: 

(1) Costs of organized fundraising, 

endowment drives; 

(2) Financial or capital campaigns; or 

(3) Solicitation of gifts and bequests. 

(e) Project funds found to be used in 

violation of the restrictions in this 

section may be cause for termination, 

suspension, or non-renewal of the 

cooperative agreement. 

■ 24. Revise § 130.470 to read as 

follows: 

§ 130.470 Fees. 

(a) An SBDC may charge clients a 

reasonable fee to cover the costs of 

training (sponsored or cosponsored) by 

the SBDC, the sale of books, the rental 

of equipment or space, research work, 

hiring outside consultants for a 

particular client, or other specialized 

services. 

(b) SBDC network entities, staff, 

consultants, or volunteers must not 

solicit or accept fees or other 

compensation for counseling services, 

including, but not limited to, business 

or marketing plan development, loan 

packaging or credit application 

assistance, or other advisory services 

described in section 21 of the Small 

Business Act. 

■ 25. Revise § 130.480 to read as 

follows: 

§ 130.480 Program income. 

(a) Program income and interest 

earned on program income, may only be 

used for authorized purposes, in 

accordance with 2 CFR 200.307 and the 

cooperative agreement, such as to 

expand the quantity or quality of 

services, resources or outreach provided 

by the SBDC network. 

(b) Program income may not be 

reported or used as a matching resource. 

Unused program income must be 

carried over to the subsequent budget 

period by the SBDC network; however, 

the aggregate amount of network 

program income cannot exceed 25 

percent of the total SBDC budget 

(Federal and matching expenditures). 

(c) Program income exceeding 25 

percent of the total approved SBDC 

budget must be expended by the SBDC 

network prior to the end of the budget/ 

project period in which the excess 

occurs. 

(d) The Lead Center must report the 

consolidated program income sources 

and uses as an attachment to the 

financial status report for the SBDC 

network during the budget period. The 

SBDC must provide a narrative 

describing how program income was 

used to further program objectives. 

■ 26. Add § 130.490 to read as follows: 

§ 130.490 Property standard. 

See 2 CFR part 200, subpart D. 

■ 27. Revise § 130.500 to read as 

follows: 

§ 130.500 Funding. 

See 2 CFR 200.305. 

■ 28. Revise § 130.600 to read as 

follows: 

§ 130.600 Cooperative agreement. 

(a) Cooperative agreement provisions. 

A recipient organization will 

incorporate into its SBDC subagreements and contracts the provisions 

of the cooperative agreement. 

(b) Sub-agreements. SBA reserves the 

right to disapprove any sub-agreement 

entered into by recipient organizations 

with SBDC service center organizations, 

vendors, or contractors. 

(c) Goals and milestones. (1) The AA/ 

SBDC or designee will develop 

performance measurements for SBDC 

networks and include provisions for 

their achievement in the cooperative 

agreement. 

(2) The AA/SBDC or designee will 

negotiate with the designated 

association and Lead Center to establish 

the annual goals, milestones, and 

activities for the cooperative agreement. 

(3) Failure to meet the goals and 

milestones of the cooperative agreement 

may be considered in part of the 

determination for suspension, 

termination, or non-renewal in 

accordance with the dispute resolution 

procedures set forth in § 130.630. 

(4) Agency loan goals may not be 

negotiated or incorporated into the 

cooperative agreement without the prior 

written approval of the AA/SBDC. 

(d) Procurement policies and 

procedures. (1) Contracts and subagreements supported with funds 

provided under the cooperative 

agreement must comply with the 

procurement procedures of the recipient 

organization. 

(2) Contracting procedures must 

encourage open competition among 

qualified vendors and promote the 

effective, efficient, and responsible use 

of program resources and OMB 

guidance. 

(3) Contracting procedures should 

provide for domestic sourcing 

preferences to the greatest extent 

practicable, showing preference for the 

purchase, acquisition, or use of goods, 

products, or materials produced in the 

United States. 

§ 130.610 [Amended] 

■ 29. Amend § 130.610 by: 

■ a. Removing ‘‘Cooperative 

Agreement’’ and adding ‘‘cooperative 

agreement’’ in its place; and 

■ b. Removing the last sentence in the 

paragraph. 

■ 30. Revise § 130.620 to read as 

follows: 

§ 130.620 Revisions and amendments to 

cooperative agreements. 

(a) Requests for revisions. The 

cooperative agreement may not be 


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76648 Federal Register / Vol. 88, No. 214 / Tuesday, November 7, 2023 / Rules and Regulations 

unilaterally amended, modified, or 

revised by the recipient organization. 

Rather, a recipient organization must 

submit a written request to AA/SBDC 

along with a copy to the appropriate 

District Office when it wants to make 

one or more revisions to the cooperative 

agreement. Written approval from the 

AA/SBDC is required prior to the 

implementation of a proposed revision. 

Revisions that require amendment of the 

cooperative agreement include: 

(1) Any change in project scope or 

objectives that will substantially change 

outcomes described in the cooperative 

agreement; 

(2) Budget revisions exceeding the 

limit established in the cooperative 

agreement; and 

(3) Any proposed sole-source or onebid contracts exceeding the limits 

established by applicable administrative 

regulations or OMB. 

(b) Emergency authorizations. (1) In 

consultation with the Recognized 

Organization, the AA/SBDC may amend 

one or more cooperative agreements to 

authorize unanticipated out-of-state 

travel by SBDC personnel responding to 

a need for services in a presidentially or 

SBA Administrator declared major 

disaster area. Notification of this type of 

authorization will be accomplished 

through the publication of an SBA 

Notice in the Federal Register. 

(2) Proposed and actual travel costs 

incurred under an emergency 

authorization must comply with the 

requirements of § 130.460(h), as well as 

the relevant notice of funding 

opportunity and OMB guidelines. 

(c) Supplemental funding. If 

supplemental funds are available for 

distribution, SBA will publish a notice 

of funding opportunity in consultation 

with the Recognized Organization. 

■ 31. Revise § 130.630 to read as 

follows: 

§ 130.630 Dispute resolution procedures. 

(a) Financial disputes. (1) A recipient 

organization wishing to resolve a 

financial dispute must submit a written 

statement to the appropriate Grants 

Management Officer with copies to the 

Project Officer describing the subject of 

the dispute, along with any relevant 

documentation. The Grants 

Management Officer will respond in 

writing to the recipient organization 

within 30 calendar days of receipt of the 

descriptive statement. 

(2) If the recipient organization 

receives an unfavorable decision from 

the SBA, it may file an appeal with the 

AA/SBDC within 30 calendar days of 

the date of receipt of the unfavorable 

decision. 

(3) The AA/SBDC may request 

additional information or 

documentation from the recipient 

organization at any stage of the 

proceedings. The response to the 

request for additional information must 

be provided in writing to the AA/SBDC 

within 15 calendar days of receipt of the 

request. The AA/SBDC will transmit a 

written decision to the recipient 

organization within 15 calendar days of 

receipt of the appeal or within 15 

calendar days of receipt of additional 

information requested. 

(4) If the recipient organization 

receives an unfavorable decision from 

the AA/SBDC, it may make a final 

appeal to the SBA Grants and 

cooperative agreements Appeals 

Committee (the ‘‘Committee’’). The final 

appeal to the Committee must be filed 

within 30 calendar days of the date of 

receipt of the AA/SBDC’s written 

decision. Copies of the appeal must also 

be sent to the Grants Management 

Specialist and the Program Manager. If 

the recipient organization elects not to 

file an appeal with the Committee, the 

decision of the AA/SBDC becomes the 

final Agency decision on the matter. 

(5) A recipient organization may 

request a hearing before the Committee, 

but such requests will not be granted, 

unless material facts are substantially in 

dispute. Legal briefs and other technical 

forms of pleading are not required. 

However, appeals to the Committee 

must be in writing and contain at least 

the following information and 

supporting documentation: 

(i) Name and address of the recipient 

organization; 

(ii) Name and address of the 

appropriate SBA District Office(s); 

(iii) A copy of the underlying 

cooperative agreement, including all 

amendments; 

(iv) A statement of the grounds for 

appeal, with reasons why the appeal 

should be sustained; 

(v) A statement of the specific relief 

desired on appeal; and 

(vi) If a hearing is requested, a 

statement of the material facts the 

recipient organization believes are 

substantially in dispute. In the event a 

recipient organization fails to provide 

any of the information specified in 

paragraphs (a)(5)(i) through (v) of this 

section, the Committee may dismiss the 

appeal. 

(6) The Committee may request 

additional information or 

documentation from the recipient 

organization at any stage in the 

proceedings. The recipient 

organization’s response to the 

Committee must be submitted, in 

writing, within 15 calendar days of 

receipt of the request. 

(7) If a request for a hearing is granted, 

the Committee will provide the 

recipient organization with written 

instructions and will afford the parties 

the opportunity to present their 

respective positions to the Committee. 

(8) The Chairperson of the Committee, 

with the advice of the SBA’s Office of 

General Counsel (OGC), will issue a 

final written decision within 30 

calendar days of receipt of all 

information or within 30 calendar days 

of the completion of the hearing. Copies 

of the decision will be provided to the 

recipient organization, the AA/SBDC, 

the Grants Management Specialist, and 

the SBA Project Officer. 

(9) Where a recipient organization’s 

appeal to the Committee commences or 

is pending within 120 days of the end 

of the current budget period, the 

recipient organization has the right to 

request, in writing, that the matter be 

handled under an expedited appeal 

process. In such circumstances, the 

Committee, by an affirmative vote of its 

membership, may expedite the appeals 

process to attain final resolution of a 

dispute before the anticipated issuance 

date of a new cooperative agreement. 

(b) Programmatic (non-financial) 

disputes. (1) The SBDC Lead Center and 

the SBA District Office must make every 

effort to resolve any disputes that arise 

between the SBDC network and SBA 

involving non-financial, programmatic 

issues. If the recipient organization is 

not satisfied with the resolution, it may, 

by written request to the AA/SBDC, seek 

reconsideration of the programmatic 

dispute within 30 calendar days. When 

a recipient organization requests 

reconsideration of a programmatic 

dispute, the appropriate Program 

Manager will forward a written 

summary of the dispute, including 

comments from the SBDC Lead Center 

Director, the SBA District Office, and all 

other pertinent background information 

to the AA/SBDC within 15 calendar 

days of SBA’s receipt of the request. 

(2) The AA/SBDC will transmit a 

final, written decision to the recipient 

organization, the Lead Center Director, 

the SBA Project Officer, and the SBA 

District Office within 30 calendar days 

of the receipt of such documentation, 

unless the recipient organization agrees 

to an extension of time. 

■ 32. Revise § 130.700 to read as 

follows: 

§ 130.700 Suspension, termination, and 

non-renewal. 

(a) General. After entering into a 

cooperative agreement with a recipient 

organization, the SBA may take, as it 


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determines appropriate, any of the 

following actions based upon one or 

more of the circumstances listed in 

paragraph (b) of this section. 

(1) Non-renewal. The AA/SBDC may 

elect not to renew a cooperative 

agreement with a recipient organization 

at any point. In undertaking a 

nonrenewal action, the AA/SBDC may 

either choose not to accept or consider 

any application for renewal from the 

recipient organization or the Agency 

may choose not to exercise option years 

remaining under the cooperative 

agreement. When a cooperative 

agreement is not renewed, the recipient 

organization may continue to conduct 

project activities and incur allowable 

expenses until the end of the current 

budget period. If a recipient 

organization decides to not seek to 

renew its grant, it must notify the 

District Office and send a letter of intent 

to withdraw to the AA/SBDC as soon as 

it is feasible. 

(2) Suspension. (i) The AA/SBDC may 

suspend a cooperative agreement with a 

recipient organization at any point. A 

decision to suspend a cooperative 

agreement is effective immediately. The 

suspension of a recipient organization 

begins on the date the notice of 

suspension is issued, and the period of 

suspension will last no longer than six 

months. At the end of the period of 

suspension or at any point during that 

period, the AA/SBDC will either 

reinstate the cooperative agreement or 

commence an action for termination or 

non-renewal. 

(ii) The notice of suspension will 

recommend that the recipient 

organization cease work on the project 

immediately. The SBA is under no 

obligation to reimburse any expenses 

incurred by a recipient organization 

while its cooperative agreement is under 

suspension. Where AA/SBDC decides to 

lift a suspension and reinstate a 

recipient organization’s cooperative 

agreement, the Agency may, at its 

discretion, choose to reimburse a 

recipient organization for some or all of 

the expenses it incurred in furtherance 

of project objectives during the period of 

suspension. However, there is no 

guarantee that the Agency will elect to 

accept such expenses, and recipient 

organizations incurring expenses while 

under suspension do so at their own 

risk. 

(b) Cause. The AA/SBDC may 

terminate, elect not to renew, or 

suspend a cooperative agreement with a 

recipient organization for cause. The 

cause may include, but is not limited to 

the following: 

(1) Non-performance; 

(2) Poor performance; 

(3) Unwillingness or inability to 

implement changes to improve 

performance; 

(4) Disregard or material violation of 

regulations; 

(5) Willful or material failure to 

comply with the terms of the 

cooperative agreement, including 

relevant OMB Circulars; 

(6) Conduct of the SBDC Lead Center 

Director or other key personnel, 

reflecting a lack of business integrity or 

honesty, which is not properly 

addressed on the part of the recipient 

organization or sponsoring SBDC 

organizations; 

(7) A conflict of interest on the part 

of the recipient organization, the SBDC 

service centers, the SBDC Lead Center 

Director, other key personnel, 

contractors or volunteers that causes a 

real or perceived detriment to a small 

business concern, a contractor, the 

SBDC network, including but not 

limited to, SBDC service centers, or 

SBA; 

(8) Improper use of Federal funds; 

(9) Failure of a Lead Center or its 

service centers to consent to audits, 

examinations, certification reviews, or 

to maintain required documents or 

records; 

(10) Failure to implement 

recommendations from the audits or 

examinations within one year of 

notification of deficiencies; 

(11) Failure to implement conditions 

from accreditation reviews within the 

time frame recommended by the 

accreditation committee and established 

by the AA/SBDC; 

(12) Failure of the SBDC Lead Center 

Director to work at the SBDC Lead 

Center on a full-time basis; 

(13) Failure to promptly suspend or 

terminate the employment of an SBDC 

Lead Center Director, Service Center 

Director, or other key personnel, 

contractors, or volunteers upon receipt 

of knowledge or written information by 

the recipient organization and/or SBA 

indicating that such individual has 

engaged in conduct which may result or 

has resulted in a criminal conviction or 

civil judgment that would cause the 

public to question the SBDC’s integrity. 

The SBDC Lead Center Director (or 

other appropriate official in the SBDC 

network), when making the decision to 

suspend or terminate such an employee, 

must consider the magnitude of the 

behavior, the repetitiveness of the 

conduct, and the remoteness in time of 

the behavior underlying any conviction 

or judgment; 

(14) Failure to maintain adequate 

client service facilities or service hours; 

and 

(15) Any other action that materially 

and adversely affects the operation or 

integrity of an SBDC or the SBDC 

Program. 

(c) Administrative procedure for 

suspension, termination, and 

nonrenewal. These procedures apply to 

termination, non-renewal, and 

suspension of cooperative agreements 

with recipient organizations. 

(1) Taking action. When the Program 

Manager has reason to believe that there 

is cause to suspend, terminate, or nonrenew a cooperative agreement with a 

recipient organization, either based on 

their own knowledge or upon 

information provided by other parties, 

the AA/SBDC may undertake an 

enforcement action by issuing a written 

notice of suspension, termination, or 

non-renewal to the recipient 

organization. The effects of such notice 

are addressed in paragraph (a) of this 

section. 

(2) Notice requirements. Each notice 

of suspension, termination, or nonrenewal will set forth the specific facts 

and reasons for the AA/SBDC’s decision 

and will include reference to the 

appropriate legal authority. The notice 

will also advise the recipient 

organization that it has the right to 

request an administrative review of the 

decision to suspend, terminate, or nonrenew its cooperative agreement in 

accordance with the procedures set 

forth in paragraph (d) of this section. 

The notice will be transmitted 

electronically, via email, to the recipient 

organization on the same date it is 

issued by mail. 

(3) Relationship to Government-wide 

suspension and debarment. A decision 

by the AA/SBDC to suspend, terminate, 

or not renew an SBDC cooperative 

agreement does not constitute a nonprocurement suspension or debarment 

of a recipient organization under 

Executive Order 12549, Debarment and 

Suspension, and SBA’s implementation 

of OMB regulations at 2 CFR part 2700. 

However, a decision by the AA/SBDC to 

undertake a suspension, termination, or 

non-renewal enforcement action with 

regard to a particular SBDC cooperative 

agreement does not preclude or preempt 

the Agency from also taking action to 

suspend or debar a recipient 

organization for purposes of all Federal 

procurement and/or non-procurement 

opportunities. 

(d) Administrative review of 

suspension, termination and 

nonrenewal actions. When the AA/ 

SBDC has suspended, terminated, or 

elected not to renew a cooperative 

agreement, the recipient organization 

has the right to request an 

administrative review of the 


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76650 Federal Register / Vol. 88, No. 214 / Tuesday, November 7, 2023 / Rules and Regulations 

enforcement action. Administrative 

review of the AA/SBDC’s enforcement 

actions will be conducted by the 

Associate Administrator for 

Entrepreneurial Development (AA/ED). 

(1) Format. There is no prescribed 

format for a request for an 

administrative review of an SBA 

enforcement action. While a recipient 

organization has the right to retain legal 

counsel to represent its interests in 

connection with an administrative 

review, it is under no obligation to do 

so. Formal briefs and other technical 

forms of pleading are not required. 

However, a request for an administrative 

review of an SBA enforcement action 

must be in writing, should be concise 

and logically arranged, and must at a 

minimum include the following 

information: 

(i) Name and address of the recipient 

organization; 

(ii) Identification of the relevant SBA 

office/program (i.e., Office of Small 

Business Development Centers/Small 

Business Development Center Program); 

(iii) Cooperative agreement number; 

(iv) Copy of the notice of suspension, 

termination, or non-renewal; 

(v) Statement discussing why the 

recipient organization believes the 

SBA’s actions were arbitrary, capricious, 

an abuse of discretion, and/or otherwise 

not in accordance with the law or 

governing regulations; 

(vi) Identification of the specific relief 

being sought (e.g., lifting of the 

suspension); 

(vii) Statement as to whether the 

recipient organization is requesting a 

hearing, and if so, the reasons why it 

believes a hearing is necessary; and 

(viii) Copies of any documents or 

other evidence the recipient 

organization believes support its 

position. 

(2) Service. Any recipient 

organization requesting an 

administrative review of an SBA 

enforcement action must submit copies 

of its request (including any 

attachments) to: 

(i) AA/SBDC; and 

(ii) the Associate General Counsel for 

Procurement Law. 

(3) Timeliness. To be considered 

timely, the AA/ED must receive a 

request for an administrative review 

from the recipient organization within 

30 days of the date of the notice of 

termination, non-renewal, or 

suspension. Any request for 

administrative review received by the 

AA/ED more than 30 days after the date 

of the notice of suspension, termination, 

or non-renewal will be considered 

untimely and will be rejected without 

being considered. 

(i) In addition, if the AA/ED does not 

receive a request for an administrative 

review within the 30-day deadline, then 

the decision by the AA/SBDC to 

suspend, terminate, or non-renew a 

recipient organization’s cooperative 

agreement will become the final Agency 

decision on the matter. 

(ii) [Reserved] 

(4) Standard of review. In order to 

have the suspension, termination, or 

non-renewal of a cooperative agreement 

reversed on an administrative review, a 

recipient organization must successfully 

demonstrate that the SBA enforcement 

action was arbitrary, capricious, an 

abuse of discretion, and/or otherwise 

not in accordance with the law or 

governing regulations. 

(5) Conduct of the proceeding. Each 

party must serve the opposing party 

with copies of all requests, arguments, 

evidence, and any other filings it 

submits pursuant to the administrative 

review. Within 30 days of the AA/ED 

receiving a request for an administrative 

review, the AA/ED must also receive the 

SBA’s arguments and evidence in 

defense of its decision to suspend, 

terminate, or non-renew a recipient 

organization’s cooperative agreement. If 

the SBA fails to provide its arguments 

and evidence in a timely manner, the 

administrative review will be conducted 

solely on the basis of the information 

provided by the recipient organization. 

After receiving the SBA’s response to 

the request for an administrative review 

or after the passage of the 30-day 

deadline for filing such a response, the 

AA/ED will take one or more of the 

following actions, as applicable: 

(i) Notify the parties whether the AA/ 

ED has decided to grant a request for a 

hearing. 

(ii) Direct the parties to submit further 

arguments and/or evidence on any 

issues, that she/he believes require 

clarification. 

(iii) Notify the parties that the AA/ED 

has declared the record to be closed and 

therefore will refuse to admit any 

further evidence or argument. 

(iv) Within ten calendar days of 

declaring the record to be closed, 

provide all parties with a copy of the 

AA/ED’s written decision on the merits 

of the administrative review. 

(6) Request for hearing. The AA/ED 

will only grant a request for a hearing 

if she/he concludes that there is a 

genuine dispute as to a material fact that 

cannot be resolved except by the taking 

of testimony and the confrontation of 

witnesses. If the AA/ED grants a request 

for a hearing, they will set the time and 

place for the hearing, determine 

whether the hearing will be conducted 

in person, via telephone or virtually, 

and identify which witnesses will be 

permitted to give testimony. 

(7) Evidence. The recipient 

organization and SBA each have the 

right to submit whatever evidence they 

believe is relevant to the matter in 

dispute. No form of evidence will be 

permitted unless a party has made a 

substantial showing, based upon 

credible evidence and not mere 

allegation, that the other party has acted 

in bad faith or engaged in improper 

behavior. 

(8) Decision. The decision of the AA/ 

ED will be effective immediately as of 

the date it is issued. The decision of the 

AA/ED will represent the final Agency 

decision on all matters in dispute on 

administrative review. No further relief 

may be sought from or granted by the 

Agency. If the AA/ED determines that 

the SBA’s decision to suspend, 

terminate, or non-renew a cooperative 

agreement was arbitrary, capricious, an 

abuse of discretion, and/or otherwise 

not in accordance with the law, she/he 

will reverse the Agency’s enforcement 

action and direct the SBA to reinstate 

the recipient organization’s cooperative 

agreement. 

(i) Where an enforcement action has 

been reversed on administrative review, 

the SBA will have no more than ten 

calendar days to implement the AA/ 

ED’s decision. However, to the extent 

permitted under the applicable OMB 

Circulars, the SBA reserves the right to 

impose such special conditions in the 

recipient organization’s cooperative 

agreement as it deems necessary to 

protect the Government’s interests. 

(ii) [Reserved] 

■ 33. Revise § 130.800 to read as 

follows: 

§ 130.800 Oversight of the SBDC Program. 

(a) The AA/SBDC and designees will 

monitor the SBDC’s performance and its 

ongoing operations under the 

cooperative agreement to determine if 

the SBDC is making effective and 

efficient use of program funds for the 

benefit of the small business 

community. 

(b) The District Office is the primary 

contact for the coordination of the 

delivery of services to the small 

businesses in each area of service. 

(c) The AA/SBDC may change the 

primary contact for coordination at any 

time and will notify the recipient 

organization of such a change in a 

timely manner. 

■ 34. Revise § 130.810 to read as 

follows: 

§ 130.810 SBA review authority. 

(a) Site visits. The AA/SBDC and 

designees will coordinate with, and 


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provide written advance notice to, the 

SBDC Lead Center Director when 

conducting periodic programmatic visits 

to the recipient organization, Lead 

Center, SBDC service center 

organizations, and other service 

locations. 

(1) The programmatic reviews will 

incorporate District Office oversight 

which will include conducting yearly 

reviews. 

(2) Site visits may be incorporated 

into oversight and monitoring activities 

of the SBA program office or the SBA 

District Office. 

(b) SBA examinations. The SBA 

designees shall perform a biennial 

programmatic and financial 

examination of each SBDC network. The 

purpose of these visits is to verify 

compliance with the cooperative 

agreement, analyze, assess, and evaluate 

performance management regarding its 

SBDC activities, and if necessary, make 

recommendations for improved service 

delivery. See 15 U.S.C. 648(k)(1). 

(c) Accreditation program. (1) When 

extending or renewing a cooperative 

agreement of an SBDC, SBA shall 

consider the results of the examinations 

and accreditation reviews. See 15 U.S.C. 

648(k)(3)(A). 

(i) The Small Business Act provides 

that the Administration may provide 

financial support, by contract or 

otherwise, to the association for the 

purpose of developing a SBDCs 

accreditation program. See 15 U.S.C. 

648(k)(2). 

(ii) SBDC networks must be reviewed 

for accreditation purposes and receive 

accreditation periodically, as negotiated 

between the AA/SBDC and the 

accreditation committee of the 

recognized association. 

(iii) If an SBDC does not receive 

accreditation, the SBA may initiate the 

non-renewal or termination procedure 

pursuant to § 130.700. 

(iv) The statue at 15 U.S.C. 

648(k)(3)(B) states the SBA may not 

renew or extend any cooperative 

agreement with a SBDC unless the 

center has been approved under the 

accreditation program conducted 

pursuant to this section, except that the 

AA/SBDC may waive such accreditation 

requirement, at their discretion, upon a 

showing that the center is making a 

good faith effort to obtain accreditation. 

(2) The AA/SBDC and/or designee 

will participate in the deliberations of 

the accreditation committee. 

(d) Audits. The examinations by the 

SBA will not serve as a substitute for 

audits required of Federal recipients 

under the Single Audit Act of 1984 (31 

U.S.C. 7501) or applicable OMB 

guidelines (see 2 CFR part 200, subpart 

F) nor will such internal review 

substitute for investigations conducted 

by the SBA Office of Inspector General 

under the authority of the Inspector 

General Act of 1978 (Pub. L. 95–452, 92 

Stat. 1101) as amended (see § 130.830). 

■ 35. Revise § 130.820 to read as 

follows: 

§ 130.820 Records and recordkeeping. 

(a) Records. (1) The recipient 

organization will ensure that all 

financial and programmatic records, 

whether prepared by itself or another 

entity, are adequately maintained in 

accordance with Federal regulations in 

order to corroborate its performance and 

financial reports to the SBA, as well as 

to support SBA examinations or other 

audits. These records must include 

adequate documentation to support the 

expenditures claimed and activities 

performed under the cooperative 

agreement. The documentation should 

provide the means to verify proper 

separation of costs among various 

Federal awards and non-Federal 

spending. See also 2 CFR 200.333 

through 200.337. 

(2) The recipient organization will 

ensure complete and accurate detailed 

financial and programmatic 

documentation by all SBDC service 

center organizations and service centers. 

The recipient organization will monitor 

and oversee its SBDC service center 

organizations and SBDC service centers 

each budget period to ensure 

compliance with the OMB guidelines 

and regulations. See 2 CFR part 200, 

subpart D. 

(i) The recipient organization and 

Lead Center will ensure that: 

(A) All funds received throughout the 

SBDC network, both Federal and nonFederal, including program income, are 

properly accounted for, adequately 

safeguarded, accurately reported, and 

properly used to further program 

objectives. 

(B) Each SBDC service center 

organization has reviewed all charges 

made to its SBDC accounts, including 

program income, to ensure that they are 

allowable. 

(ii) The recipient organization’s Lead 

Center monitoring and oversight 

activities must include annual on-site or 

virtual visits to all its SBDC service 

center organizations. 

(A) These review procedures must 

ensure that SBDCs are in compliance 

with the terms and conditions of the 

cooperative agreement. 

(B) The Lead Center will document 

the results of annual reviews of the 

financial and program records of its 

SBDC service center organizations. 

(C) An in-person monitoring review 

must be conducted the same year that 

there is a change in leadership or a 

record of problems in that year and 

must be conducted not less than every 

4 years. 

(3) The recipient organization must 

keep records on the amount, source, and 

purpose of all funding under the overall 

management of the SBDC network, 

including Federal programs. 

(b) Availability of records. (1) All 

SBDC network records must be made 

available to the SBA for review upon 

request. 

(2) All SBDC network records, 

financial and programmatic, must be 

maintained for a period of three years 

following the date SBA accepted the 

annual performance report and final 

financial status report from the recipient 

organization. 

(3) The recipient organization will 

maintain sufficiently detailed program 

and financial documentation to 

facilitate transition and provide 

continuous SBDC services when 

changes occur in SBDC service center 

organizations, as well as to support 

reviews and audits authorized by the 

SBA. 

■ 36. Add § 130.825 to read as follows: 

§ 130.825 Reports. 

(a) General. The recipient 

organization will submit consolidated 

performance and financial reports for 

the SBDC network to the SBA for 

review. These reports will reflect actual 

SBDC network activity and 

accomplishments pertinent to the 

funding periods. Report formats will be 

specified in the annual notice of 

funding opportunity. See also 2 CFR 

200.327 through 200.329. 

(b) Frequency. (1) Recipient 

organizations that have been in the 

Program for more than three years must 

submit financial and programmatic 

performance reports 30 calendar days 

after completion of six months of 

operation each budget year. 

(2) Recipient organizations that have 

been in the Program for fewer than three 

years must submit financial and 

programmatic performance reports 30 

calendar days after completion of each 

quarter for the first three years. 

(3) The final report from recipient 

organizations must be submitted in 

accordance with the notice of funding 

opportunity and terms and conditions. 

(c) Electronic data reports. Lead 

Centers are responsible for reporting 

their consolidated network performance 

data quarterly to the SBA. The format of 

the reports will be designated in the 

notice of funding opportunity. Lead 


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76652 Federal Register / Vol. 88, No. 214 / Tuesday, November 7, 2023 / Rules and Regulations 

Centers must ensure that the data is 

submitted to the SBA within the 

timeframe stipulated and that the data is 

accurate and complete. 

(d) Performance reports. Performance 

reports must include the data specified 

in paragraphs (d)(1) and (2) of this 

section, along with any other 

information the SBDC feels may be 

relevant to a full appraisal of its 

performance. 

(1) The quarterly and semiannual 

performance reports will address, in a 

brief narrative, the SBDC’s major 

activities and objectives. The reports 

should include a discussion on the 

progress toward achieving those 

objectives. 

(2) Final performance reports should 

include an overall summary of effort 

expended to deliver the core services 

described in the cooperative agreement 

for the full budget period. A discussion 

of performance measurements achieved 

and an explanation of those objectives 

or measurements not met should be 

included. Performance reports should 

be a summary of the activities, events or 

achievements by reportable category 

with an accompanying management 

analysis. 

■ 37. Revise § 130.830 to read as 

follows: 

§ 130.830 Audits and investigations. 

See 2 CFR part 200, subpart F. 

■ 38. Add § 130.840 to read as follows: 

§ 130.840 Closeout procedures. 

(a) General. The purpose of closeout 

procedures is to ensure that the program 

funds and property acquired or 

developed under the SBDC cooperative 

agreement are fully reconciled and 

transferred seamlessly between 

recipient organizations, SBDC service 

center organizations, or other Federal 

programs. The responsibility of 

conducting closeout procedures is 

vested with the recipient organization 

whose cooperative agreement is not 

being renewed. The procedures should 

be documented and accomplished in 

accordance with the applicable property 

standards and the provisions of this 

part. 

(b) Supplies and equipment. Supplies 

and equipment acquired with funds 

under the cooperative agreement must 

be accounted for at closeout. 

(c) Intellectual property. (1) In 

accordance with 2 CFR part 200, subpart 

D, intangible property and items subject 

to copyright that are purchased or 

developed under the cooperative 

agreement must be accounted for at 

closeout. 

(2) Inventory and documentation of 

intellectual property must be collected 

by the Lead Center for close out. In 

circumstances where SBA is not 

renewing the cooperative agreement, the 

recipient organization must provide an 

intellectual property inventory and the 

support documentation to the SBDC 

clearinghouse and to the District Office 

for disposition instructions. 

(d) Responsibilities—(1) Recipient 

organizations. When an SBDC 

cooperative agreement is not being 

renewed, regardless of cause, the 

recipient organization will ensure the 

following steps are taken in their 

closeout process and perform the 

necessary inventories and 

reconciliations prior to submitting the 

final annual financial report. 

(i) An inventory of the SBDC property 

must be compiled and evaluated. An 

asset evaluation final report accounting 

for the property, equipment, and the 

aggregate of usable supplies and 

materials must be provided to the 

Program Manager. 

(ii) Program income balances must be 

reconciled, and unused program income 

transferred to the Lead Center from 

SBDC service center organization 

accounts. 

(iii) Client counseling and training 

records, paper and electronic, must be 

compiled to facilitate an SBA program 

closeout review. 

(iv) Financial records will be 

compiled to facilitate an SBA closeout 

financial examination. 

(2) Close out actions. Recipient 

organizations that terminate SBDC 

service center organization agreements 

will perform the close out actions in 

paragraphs (d)(1)(i) through (iv) of this 

section to ensure the safeguard of 

program resources under the 

cooperative agreement. 

(3) SBA. Upon receipt of the final 

financial report from a non-renewing 

recipient organization, the AA/SBDC 

will issue disposition instructions to the 

former recipient organization as 

described in paragraph (e) of this 

section. 

(e) Final disposition. (1) The final 

financial status report from the recipient 

organization must include the 

information identified in the inventory 

process and identify any program 

income collected from the SBDC 

network. 

(2) The AA/SBDC will issue written 

disposition instructions to the recipient 

organization providing: 

(i) The name and address of the entity 

or agency to which property and 

program income must be transferred; 

(ii) A date by which the transfer must 

be completed; 

(iii) Actions to be taken regarding 

property and program income; 

(iv) Actions to be taken regarding 

program records such as client and 

training files; and 

(v) Authorization to incur costs for 

accomplishing the transfer. Such costs 

may, when authorized, be applied to 

residual program income or Federal or 

matching funds. 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2023–22164 Filed 11–6–23; 8:45 am] 

BILLING CODE 8026–09–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2023–1716; Project 

Identifier MCAI–2022–00168–Q; Amendment 

39–22577; AD 2023–21–05] 

RIN 2120–AA64 

Airworthiness Directives; Thales AVS 

France SAS Flight Management 

Computer Navigation Modules 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for certain 

Thales AVS France SAS (Thales) flight 

management computer navigation 

modules (FMC2 NAVM) installed on, 

but not limited to, airplanes. This AD 

was prompted by reports that, due to 

software issues, certain FMC2 NAVM 

navigation modules provide erroneous 

data to the flight management computer, 

compromising safe flight of the airplane. 

This AD requires revising the existing 

aircraft flight manual (AFM) for your 

airplane and updating the navigation 

database. This AD also prohibits 

installing a database unless certain 

procedures were removed. The FAA is 

issuing this AD to address the unsafe 

condition on these products. 

DATES: This AD is effective December 

12, 2023. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of December 12, 2023. 

ADDRESSES: 

AD Docket: You may examine the AD 

docket at regulations.gov under Docket 

No. FAA–2023–1716; or in person at 

Docket Operations between 9 a.m. and 

5 p.m., Monday through Friday, except 

Federal holidays. The AD docket 

contains this final rule, the mandatory 

continuing airworthiness information 

(MCAI), any comments received, and 


khammond on DSKJM1Z7X2PROD with RULES