Source: http://slideplayer.com/slide/2810569/
Timestamp: 2017-07-25 00:19:23
Document Index: 734034148

Matched Legal Cases: ['§124', '§ 124', '§ 124', '§ 13', '§ 38', '§ 38']

8(a) Business Development Program - ppt download
Published byJaxson jay Pleasant
8(a) Business Development ProgramVisit us at
What are the eligibility requirements of the 8(a) Business Development Program?Visit us at
Eligibility Criteria for the 8(a) ProgramU. S. Citizens CFR § Size CFR § Socially Disadvantaged	13 CFR § Economically Disadvantaged	13 CFR § Ownership CFR § Control and Management	13 CFR § Potential for Success	13 CFR § Other CFR § ANC’s and AIT’s CFR § NHO’s CFR § CDC’s CFR § Visit us at
U.S. CITIZENSHIP Applicants not born in the U.S. must provide documentation to show that they are U.S. citizens. Visit us at
Individuals are presumed to be socially disadvantaged if they are U. SIndividuals are presumed to be socially disadvantaged if they are U.S. Citizens and members of one of the following groups (13 CFR § (b)(1)): Black American Asian Pacific American Individuals with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia, Vietnam, Korea, The Philippines, U.S. Trust Terr. Of the Pacific Islands, Rep. of the Marshall Islands. Fed. States of Micronesia, Comm. Of the Northern Mariana Islands, Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru Visit us at 6
Socially Disadvantaged Groups (cont’d)Hispanic American (includes individuals of Spanish & Portuguese descent). Native American American Indians, Native Hawaiians, or enrolled members of Federally or State recognized Indian Tribe Subcontinent Asian American Individuals with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands, or Nepal. Visit us at 7
The disadvantage must be chronic & substantial; Persons not members of the presumed groups must establish their individual social disadvantage by a preponderance of the evidence (13 CFR § (c)): The disadvantage may stem from race, ethnic origin, gender, physical handicap, long term environmental isolation, or other similar causes; The applicant must have personally suffered disadvantage in the United States; The disadvantage must be chronic & substantial; The discrimination must have negatively impacted business advancement. Visit us at 8
What is “Preponderance”?Generally, preponderance is evidence of a quality and quantity which leads the decision maker to objectively conclude that the existence or truth of the facts asserted is more probable than not. Visit us at 9
Types of Evidence for PreponderanceSBA will consider any relevant evidence in assessing a claim of social disadvantage. In every case, however, SBA will consider the experiences of the individual, where applicable, in education, employment and business history to see if the totality of the circumstances shows disadvantage in entering into or advancing in the business world. Evidence relating to all three areas should be addressed, if applicable, to the individual’s case, and each circumstance should demonstrate how it has affected the individual’s entrance into and advancement in the business world. The failure to establish disadvantage in any one or two areas does not prevent an individual from meeting the negative impact requirement as long as the totality of the circumstances experienced by the individual demonstrates such disadvantage. Visit us at 10
Economic DisadvantageVisit us at 11
Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit. Visit us at 12
NET WORTH (assets less liabilities)Net worth criterion: After excluding the individual’s qualified retirement account(s), equity in the firm, and equity in the primary residence, net worth may not exceed: $250, for 8(a) eligibility*. NET WORTH (assets less liabilities) less	Qualified IRA/retirement account value(s) less	equity (value - mtg. bal.) in primary residence less	equity in business equals adjusted net worth * 13 CFR § (b)(2)(i)- Contingent liabilities do not reduce the net worth. Visit us at 13
Each individual claiming economic disadvantage must explain it in a narrative and provide personal financial information (on SBA Form 413) for themselves and his/her spouse, unless legally separated. (13 CFR § (b)(1)) When reporting assets and liabilities each individual must record ALL his/her assets (whether wholly or partially owned) and ALL his/her liabilities (whether wholly or partially responsible). Visit us at 14
Has a role in the applicant concern; SBA will consider a spouse’s financial situation when determining the disadvantaged applicant’s access to capital and credit where the spouse: Has a role in the applicant concern; Has loaned money to the applicant concern; Provided credit support to, or guaranteed a loan for, the applicant concern. Unless information is provided to show that the couple are legally separated. SBA, when determining an applicant individual’s economic disadvantage, does not take into consideration community property statutes. 13 CFR § (b)(2) Visit us at 15
FAIR MARKET VALUE OF ALL ASSETSFOR INITIAL ELIGIBILITY- an individual will not be considered economically disadvantaged if the fair market value of ALL of his/her assets exceeds $4MM. The ONLY exception to this are funds invested in a qualified IRA/retirement account. 13 CFR § (c)(4) Visit us at 16
Adjusted Personal IncomeFOR INITIAL ELIGIBILITY: If a disadvantaged individual’s adjusted gross income, averaged over three years, exceeds $250,000, he/she will be presumed by SBA to not be economically disadvantaged. (13 CFR § (c)(3)(i)) Unless: Income was unusual & not likely to occur in the future: Losses commensurate with, and related to, earnings were suffered; Evidence that income is not indicative of lack of economic disadvantage. Visit us at 17
Personal Income (cont’d)Income from S-Corps, LLC’s (not filing a Schedule- C), or partnerships will not be included in personal income calculations if: Income was reinvested in the firm; or Used to pay taxes. Losses will not be used to reduce the personal income calculations. (13 CFR § (c)(3)(ii)) Visit us at 18
Personal Income (cont’d)SBA will examine the individual income tax returns for the prior three (3) years. Applicant’s must provide: Three most recent income tax returns, inc’l all schedules and attachments; All corresponding W-2’s and all 1099 forms verifying the income received during the year. W-2’s MUST total line seven (7) of each income tax return; 1099 and other forms/documentation must be provided to determine income and related adjustments. Visit us at
Ownership Visit us at
At least 51% unconditional direct ownership by the disadvantaged individual(s). Ownership through another entity is not direct. 13 CFR § (a) Partnerships: Agreements must reflect unconditional ownership. Each class of interest must be at least 51% owned by disadvantaged individual(s). 13 CFR § (b) Limited Liability Company: Disadvantaged individuals must own at least 51% of each class of member interest. 13 CFR § (c) Visit us at
Control and ManagementVisit us at
SBA will examine the partnership agreement, and any amendments. Partnerships: Agreements must reflect unconditional management by disadvantaged partner(s). DVD individual(s) must be named as the General Partner(s). 13 CFR § (b) SBA will examine the partnership agreement, and any amendments. Limited Liability Company: One or more disadvantaged individuals must serve as management members with unconditional control. 13 CFR § (c) SBA will examine the LLC’s operating agreement , and any amendments. Visit us at
Corporations: How control is established. 13 CFR §124.106(d) SBA will examine the corporations articles, by-laws, and meeting minutes, among other things. A.	Disadvantaged directors of the board must control the board by actual number of votes and must be able to establish a quorum without the presence of nondisadvantaged directors. OR Visit us at
B. Control without considering the board of directors : A single disadvantaged individual owns 100% of the voting stock. A single disadvantaged individual owns at least 51% of the voting stock, is on the board of directors and no supermajority* voting requirements exist. If a supermajority requirement exists, the disadvantaged individual must own at least the percentage of voting stock necessary to overcome any supermajority requirements. If more than one disadvantaged individual, each disadvantaged individual is on the Board of Director and together own at least 51% of the voting stock and no supermajority voting requirements exist, and there are enforceable agreements of the shareholders permitting one of them to vote all stock as a block without a shareholders meeting. If a supermajority requirement exists, the disadvantaged individuals must own at least the percentage of voting stock necessary to overcome any supermajority requirements. *	A supermajority is a percentage of votes required by shareholders to make decisions on behalf of the concern. For example, if a 2/3 vote is required to approve a bylaw change, disadvantaged individuals must have at least 2/3 of the votes necessary to control the concern. Visit us at
What constitutes Control?Visit us at
A Disadvantaged Individual must:Hold the position of President or Chief Executive Officer, Managing/ General Partner, or LLC Managing Member; Be physically located in the U.S.; Be the highest compensated individual; Have the ability to Hire and Fire; Set Policies; Have the ability to commit firm to contracts; Have the ability to the control Budget and Financial Disbursement; Visit us at
Do you control the Operations?Visit us at
Tests: Does a disadvantaged individual or individuals devote full-time to the business? Do you have sufficient managerial experience to run the concern? Do you have ultimate managerial control over individuals with technical expertise and/or critical licenses? Visit us at
Do Non-disadvantaged Individuals have the Ability to Control your firm?Visit us at
TESTS: Do contractual arrangements exists that allow a nondisadvantaged individual to control the firm? Was the firm transferred to an immediate family member for less then fair market value in the last two years? Is the nondisadvantaged individual a previous employer or supervisor? Does a nondisadvantaged individual: hold the critical license and have an equity interest in the applicant concern; provide the necessary licenses or bonding; have unlimited access to the business bank accounts; provide critical financing; control through business loan arrangements; and/or receive excessive compensation. Visit us at
Potential for Success Visit us at
Factors considered: Proof of two years operation in the firm’s primary industry as verified by revenues reported in business tax returns, NOT the applicant’s anniversary date. Financial capability: sufficient capitalization, financial performance, bonding capacity, manageable debts. Managerial and Technical capability: performance on previous contracts, firm has the necessary personnel, licenses, certifications, facilities, prior experience. Management capability: Education, experience and training of CEO and other managers, magnitude and complexity of past/current jobs, management systems. Qualifications for ability to perform on Federal contracts: relevant contracting experience, ability to meet Federal procurement policies. Visit us at
Waiver of the Two Year RuleVisit us at 34
SBA may waive the two-year rule if:The individual or individuals upon whom eligibility is to be based have substantial and demonstrated business management experience; The applicant firm has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD Program; The applicant firm has adequate capital to carry out its business plan as a Participant; The applicant firm has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category; The applicant firm has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform such contracts as a Participant. Visit us at 35
Good Character Visit us at
What shows lack of good character?Adverse information regarding possible criminal conduct by the applicant or its principals. Violations of any SBA regulations. Debarred or suspended individuals or firms. Applicant firms and principals that lack business integrity as shown by an indictment, guilty plea, or civil judgment. Any principal who is incarcerated or on parole or probation. Evidence that the firm knowingly submitted false information during the application process. Any firm or any of its principals that fail to pay financial obligations to the Federal Government. Visit us at
Ineligible Businesses & Individual DisqualificationVisit us at 38
Ineligible businesses: brokersIneligible businesses: brokers *; debarred or suspended persons or concerns; nonprofit organizations. Franchises may be allowed contingent upon SBA’s review of the franchise agreement. A business may participate only once. Even if ownership and control has completely changed, firm may not re-apply. Any person who has used his/her disadvantaged status to qualify another firm shall be regarded as non disadvantaged. * A broker is a concern that adds no material value to an item being supplied to procuring activity or which does not take ownership or possession of or handle the item being procured with its own equipment or facilities. Visit us at 39
Size Firms, including affiliates, must be small based on the applicant firm’s primary NAICS Code. Size is determined either by: average 3 years revenues, or # of employees (manufacturers, dealers, wholesalers) See 13 CFR 121 Size Regulations or visit our website: 70 % Rule – Faison Decision Visit us at 40
The 8(a) BD Application Forms include: 1010 1010 - IND 1623 1790 912413 Supporting documentation Visit us at
Alaskan Native Corp.(ANC) 13 CFR § 124.10913 CFR § (a)- ANC’s are subject to the same conditions of AIT’s. except that the following apply only to ANC’s. Alaska Native and their descendants MUST: Own a majority of the ANC’s equit;y and Total voting powers to elect ANC directors through holdings of settlement common stock. If so, the ANC is ec disadvantaged. 13 CFR § (a)(1) Applicant’s owned/controlled by ANC MUST be for profit. ANC own/controls applicant through: Majority of stock or other ownership; and Total voting power is held by ANC and settlement common stock holders. 13 CFR § (a)(3) Visit us at
American Indian Tribes (AIT) 13 CFR § 124.10913 CFR § (b)-Tribes must establish their economic disadvantage once. 13 CFR § (b)(1)- tribes meeting the definition in 13 CFR § are deemed socially disadvantaged. 13 CFR § (b)(2)*- to establish economic the tribe must provide, among other things: # of tribal members; present tribal unemployment rate; per capita income of members, inc’l judgment awards; %-age of local Indian population below poverty level; its access to capital; ALL assets as disclosed in a financial statement, incl’d those encumbered, or held in trust (both must be clearly delineated) ALL wholly/partially owned tribal enterprises/affiliates their NAICS codes tribal mbrs managing/controling, to include directors/officers. * Not applicable to ANC’s Visit us at
American Indian Tribes- Cont’d13 CFR § (b)(3)-Tribes must provide the following: All governing documents (such as tribe’s constitution or business charter)*; Evidence of eligibility for special programs/services provided by Federal or state government*; Article of incorporation and by-laws, or similar documents necessary to establish and govern a non-corporate legal entity; and Documents/materials necessary to establish tribe’s ec disadvantage*. * Not applicable to ANC’s if its status as an ANC is clearly stated in its articles. Visit us at
American Indian Tribes- Cont’d13 CFR § (c)(1)*- tribally owned concerns must be separate a distinct legal entities; Articles of incorporation/organization or partnership agreement MUST contain a waiver of sovereign immunity or “sue and be sued” clause designating UD Fed. Courts as courts of competent jurisdiction for all matters relative to SBA’s programs; Concern must be for profit Tribe must possess ec development powers in tribe’s governing documents. * Not applicable to ANC’s to the extent it requires waiver of sovereign immunity or “sue and be sued” clause. Visit us at
American Indian Tribes- Cont’d13 CFR § (c)(2)- tribally owned firm must qualify as small based on it primary NAICS code: Must certify to SBA it is small for purposes of performing ea. individual contract it is awarded; Size is determined independent of concern’s affiliation with the tribe, an entity of tribal gov’t, or firm’s owned by the tribe, unless otherwise determined by the Administrator. Visit us at
American Indian Tribes- Cont’d13 CFR § (c)(3)(i)- tribe must unconditionally own at least : 51% of voting stock (if firm is a corporation); and 51% of Aggregate of all classes of stock (if firm is a corporation); or 51% interest (if a non- corporate entity) 13 CFR § (c)(3)(ii)- tribe may not own 51% or more of a firm, which at the time of application or w/in prior two years, has been operating in the 8(a) program in the same primary NAICS code as the applicant firm. Tribe may own an applicant or 8(a) firm that conducts or will conduct secondary business in the applicant’s primary NAICS code. Example: app’s primary (236220) other firm’s primary (236220)= bad App’s primary (236220) other firm’s secondary (238120)= good Visit us at
American Indian Tribes- Cont’d13 CFR § (c)(6)- concerns must possess potential for success, as demonstrated by: (c)(6)(i)- having been in business for at least two years as evidenced by tax returns showing revenues generated in its primary industry; (c)(6)(ii)- managers has substantial managerial/technical expertise, the firm has a successful track record and adequate capital to sustain operations and carry out its business plan; and (c)(6)(iii)- tribe has a firm written agreement to support the firm’s operations and has the finances to do so. 13 CFR § (c)(7)- except for the tribe, the firm’s principals must demonstrate good character. Visit us at
Native Hawaiian Organizations (NHO)13 CFR § (a)- Firm’s owned by NHO’s must meet the eligibility requirements of 13 CFR § 13 CFR § (c)- NHO must establish ec disadvantage and that it activities principally benefit Native Hawaiians. (c)(1)- majority of NHO’s member’s must qualify as ec disadvantaged. For the first firm initial eligiblity requirements apply. For any additional firms, continuing eligibility requirements apply If NHO has no members, the majority of the board of directors mus qualify as ec disadvantaged. Visit us at
Native Hawaiian Organizations (NHO)13 CFR § (c)(2)- NHO should describe benefits to Native Hawaiians at the time firm applies. Additionally, NHO must: Include statements in governing documents identifying benefits to Native Hawaiians; and Provide a detailed plan showing how NHO revenue will principally benefit Native Hawaiians. 13 CFR § (d)- NHO must control firm. The firm must show that its board is controlled by NHO. Individuals managing the firm need not establish soc/ec disadvantage. Visit us at
Native Hawaiian Organizations (NHO)13 CFR § (e)- NHO may not own 51% or more of a firm, which at the time of application or w/in prior two years, has been operating in the 8(a) program in the same primary NAICS code as the applicant firm. NHO may own an applicant or 8(a) firm that conducts or will conduct secondary business in the applicant’s primary NAICS code. Example: app’s primary (236220) other firm’s primary (236220)= bad App’s primary (236220) other firm’s secondary (238120)= good 13 CFR § (f)- firm’s management is not deemed to have utilized their individual eligibility, as stated in § (b). Visit us at
Native Hawaiian Organizations (NHO)13 CFR § (g)- concerns must possess potential for success, as demonstrated by: (g)(1)- having been in business for at least two years as evidenced by tax returns showing revenues generated in its primary industry; (g)(2)- managers has substantial managerial/technical expertise, the firm has a successful track record and adequate capital to sustain operations and carry out its business plan; and (g)(3)- NHO has a firm written agreement to support the firm’s operations and has the finances to do so. Visit us at
Community Development Corporation(CDC)13 CFR § (a)- Firm’s owned by CDC’s must meet the eligibility requirements of 13 CFR § CFR § (b)- Firm’s owned by CDC’s or wholly owned business owned by a CDC are eligible to the extent it meets the requirements specified in and/or referred to in that section and it management and daily business operations are conducted by those having the managerial experience of the extent and complexity necessary to run the firm. Visit us at
Community Development Corporation(CDC)13 CFR § (c)- CDC owned firm must qualify as small based on it primary NAICS code: Size is determined independent of concern’s affiliation with the CDC, or firm’s owned by the CDC, unless otherwise determined by the Administrator. Visit us at
Community Development Corporation(CDC)13 CFR § (d)- CDC may not own 51% or more of a firm, which at the time of application or w/in prior two years, has been operating in the 8(a) program in the same primary NAICS code as the applicant firm. CDC may own an applicant or 8(a) firm that conducts or will conduct secondary business in the applicant’s primary NAICS code. Example: app’s primary (236220) other firm’s primary (236220)= bad App’s primary (236220) other firm’s secondary (238120)= good 13 CFR § (e)- firm’s management is not deemed to have utilized their individual eligibility, as stated in § (b). Visit us at
Community Development Corporation(CDC)13 CFR § (f)- concerns must possess potential for success, as demonstrated by: (f)(1)- having been in business for at least two years as evidenced by tax returns showing revenues generated in its primary industry; (f)(2)- managers has substantial managerial/technical expertise, the firm has a successful track record and adequate capital to sustain operations and carry out its business plan; and (f)(3)- CDC has a firm written agreement to support the firm’s operations and has the finances to do so. Visit us at
Questions? Questions relative to the 8(a) BD Program may be directed to Division of Program Certification & Eligibility at (202) Visit us at
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