SBA 8(a) Certification
Facts
 Can a Participant change its ownership
or control and continue to perform an 8(a) contract, and can it transfer performance to
another firm?
(a) An 8(a) contract must be
performed by the Participant that initially received it unless a waiver is granted under
paragraph (b) of this section.
(1) An 8(a) contract, whether in the base or an option year, must be terminated for the
convenience of the Government if:
(i) One or more of the individuals upon whom eligibility for the 8(a) BD program was based
relinquishes or enters into any agreement to relinquish ownership or control of the
Participant such that the Participant would no longer be controlled or at least 51% owned
by disadvantaged individuals; or
(ii) The contract is
transferred or novated for any reason to another firm.
(2) The procuring activity may not assess repurchase costs or other damages against the
Participant due solely to the provisions of this section.
(b) The SBA Administrator may waive the requirements of paragraph (a)(1) of this section
if requested to do so by the 8(a) contractor when:
(1) It is necessary for the owners of the concern to surrender partial control of such
concern on a temporary basis in order to obtain equity financing;
(2) Ownership and control of
the concern that is performing the 8(a) contract will pass to another Participant, but
only if the acquiring firm would otherwise be eligible to receive the award directly as an
8(a) contract;
(3) Any individual upon whom
eligibility was based is no longer able to exercise control of the concern due to physical
or mental incapacity or death;
(4) The head of the procuring agency, or an official with delegated authority from the
agency head, certifies that termination of the contract would severely impair attainment
of the agency's program objectives or missions; or
(5) It is necessary for the
disadvantaged owners of the initial 8(a) awardee to relinquish ownership of a majority of
the voting stock of the concern in order to raise equity capital, but only if--
(i) The concern has graduated from the 8(a) BD program;
(ii) The disadvantaged owners
will maintain ownership of the largest single outstanding block of voting stock (including
stock held by affiliated parties); and
(iii) The disadvantaged owners
will maintain control of the daily business operations of the concern.
(c) The 8(a) contractor must request a waiver in writing prior to the change of ownership
and control except in the case of death or incapacity. A request for waiver due to
incapacity or death must be submitted within 60 days after such occurrence. The
Participant seeking to change ownership or control must specify the grounds upon which it
requests a waiver, and must demonstrate that the proposed transaction would meet such
grounds.
(d) SBA determines the
eligibility of an acquiring Participant under paragraph (b)(2) of this section by
referring to the items identified in Sec. 124.507(b)(2) and deciding whether at the time
of the request for waiver (and prior to the transaction) the acquiring Participant is a
responsible and eligible concern with respect to each contract for which a waiver is
sought. As part of the waiver request, the acquiring firm must certify that it is a small
business for the size standard corresponding to the SIC code assigned to each contract for
which a waiver is sought.
(e) Anyone other than a procuring agency head who submits a certification regarding the
impairment of the agency's objectives under paragraph (b)(4) of this section, must also
certify delegated authority to make the certification.
(f) In processing a request
for a waiver under paragraph (b)(2) of this section, SBA will treat a transfer of all a
Participant's operating assets to another Participant the same as the transfer of an
ownership interest, provided the Participant that transfers its assets to another eligible
Participant:
(1) Voluntarily graduates from the 8(a) BD program; and
(2) Ceases its business
operations, or presents a plan to SBA for its orderly dissolution.
(g) A concern performing an 8(a) contract must notify SBA in writing immediately upon
entering into an agreement or agreement in principle (either oral or written) to transfer
all or part of its stock or other ownership interest or assets to any other party. Such an
agreement could include an oral agreement to enter into a transaction to transfer
interests in the future.
(h) The Administrator has
discretion to decline a request for waiver even though legal authority exists to grant the
waiver.
(i) The 8(a) contractor may appeal SBA's denial of a waiver request by filing a petition
with OHA pursuant to part 134 of this title within 45 days of the date of service of the
Administrator's decision.
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