13 CFR 124.108 — Other Eligibility Requirements for Individuals or Businesses (8(a) BD Program)

Summary

Section 124.108 sets other eligibility requirements for individuals or businesses in the 8(a) BD program. The first provision requires the applicant or Participant and all its principals to have good character, and says debarred or suspended concerns are ineligible for admission. It says SBA will deny an application if SBA determines the applicant knowingly submitted false information, and the matter will be referred to SBA's Office of Inspector General for review. A later provision provides one-time eligibility: once a concern or disadvantaged individual has participated in the program, neither will be eligible again. Brokers are ineligible, and a concern is ineligible if the concern or any of its principals has failed to pay significant financial obligations owed to the Federal Government.

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§ 124.108 What other eligibility requirements apply for individuals or businesses?

( a ) Good character. The applicant or Participant and all its principals must have good character.

( 1 ) Violations of any of SBA's regulations may result in denial of participation in the 8(a) BD program. The AA/BD will consider the nature and severity of the violation in making an eligibility determination.

( 2 ) Debarred or suspended concerns or concerns owned by debarred or suspended persons are ineligible for admission to the 8(a) BD program.

( 3 ) An applicant is ineligible for admission to the 8(a) BD program if the applicant concern or a proprietor, partner, limited liability member, director, officer, or holder of at least 20 percent of its stock, or another person (including key employees) with significant authority over the concern lacks business integrity as demonstrated by conduct that could be grounds for suspension or debarment;

( 4 ) If, during the processing of an application, SBA determines that an applicant has knowingly submitted false information, regardless of whether correct information would cause SBA to deny the application, and regardless of whether correct information was given to SBA in accompanying documents, SBA will deny the application. If, after admission to the program, SBA discovers that false information has been knowingly submitted by a firm, SBA will initiate termination proceedings and suspend the firm under §§ 124.304 and 124.305 . Whenever SBA determines that the applicant submitted false information, the matter will be referred to SBA's Office of Inspector General for review.

( b ) One-time eligibility. Once a concern or disadvantaged individual upon whom eligibility was based has participated in the 8(a) BD program, neither the concern nor that individual will be eligible again.

( 1 ) An individual who claims disadvantage and completes the appropriate SBA forms to qualify an applicant has participated in the 8(a) BD program if SBA approves the application.

( 2 ) Use of eligibility will take effect on the date of the concern's approval for admission into the program.

( 3 ) An individual who uses his or her one-time eligibility to qualify a concern for the 8(a) BD program will be considered a non-disadvantaged individual for ownership or control purposes of another applicant or Participant. The criteria restricting participation by non-disadvantaged individuals will apply to such an individual. See §§ 124.105 and 124.106 .

( 4 ) When at least 50% of the assets of a concern are the same as those of a former Participant, the concern will not be eligible for entry into the program.

( 5 ) Participants which change their form of business organization and transfer their assets and liabilities to the new organization may do so without affecting the eligibility of the new organization provided the previous business is dissolved and all other eligibility criteria are met. In such a case, the new organization may complete the remaining program term of the previous organization. A request for a change in business form will be treated as a change of ownership under § 124.105(i) .

( c ) Wholesalers. An applicant concern seeking admission to the 8(a) BD program as a wholesaler need not demonstrate that it is capable of meeting the requirements of the nonmanufacturer rule for its primary industry classification.

( d ) Brokers. Brokers are ineligible to participate in the 8(a) BD program. A broker is a concern that adds no material value to an item being supplied to a procuring activity or which does not take ownership or possession of or handle the item being procured with its own equipment or facilities.

( e ) Federal financial obligations. A business concern is ineligible for admission to or participation in the 8(a) BD program if either the concern or any of its principals has failed to pay significant financial obligations owed to the Federal Government, including unresolved tax liens and defaults on Federal loans or other Federally assisted financing. However, a small business concern may be eligible if the concern or the affected principals can demonstrate that they are current on an approved repayment plan or the financial obligations owed have been settled and discharged/forgiven by the Federal Government.

[ 63 FR 35739 , 35772 , June 30, 1998, as amended at 74 FR 45753 , Sept. 4, 2009; 76 FR 8255 , Feb. 11, 2011; 81 FR 48580 , July 25, 2016; 88 FR 26204 , Apr. 27, 2023; 89 FR 102489 , Dec. 17, 2024]

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