Latinos Praise SBA's New Program Rules

WASHINGTON - The United States Hispanic Chamber of Commerce (USHCC), which represents the interests of nearly 3 million Hispanic-owned businesses and over 200 local chambers of commerce nationwide, applauds the Small Business Administration’s (SBA) leadership in amending the 8(a) program to better reflect and address the challenges that Hispanic-owned businesses face today.

On February 11th, the SBA published a Final Rule that will result in many significant changes and improvements in the operation of the SBA 8(a) Program. USHCC President & CEO, Javier Palomarez greeted the release of the new 8(a) Rules with enthusiasm saying: "These new Rules bring about important changes in the 8(a) program that will improve it and make it more fair by correcting a number of glaring deficiencies that will ultimately render the program more effective."

The SBA 8(a) program is a nine-year business development program for small disadvantaged businesses that provides program participants access to government contracting opportunities, allowing them to develop experience as prime contractors in the federal marketplace. In FY09, 8(a) firms received $18.6 billion in federal prime contract awards.

In releasing the new 8(a) Rules for the SBA, Administrator Karen Mills stated that "The changes in the Rules governing the 8(a) Program are designed to better ensure that the benefits flow to the intended recipients and help prevent waste, fraud and abuse." The new Rules become effective March 14th, 2011.

The new rules cover a variety of areas of the program, including:
• Joint Ventures - requiring the 8(a) firm to perform 40 percent of the work on each 8(a) joint venture contract, including those awarded under a Mentor/Protégé agreement;
• Economically Disadvantaged - providing clarification on economically disadvantaged as it relates to total assets, gross income, retirement accounts;
• Mentor-Protégé Program - adding consequences, ranging from stop-work orders to debarment, for a mentor who does not provide assistance to their protégé;
• Ownership and Control - providing flexibility on whether to admit into the 8(a) program companies owned by individuals with immediate family members who are current or former 8(a) participants;
• Tribally-Owned Firms - requiring firms owned by tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations to report benefits flowing back to their respective communities;
• Excessive Withdrawals - amending amount that is considered excessive as a basis for termination or early graduation from the 8(a) program;
• Business Size for Primary Industry - requiring that a firm's size status must remain small for its primary industry code during its participation in the 8(a) program.

About the United States Hispanic Chamber of Commerce
Founded in 1979, the USHCC actively promotes the economic growth and development of Hispanic entrepreneurs and represents the interests of nearly 3 million Hispanic-owned businesses in the United States that generate nearly $400 billion annually. It also serves as the umbrella organization for more than 200 local Hispanic chambers in the United States and Puerto Rico. Learn more at the USHCC's 21st Annual Legislative Summit in Washington, DC, March 28-30, 2011.