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On January 13, 2021, the Small Business Administration issued an interim final rule to implement the one-year extension of 8(a) Business Development status provided for in the National Defense Authorization Act for Fiscal Year 2021 and in the Consolidated Appropriations Act, 2021 (which we previously discussed here).

The rule contains crucial information on implementation of the extension, as well as explains how the rule will impact firms in different stages of their 8(a) lifecycles.

For starters, all firms in the 8(a) BD Program as of March 13, 2020 will receive the one-year extension, unless they were terminated, graduated early, or voluntarily withdrew prior to September 9, 2020.  Whether an entity is eligible to take advantage of the extension and how it is able to do so varies as follows:

Eligible for a one-year extension of 8(a) participation? Actions Needed to Be Taken to Benefit from the Extension
8(a) participants in the Program as of January 13, 2021 (that were admitted to the program on or before September 9, 2020) Yes

No.

 

The extension is automatic.

8(a) participants in the BD Program as of March 13, 2020 BUT graduated or otherwise left before January 13, 2021 Yes – for the period of time equal to one year from the date of the original expiration of the concern’s program term.

The extension is not automatic.

Such entities are required (1) to notify SBA of their intent to be readmitted by no later than March 15, 2021; and (2) certify that they continue to meet the applicable eligibility requirements as set forth in 13 C.F.R. §§ 124.101 through 124.111.

8(a) participants in the BD Program as of March 13, 2020 BUT were terminated or early graduated by SBA or elected to voluntarily withdraw or early graduate in lieu of termination No N/A
8(a) participants that graduated or otherwise left the 8(a) BD Program prior to March 13, 2020 No N/A
Participants that were admitted to the 8(a) BD Program after September 9, 2020 No N/A

The rule also clarifies how the extension will affect business activity targets.  Specifically, “any period of extension under the Act will be added to a Participant’s transitional stage of participation in the 8(a) BD program.”  As a reminder, in the transitional stage of the 8(a) Program (years five through nine), firms must generally achieve certain targets of revenue derived from sources other than sole source or competitive 8(a) contracts.  Here, SBA determined that firms receiving the extension (including firms in year nine of their term as of March 13, 2020), should generate 50 percent of their business activity from sources other than sole source or competitive 8(a) contracts.

This interim rule is immediately effective on January 13, 2021.  The deadline for submitting comments is March 15, 2021.

The extension is welcome relief for many firms, and will grant 8(a) participants an additional opportunity to utilize the Program’s significant benefits.

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Photo of Amy Laderberg O'Sullivan Amy Laderberg O'Sullivan

Amy Laderberg O’Sullivan is a partner in the firm’s Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and former chair of the firm’s Diversity Council. Her practice involves a mix of litigation, transactional work, investigations, and

Amy Laderberg O’Sullivan is a partner in the firm’s Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and former chair of the firm’s Diversity Council. Her practice involves a mix of litigation, transactional work, investigations, and counseling for corporate clients of all sizes and levels of experience as government contractors. On the litigation side, she has represented corporate clients in bid protests (agency level, GAO, ODRA, Court of Federal Claims, Court of Appeals for the Federal Circuit, as well as state and local bid protests in numerous jurisdictions), size and status protests before the U.S. Small Business Administration, claims litigation before the various Boards of Contract Appeals, Defense Base Act claims litigation at the Administrative Law Judge and Benefits Review Board levels, civil and criminal investigations, and she has been involved in complex commercial litigation.

Photo of Olivia Lynch Olivia Lynch

Olivia L. Lynch is a partner in Crowell & Moring’s Government Contracts Group in the Washington, D.C. office.

General Government Contracts Counseling. Olivia advises government contractors on navigating the procurement process, compliance and ethics, commercial item contracting, accessibility, supply chain assurance, and…

Olivia L. Lynch is a partner in Crowell & Moring’s Government Contracts Group in the Washington, D.C. office.

General Government Contracts Counseling. Olivia advises government contractors on navigating the procurement process, compliance and ethics, commercial item contracting, accessibility, supply chain assurance, and various aspects of state and local procurement law.

Photo of Michael Samuels Michael Samuels

Michael Samuels is a counsel in Crowell & Moring’s Government Contracts Group. His practice involves counseling and representing government contractors on a wide range of issues.

Photo of Zachary Schroeder Zachary Schroeder

Zachary Schroeder is an associate in Crowell & Moring’s Washington, D.C. office, where he practices in the Government Contracts Group.

Zach represents contractors in both litigation and counseling matters. His practice focuses on representing contractors in bid protests before the Government Accountability Office…

Zachary Schroeder is an associate in Crowell & Moring’s Washington, D.C. office, where he practices in the Government Contracts Group.

Zach represents contractors in both litigation and counseling matters. His practice focuses on representing contractors in bid protests before the Government Accountability Office (GAO), the U.S. Court of Federal Claims, and the Federal Aviation Administration’s Office of Dispute Resolution for Acquisition (ODRA). His practice also includes federal regulatory and ethics compliance, as well as various aspects of state and local procurement law, including representing contractors in size protests and affiliation matters. In the transactional context, Zach has performed government contracts diligence for government contractors in a range of industries.