Federal Programs for Small Business

Cohen Mohr LLP specializes in advising clients about the various Federal government assistance opportunities available to small and small disadvantaged businesses, including total and partial small business set-asides and the Small Business Administration’s 8(a) Business Development Program (the “8(a) Program”), the Small Disadvantaged Business Program (the “SDB Program”), the Historically Underutilized Business Zone Program (the “HUBZone Program”), and the Service-Disabled Veteran-Owned Small Business Concern Program (the “SDVO SBC Program”). Cohen Mohr also advises women-owned small businesses (“WOSB”) about the requirements for self-certifying as such. For businesses interested in applying to SBA’s Programs, or for participants already in the above Programs, our attorneys can guide you through the most current regulations and how recent changes might impact your company.

SBA PROGRAMS GENERALLY

Cohen Mohr advises clients, both large and small, regarding SBA’s size standards. For example, large businesses often call on Cohen Mohr to assist them in drafting their subcontracting plans and regarding compliance with its small business requirements. We also receive numerous inquiries regarding joint venture opportunities for large and small businesses, including 8(a) and HUBZone companies.

Cohen Mohr LLP’s attorneys are knowledgeable about, and remain up-to-date on changes made to, SBA’s size regulations, which are used to determine size by all Federal agencies. In 2004, SBA made significant changes to its size regulations, which may impact your company. Some of the major changes implemented by the new regulations include the following:

• The newly organized concern rule is restored as an independent basis of affiliation between two companies under SBA’s size regulations. Instead of considering whether a company is newly organized as one of several relevant issues under a totality of circumstances test, SBA is now permitted to rely exclusively on the newly organized concern rule in concluding that two companies are affiliated. Under the newly organized concern rule, affiliation may be found where former officers, directors, principal stockholders, managing members, or key employees of one company organize a new company in the same or related industry or field of operation, and serve as the new company’s officers, directors, principal stockholders, managing members, or key employees, and the one company is furnishing or will furnish the new company with contracts, financial or technical assistance, indemnification on bid or performance bonds, and/or other facilities, whether for a fee or otherwise.
• Qualified joint venture (“JV”) partners are now permitted to enter into a single JV Agreement for multiple opportunities. However, the JV can not submit more than three offers over a two year period. Additionally, the JV cannot carry out more than three specific or limited–purpose business ventures.
• The nonmanufacturer rule no longer requires that nonmanufacturers sell their products to the general public. Instead, the nonmanufacturer must only be engaged in the retail or wholesale trade and normally sell the type of item being supplied.
• At the time that a novation or change of name agreement is executed, the new entity must submit a written self-certification that it is small to the procuring agency.
• The new regulations finally correct the conflict between SBA’s size regulations, the 8(a) joint venture regulations, and the 8(a) mentor-protégé regulations as they relate to JVs between an 8(a) approved mentor and its protégé. They now consistently provide that a JV between an 8(a) approved mentor and its protégé will be deemed small if the protégé is itself small. The 8(a) mentor-protégé regulations no longer state that both the mentor and protégé must be small in order for the JV to be considered small. As such, the regulations now reflect SBA’s practice of allowing large businesses to act as 8(a) mentors.

THE 8(A) BUSINESS DEVELOPMENT PROGRAM

Cohen Mohr provides advice to small disadvantaged businesses interested in applying to SBA’s 8(a) Business Development Program (the “8(a) Program”). We assist clients in understanding the eligibility requirements for the 8(a) Program and we advise them regarding the 8(a) application process and requirements. We also appeal requests for reconsideration for businesses whose 8(a) applications have been denied by SBA.

Cohen Mohr represents a number of small disadvantaged businesses that participate in the SBA’s 8(a) Program. We advise our clients regarding continued eligibility requirements. We review the ongoing submissions by 8(a) participants to SBA for compliance. We provide advice to clients regarding the Mentor-Protégé Program, which is available to 8(a) participants. And, we prosecute appeals before SBA’s Office of Hearings and Appeals (“OHA”), including NAICS and size appeals.

Cohen Mohr LLP’s attorneys are knowledgeable about, and remain up-to-date on changes made to, SBA’s regulations as they relate to the 8(a) Program. In 2004, SBA made significant changes to its size regulations, which included changes to the Mentor-Protégé Program for 8(a) participants. In changes made to SBA’s size regulations during 2004, for example, SBA made clear that despite an approved 8(a) mentor/protégé relationship, a mentor and its protégé may still be affiliated for size purposes. (The general rule is that a mentor and its protégé are not affiliated for size purposes based on the mentor-protégé relationship.) The new regulations indicate that SBA, however, may affiliate a mentor and its protégé for reasons other than the mentor/protégé relationship itself. In the preamble to the new regulations, SBA explains that “other reasons” include assistance (1) that is not specifically identified in the mentor/protégé regulations as the type of assistance to be provided by a mentor to its protégé; and (2) that SBA’s size regulations identify as an indicia of affiliation. As a result, a mentor and its protégé must carefully evaluate the type(s) of assistance that the mentor can provide to its protégé and disclose that assistance to SBA in the mentor/protégé agreement, thereby making the drafting of the agreement of critical importance.

THE HUBZONE PROGRAM

Cohen Mohr advises clients regarding SBA’s Historically Underutilized Business Zone Program (the “HUBZone Program”). The HUBZone Program provides Federal contracting opportunities for qualified small businesses located in economically distressed urban and rural communities designated by SBA. The Program focuses on job creation and investment in HUBZone communities. If your company is located in a HUBZone or if you are interested in finding out whether that is the case, Cohen Mohr’s attorneys can help you. We also can advise you regarding the HUBZone’s eligibility requirements and guide you through the application and certification process.

Cohen Mohr’s attorneys remain up-to-date regarding changes to the HUBZone regulations. In May 24, 2004, SBA amended the HUBZone regulations that had been in effect since June 11, 1998. Some of the changes include the following:

• SBA no longer requires that HUBZone companies recertify as HUBZone companies on an annual basis. Instead, SBA has changed the recertification period from an annual recertification to every three years.
• SBA no longer permits a HUBZone company to joint venture with 8(a) companies or women-owned small businesses for HUBZone contracts. Under the current regulations, SBA allows a HUBZone company to joint venture only with other qualified HUBZone small businesses for HUBZone contracts.

THE SDB PROGRAM

Cohen Mohr is experienced in assisting clients become certified under the SBA’s Small Disadvantaged Business (“SDB”) Program. Under regulations issued by SBA, SDBs must be officially certified by SBA to participate in the SDB Program and to bid on contracts reserved for SDBs. Self-certification is not acceptable. To be certified as an SDB, a company must meet certain criteria. The firm must be:

• Unconditionally owned by individuals who are both socially and economically disadvantaged;
• Controlled by such disadvantaged individuals; and
• Small under SBA’s applicable size standards.

Cohen Mohr LLP can advise your small business regarding these requirements and assist you in seeking certification as an SDB.

THE SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS CONCERN PROGRAM

Cohen Mohr’s attorneys are knowledgeable about SBA’s newly established Service-Disabled Veteran-Owned Small Business Concern Program (the “SDVO SBC Program”). This Program became effective on December 16, 2003, however, SBA only recently issued regulations implementing the Program on May 5, 2004. The new regulations were issued in an Interim Final Rule and were published before public comment under the good cause exception to the standard rulemaking procedures. Cohen Mohr’s attorneys can advise you regarding these regulations and any future amendments to them.

Congress has indicated that the SDVO SBC Program has equal status to the 8(a) Business Development and HUBZone Programs. Agencies are permitted to restrict competitions to SDVO small businesses. Contracting officers may award sole source or set-aside contracts to qualified SDVO small businesses. At this time, however, the SDVO SBC Program does not entitle SDVO small businesses to any evaluation preferences in unrestricted procurements.