Prior to October 2014, a specific provision of the FAR (FAR 19.1202) dealt with the use of SDS status as an assessment factor for determining the source. This provision was completely removed in October 2014 because it was enacted «exclusively» under the authority of the provisions of 10 U.S.C. §2323, which were found to be unconstitutional in Rothe. However, in removing this provision, the Federal Acquisition Regulatory Council (FAR Council) explicitly stated that «nothing. excludes an agency from the use of evaluation factors and sub-factors for subcontracting. Deputy of Defence, General Servs. Admin., & Nat`l Aeronautics & Space Admin., Federal Procurement Regulations; Federal Contracting Programs for Minority-Owned Small Businesses and Other Small Businesses: Final Rule, 79 Fed. Reg. 61746, 61746 (October 14, 2014). The FAR Council also noted that the SBA Regulations (i.e. 13 C.F.R.
§125.3(g)) «Authorize the use of small businesses as an evaluation factor or sub-factor for a supplier`s proposed approach to subcontracting to small businesses», including SDBs. Id. However, some group owners are considered economically disadvantaged. See 43 U.S.C. §1626(e)(1) (Alaska Native Corporations, which are considered economically disadvantaged); Application for Certification for Disadvantaged Small Businesses: Business-Owned Community Development Corporation (CDC), OMB Approval #3245-0317 However, social and economic deprivation is defined slightly differently for each program. Members of certain racial and ethnic groups are considered socially disadvantaged for the purposes of paragraph 8(a) and SDS programs, while women are also considered socially disadvantaged for the purposes of the SDS program. Similarly, the net worth of individuals must be $250,000 or less for entry to Program 8(a), while the net worth of newly appointed SDBs can be up to $750,000 and that of newly appointed SBDs can reach $1.32 million. Id. at p.
252. The Court also noted that the history of Program 8(a) prior to 1978 (when Congress specifically approved set-aside for disadvantaged small businesses) had shown that racially neutral methods were not sufficient to promote contracts with minority-owned small businesses. Id. at p. 255. The Court also noted that Program 8(a) was intended as a business development program and not as a means of «passing on contracts» to minority companies; whereas Section 8(a) of the Small Business Act expressly provides that grants may be awarded under Program 8(a) only if the SBA determines that «such action is necessary and appropriate»; and that the law require the president and the SBA to report annually to Congress on the program, ensuring that Congress has evidence that there is an «ongoing compelling need for the program.» Id. at 252-254. 2. In contrast, 8(a) is a business development program characterized by a tangible relationship with the SBA that provides advice and guidance to companies. This is not the case with the SDB and HUBZone programs. 8(a) certified companies are assigned a Business Opportunity Specialist (BOS), an employee of SBA, who advises and coaches them in commercial matters.
Members of these groups must file a signed notarized declaration of their membership in a group,73 as well as certain information about their economic situation.74 In addition, their net worth may not exceed $1.32 million, without their stake in DBE and their equity in their principal residence.75 Persons who are not members of certain groups must prove by a preponderance of proof that: that they are socially and economically disadvantaged.76 13 C.F.R. §124. 104(c)(2). The SBA regulations further provide that «a person is generally not considered to be economically disadvantaged if the fair market value of all of his or her assets (including his or her principal residence and the value of the applicant or participating business) exceeds $4 million for an applicant business and $6 million for the continued eligibility of paragraph 8(a) [program].» 13 C.F.R. §124.104(c)(4) (emphasis added). See 15 U.S.C. §§§§657b-657c (Small Business Programs Owned by Veterans); 15 United States C § 657f (programs for small businesses owned by disabled veterans); 41 U.S.C. §§§8501-8506 (Program for the «Blind and Severely Disabled»). The latter program is commonly known as the Javits-Wagner-O`Day Program (JWOD). Certification lasts three years; Companies can apparently be certified multiple times Originally, companies had to be certified by the SBA to qualify for SDS status. Since October 2008, companies can self-certify.
However, a business owner should carefully read the definitions and prepare a defense against potential challenges to the company`s SDS status. 13 F.R.C. § 124.520(d)(1). For the joint venture to be classified as «small», the entity referred to in paragraph 8(a) must be classified as «small» according to government procurement size standards and must not have received a combined total of competitive and exclusive purchase premiums of more than $100 million or any other applicable threshold in the case of exclusive purchase agreements awarded under the supervision of paragraph 8(a). See General 13 C.F.R. §124.519. Contract opportunities for disadvantaged small businesses are of constant interest to Congress members and committees due to the widespread role of small businesses in job creation. Recently, concern has also been expressed that the 2007-2009 recession disproportionately affected disadvantaged small businesses and that these businesses have been slow to recover. A separate report, CRS Report R43573, Federal Contracting and Subcontracting with Small Businesses: Legislation in the 113th Congress, by Kate M. Manuel, discusses recently passed and introduced legislation regarding the 8(a) and SDS programs. Since October 2008, small enterprises have been able to present their own status as disadvantaged small enterprises (SDS).
The qualifications for the program are similar to those for the 8(a) Business Development Program. A small business must be owned and controlled by at least 51% of one or more socially and economically disadvantaged people. African Americans, Hispanics, Asia-Pacific Americans, Subcontinental Asian Americans, and Native Americans are considered qualified. Other individuals may be eligible if they demonstrate that they are disadvantaged by a «preponderance of evidence.» All individuals must have a net worth of less than $750,000, excluding the equity of the business and principal residence. Successful applicants must also meet the size standards applicable to small businesses in their sector. One. Private property only. Group companies are treated slightly differently. .