[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR124.1008]
[Page 286-288]
ASSISTANCE
CHAPTER I--SMALL BUSINESS ADMINISTRATION
PART 124--8(A) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS DETERMINATIONS--Table of Contents
Subpart B--Eligibility, Certification, and Protests Relating to Federal
Small Disadvantaged Business Programs
Sec. 124.1008 How does a firm become certified as an SDB?
Any firm may apply to be certified as an SDB. SBA's field offices
will provide further information and required application forms to any
firm interested in SDB certification. In order to become certified as an
SDB, a firm must apply to SBA or, if directed by SBA, to a Private
Certifier. The application must include evidence demonstrating that the
firm is owned and controlled by one or more individuals claiming
disadvantaged status, along with certifications or narratives regarding
the disadvantaged status of such individuals. See paragraph (e)(1) of
this section. The firm also must submit information necessary for a size
determination. See Sec. 121.1008. Current 8(a) BD Participants do not
need to submit applications for SDB status. These concerns automatically
qualify as SDBs by virtue of their status as 8(a) BD concerns. An 8(a)
Participant's continuing eligibility as an SDB will be reviewed as part
of the concern's 8(a) annual review.
(a) Filing an SDB application. (1) An interested firm must first
submit a complete application to SBA's Assistant Administrator for Small
Disadvantaged Business Certification and Eligibility (AA/SDBCE), Small
Business Administration, 409 3rd Street, SW, Washington, DC 20416, or to
a specific SBA field office or an approved Private Certifier if directed
by SBA.
(2) The firm must identify which individual(s) or entities are
claiming disadvantaged status.
(b) Required forms. Each firm seeking to be certified as an SDB must
submit those forms and attachments required by SBA when applying for
admission to the 8(a) BD program. These forms and attachments may
include, but not be limited to, financial statements, Federal personal
and business tax returns and personal history statements. The
application package may be in the form of an electronic application.
(c) Application processing. (1) SBA or a Private Certifier will
advise each applicant generally within 15 days after the receipt of an
application whether the application is complete and suitable for
evaluation and, if not, what additional information or clarification is
required. If the application is not complete, SBA or the Private
Certifier will return the application to the firm, and will notify the
firm that it may reapply when its application is complete.
(2) The burden is on the applicant to demonstrate that those
individuals claiming disadvantaged status own and control the concern.
(d) Ownership and control decision. SBA or a Private Certifier will
determine whether those individuals claiming disadvantaged status own
and control the applicant firm within 30 days of receipt of a complete
application package, whenever practicable..
(1) Where a Private Certifier determines ownership and control, the
Private Certifier will issue a written decision as to whether the
applicant is owned and controlled by the individuals identified as
claiming disadvantaged status.
(i) If the Private Certifier finds that the applicant is owned and
controlled by the individuals claiming disadvantaged status, the Private
Certifier will forward the application to SBA along with a copy of its
ownership and control determination and the information required by
paragraph (e)(2)(ii) of this section, where appropriate.
(ii) If the Private Certifier finds that the applicant is not owned
and controlled by the individuals claiming disadvantaged status, its
decision must state the specific reasons for the finding, and inform the
applicant of its right to appeal the decision to SBA pursuant to
Sec. 124.1009.
(2) Where SBA determines ownership and control, SBA will first
determine whether the applicant is owned and controlled by the
individual(s) claiming to be disadvantaged. If SBA determines that the
applicant is not owned and controlled by the individual(s) claiming
disadvantaged status, SBA will issue a written decision addressing only
the ownership and control issues. If SBA determines that the applicant
is owned and controlled by the individual(s) claiming disadvantaged
status, SBA will issue a single written decision as to whether the
applicant qualifies as
[[Page 287]]
an SDB. Such a determination will include the ownership and control of
the firm, the size status of the firm, and the disadvantaged status of
those individuals claiming to be disadvantaged.
(3) In its sole discretion, SBA may analyze and determine whether a
firm is owned and controlled by one or more individuals claiming
disadvantaged status notwithstanding the availability of a Private
Certifier to make such a decision.
(4) SBA reserves the right to re-evaluate an approved decision on
ownership and control by a Private Certifier in a case where it has
credible evidence that the Private Certifier has substantially
disregarded the eligibility criteria.
(e) Disadvantaged determination. Once a concern receives a decision
finding that it is owned and controlled by those individuals or entities
claiming disadvantaged status (either through an initial determination
or on appeal), SBA will determine whether the other eligibility criteria
are met, and, if so, will include the SDB on the SBA-maintained list of
qualified SDBs. SBA will make this determination within 30 days of
receiving an SDB application, if practicable.
(1) Members of designated groups. (i) Those individuals claiming
disadvantaged status that are members of the same designated groups that
are presumed to be socially disadvantaged for purposes of SBA's 8(a) BD
program (see Sec. 124.103(b)) are presumed to be socially and
economically disadvantaged for purposes of SDB certification. These
individuals must represent that they are members of one of the
designated groups, that they are identified as a member of one of the
designated groups, that their net worth is less than $750,000 after
taking into account the exclusions set forth in Sec. 124.104(c)(2), and
that they are citizens of the United States.
(ii) Absent credible evidence to the contrary, SBA may accept these
representations as true and certify the firm as an SDB.
(2) Individuals not members of designated groups. (i) Each
individual claiming disadvantaged status who is not a member of one of
the designated groups must submit a statement identifying personally how
his or her entry into or advancement in the business world has been
impaired because of personally specific factors (see Sec. 124.103(c)),
and how his or her ability to compete in the free enterprise system has
been impaired due to diminished capital and credit opportunities (see
Secs. 124.103(c) and 124.104).
(ii) Where a Private Certifier determines ownership and control, the
Private Certifier must also review the disadvantaged status submission
and any other required information, and send to SBA the following:
(A) An executive summary and analysis of the disadvantaged status
submission;
(B) The application and all supporting documentation; and
(C) A certification that the application is complete and suitable
for evaluation.
(3) Concerns owned by tribes, ANCs, CDCs, or NHOs: SBA will process
SDB applications from concerns owned and controlled by tribes, ANCs,
CDCs, or NHOs in the same way as those from concerns owned by
individuals who are members of designated groups.
(f) SDB Determination. (1) If SBA's AA/SDBCE determines that the
individual(s) claiming disadvantage are disadvantaged and other
eligibility criteria are met, he or she will certify the firm as an SDB.
(2) If SBA's AA/SDBCE determines that one or more of the individuals
claiming to be disadvantaged is not disadvantaged and their
disadvantaged status is required to establish disadvantaged ownership
and control of the applicant, or any of the other eligibility criteria
are not met, he or she will reject the firm's application for SDB
certification. The AA/SDBCE will issue a written decision setting forth
SBA's reasons for decline.
(3) Pursuant to part 134 of this title, a firm may appeal to OHA the
AA/SDBCE's decision that one or more of the individuals claiming
disadvantaged status is not disadvantaged, or, where SBA determines
ownership and control, that those claiming disadvantaged status do not
own and control the applicant. (See Sec. 124.1009 for appeals from
decisions by Private Certifiers.)
[[Page 288]]
(i) The firm must serve SBA's Associate General Counsel for General
Law with a copy of the appeal.
(ii) OHA will determine whether SBA's decision in either case was
arbitrary, capricious, or contrary to law. OHA's review is limited to
the facts that were before SBA at the time of its decision and any
arguments submitted in or in response to the appeal. OHA will not
consider any facts beyond those that were already presented to SBA
unless the administrative judge determines that manifest injustice would
occur if the appeal were limited to the record.
(4) A firm may also request a formal size determination pursuant to
part 121 of this title where SBA finds that the firm is not small.
(g) Current 8(a) BD program participants. Any firm that is currently
a Participant in SBA's 8(a) BD program need not seek an ownership and
control determination or apply to SBA for a separate certification as an
SDB. SBA will certify current 8(a) BD Participants as SDBs, and
automatically include them on the list of qualified SDBs.
(h) 8(a) BD graduates. SBA will automatically certify a firm that
has graduated from the SBA's 8(a) BD program to be an SDB, provided SBA
determined that the firm continued to be eligible for the 8(a) BD
program as part of an annual review within the last three years. (See
Sec. 124.1014(b)).
(i) Certification by DOT recipient. If a firm applying for SDB
certification has a current, valid certification as a disadvantaged
business enterprise (DBE) from a Department of Transportation (DOT)
recipient, SBA may adopt the DBE certification as an SDB certification
when determined by the AA/SDBCE or designee to be appropriate.