On July 22, 2024, the U.S. Small Business Administration (SBA) published a Notice of Tribal Consultations (Notice) in the Federal Register related to a forthcoming proposed rulemaking affecting a number of SBA’s small business contracting programs. The Notice foreshadows some significant issues that SBA intends to address in the rulemaking, including potentially reducing or eliminating Mentor-Protégé Joint Ventures from receiving multiple award contracts (MACs).
The Tribal Consultations
SBA’s Notice states that the following consultations and listening sessions will be held:
- Aug. 19, 2024, Albuquerque, New Mexico
- Aug. 21, 2024, Oklahoma City, Oklahoma
- Aug. 27, 2024, Anchorage, Alaska
- Sept. 17, 2024, Honolulu, Hawaii (Listening Session)
The Notice provides that preregistration requests to attend and/or testify should be sent to Chequita Carter of SBA’s Office of Native American Affairs, U.S. Small Business Administration, 409 3rd Street SW, Washington, DC 20416; at Chequita.Carter@sba.gov; or via fax at 202.481.2177.
The Notice further provides that comments may be submitted by any of the following methods:
- E-mail to Jackson S. Brossy, Assistant Administrator, Office of Native American Affairs, U.S. Small Business Administration, at tribalconsulation@sba.gov.
- Mail (for paper, disk, or CD-ROM submissions) to Jackson S. Brossy, Assistant Administrator, Office of Native American Affairs, U.S. Small Business Administration, 409 3rd Street, SW, Washington, DC 20416.
SBA states that it intends to issue its Notice of Proposed Rulemaking (NPRM) prior to the consultations and listening session.
SBA Foreshadows Some Significant Issues That Will Be Addressed in the NPRM
The Notice summarizes a number of issues which will be addressed in the NPRM, including the following:
First, SBA states that the proposed rule is intended to clarify and improve several regulatory provisions, including those governing HUBZone contract eligibility.
Second, SBA states that the proposed rule would also make several changes to SBA’s size and 8(a) Business Development program regulations. In particular, the rule would consolidate and redesignate the separate recertification requirements for SBA’s size standards and 8(a) BD, HUBZone, Woman-Owned Small Business and Service-Disabled Veteran-Owned Small Business programs to a new section to reduce confusion and to ensure consistent application of the size and status recertification requirements.
Third, SBA is requesting input on how best to implement Executive Order 14112, signed by the President on Dec. 6, 2023, which directs agencies to help address the needs of Tribal Nations by, among other things, identifying and executing policy reforms to promote accessible, equitable, and flexible administration of federal funding and support programs for Tribal Nations to fulfill the federal government’s trust responsibilities. SBA is seeking comment on potential reforms, including to certain non-procurement programs, to reduce burdens and improve the accessibility of SBA’s programs for Tribal stakeholders, including: 1) current requirements for personal guarantees and a waiver of sovereign immunity for 7(a) loans to tribally owned business concerns and 2) the match funding requirement applicable to grants awarded by Native American-serving entrepreneurship organizations, like Small Business Development Centers and Community Development Financial Institutions. SBA also seeks Tribal input on the revised reporting structure of SBA’s Assistant Administrator for the Office of Native American Affairs (ONAA) reporting directly to the SBA Administrator.
Finally, and perhaps of greatest significance, SBA’s Notice announces that SBA is considering very significant changes to its Mentor-Protégé (MP) Joint Venture (JV) program. This follows SBA officials expressing concern in a variety of public meetings about MP JVs becoming dominant on larger MAC contracts, to the detriment of stand-alone small businesses seeking or holding those MACs.
Among the options SBA states it is considering is eliminating the affiliation exception for MP JVs for MACs that would make MP JVs ineligible for set-aside MACs. SBA also stated it would expect past performance and experience qualifications for standalone small businesses to be relaxed on MAC contracts to facilitate greater participation by such entities. Alternatively, SBA states that is considering allowing the affiliation exception for MP JVs only for MACs of five years or less.
Also related to Joint Ventures, SBA states that its proposed rule will address the applicability of the 10 percent HUBZone price evaluation preference for MP JVs involving HUBZone procurements and that SBA is considering eliminating the preference for such offerors. SBA states that it will seek comments on whether the price evaluation preference should continue to apply for such JVs.
