Increase in 8(a) Income and Net Worth Eligibility Standards Likely in 2020

 
07/15/2019

By Robin James,

The SBA weighing a possible rule change in the 8(a) program. Below is the likely change:

 

 

Current

Proposed

Net worth

$250,000

Excluding:  primary residence, business concern applying for 8(a), and personal residence

$750,000

Excluding:  primary residence, business concern applying for 8(a), and personal residence

Income (AGI)

$250,000 average past three years.  (with some exclusions)

$350,000 average past three years.  (with some exclusions)

Assets

$4,000,000

Includes personal residence and value of the business.

$6,000,000
Includes personal residence and value of the business.

 

Logic for Rule Change
This rule change is being brought about because the SBA wants congruity between the EDWOSB (Economically Disadvantaged Woman Owned Small Business Certification) and the 8(a) Certification. This was brought about by the SBA’s review of the WOSB (Woman Owned Small Business) self-certification process and control deficiencies found in that program.
This congruity avoids the “the anomaly of a concern applying for EDWOSB and 8(a) BD status simultaneously and being found to be economically disadvantaged for EDWOSB purposes, but denied eligibility for the 8(a) BD program based on not being economically disadvantaged.”

 

Original Logic
The original logic for the limits on net worth, income and assets was to keep the top 1% of income and wealth holders out of the 8(a) program. The thought was that these individuals had already overcome any economic disadvantage they suffered due to discrimination or gender bias. Therefore, this rule change is a change in this thinking at the SBA.

 

If the rule is approved, the dollar amounts for initial 8(a) economic disadvantage eligibility would increase quite a bit. This would make more people economically eligible and increase the popularity of the 8(a) program. This rule could likely go into effect in January of 2020.

 

 

If you are wondering how each of these business certifications could be an advantage to help expand your business through federal contracting, give us a call, as we have the expertise in evaluating your firm's potential.  You could reach me at 859-572-4482.

SOURCE:
Advance GSA/8a



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