One Year Extension of Participation in 8(a) Program
For companies who participate in the 8(a) program, under the 2021 National Defense Authorization Act (Section 869, enacted on January 1, 2021), the Appropriations Act (Section 330, enacted on December 27, 2020) and now an Interim final rule issued by the U.S. Small Business Administration (“SBA”), businesses who are participants in the 8(a) Business Development program on or before September 9, 2020, can extend their participation in the program for another year.
The SBA published an interim final rule incorporating this mandate on January 13, 2021 and is considered effective without advance notice. It is still subject to a 60-day comment period, but change is not anticipated. Major takeaways from the rule include:
- To be eligible for the one-year extension, you must have been in the 8(a) program as of September 9, 2020.
- You are not eligible for the one-year extension if you:
- Graduated or otherwise left the program prior to March 13, 2020 (pre-pandemic)
- Were terminated, early graduated, or voluntarily withdrew
- Were admitted into the program after September 9, 2020.
If you were an 8(a) participant between March 13, 2020 and the date the rule is published, the extension will be automatically applied unless you decline the extension.
Any 8(a) participant as of March 13, 2020 that has since graduated can seek the additional year of eligibility. You must notify the SBA of your intent to be readmitted to the program to gain the additional one year based on the date of completion of the program. The notification should be sent to SBA within 60 days after the rule was published and must certify that the concern continues to meet the eligibility requirements of the program.
Cherry Bekaert will send out an update as more information becomes public.