Did you know that SBA can suspend an 8(a) business from receiving any program support to include receiving any new 8(a) sole source contracts? Yes, they can. This program support extends to the CEO level education that SBA provides to your business. Why would SBA suspend a business? Well, that is what we are going to discuss today! The reason SBA would suspend a business is if SBA feels it is in the best interests of the Federal Government.
When is a Suspension Issued?
SBA will initiate a suspension when they see a clear program eligibility issue. Or when the 8(a) business has shown a clear lack of business integrity. An example of lack of business integrity would be if the business submitted false information to the Federal Government. Also SBA will take this action when the business has submitted false information to SBA.
How Will the 8(a) Business Be Notified?
According to the Code of Federal Regulations, SBA will send a certified letter, return receipt requested to the last known address. However, SBA has updated its Standard Operating Procedure and they now allow for notification through email as long as a return read receipt is available. Another important fact is effective date of the suspension is the date on the letter. Now let’s find out what is in the letter.
What Must the Suspension Letter Contain?
SBA cannot suspend a 8(a) business unless they list all the reasons. They can not list just one or two facts but must every single fact in the letter. In addition, the letter must state that the suspension will remain in effect until SBA has finished their investigation. SBA will lift the suspension when they determine that the business is still eligible, the business has been terminated or for a specific time period.
The letter must also contain a statement that the business is no longer eligible to receive 8(a) sole source and 8a competitive contracts. However, if the head of the procuring agency states the pending contract award is in the best interest of the federal government and SBA is in agreement an award may happen. Now, this suspension does not affect any current 8(a) contracts that the business is performing.
In addition to the above the letter must state that the business must complete all current contracts. As far as the geographical area where the suspension is in place. This suspension is not restrict just to the local area but is in effect nationally. Lastly, the effective date of the suspension is the date on the letter. When SBA lifts the suspension for the business it will resume its program term.
Can an 8(a) firm Appeal the Suspension?
Yes, an 8(a) business may appeal the suspension. They must file a petition to SBA’s Office of Hearings and Appeals (OHA) within 45 days from the date of the suspension.The Administrative Law Judge will be the one to hear the appeal. The appeal may not be timely and SBA’s Associate Administration for Business Development may make a final determination of termination.
Can OHA here both the suspension and termination? Yes, if SBA requests for both the suspension and termination to be heard at the same time. The business does not have this option. The opinion of the OHA Judge will be final if it is made if it is timely. If the OHA Judge is not timely and the Associate Administrator for Business Development makes a final determination then that determination stands.
SBA has the burden of proof for both the suspension and termination.
Why Issue a Suspension?
SBA may issued a suspension when the participant is no longer eligible for the program. An example would be if a business changed ownerships and/or control without SBA prior approval. Another example, when service members must report to active duty . SBA may issue the suspension on behalf of the service member. A business owner may also request a suspension when located in a disaster zone. For example, after a hurricane a business can request a suspension so they can tend to the immediate needs of their family. Lastly, a business owner may request a suspension when there are a lapse of appropriations for a Government Agency or Agencies.
How can the Suspension Be Removed?
If a business owner has requested the suspension they must let SBA know when they wish to come back into the program. The amount of suspended time will be added to the business’s program term. For businesses pending termination it will depend on the outcome of the termination.. The amount of time spent in suspension will be added to the end of their program term.
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