The 8a company is utilizing the services of their affilated company during performance of the construction contract. The 8a company has submitted payrolls using the affiliated companies employees. The 8a company also has the construction superintent who is an employee of the affilated company. Is it allowable to to interchange personnel as though the company is one entity?
According to 13 CFR 124.1, "the purpose of the 8(a) Business Development program is to assist eligible small disadvantaged business concerns to compete in the American economy through business development." As such, there are stringent eligibility requirements delineated in the CFR (124.101, 124.105). In addition, the FAR (19.8), DFARS (219.8) and DFARS PGI (219.8) include important information relative to the execution of the 8(a) program and 8(a) contracts within DoD.
From the background information you have provided, it sounds as if the affiliation relationship that you cite was considered in the original determination of the specific 8(a) company's size standard for the procurement that you are concerned about. However, it is important to ensure that a business who has been granted acceptance into the 8(a) BD program continues to meet eligibility requirements and 13 CFR 124.112 explains the criteria that a business must meet to remain eligible in the 8(a) BD program. Specifically, the CFR explains that "in order for a concern to remain eligible for the 8(a) BD program participation, it must continue to meet all eligibility criteria contained in 124.101 through 124.108" and "The concern must inform SBA in writing of any changes in circumstances which would adversely affect its program eligibility, especially economic disadvantage and ownership and control." 13 CFR 124.112(b) explains the annual submission requirements to determine continued eligibility. If in fact, the 8(a) company that you are concerned about is not in compliance with the regulations due to their affiliation(s), the documentation required to be provided under this review should bring this information to light.
Additional information can be obtained from the SBA directly by contacting the United States Small Business Administration, Office of Business Development, 409 3rd Street SW, Washington DC, 20416 or by visiting http://www.sba.gov/content/8a-business-development.
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