Here’s a quick take on the Small Business Administration’s proposed changes to its regulations as they pertain to Alaska Native Corporations, Native Hawaiian Organizations, and Indian Tribes.  The primary NAICS takes more significance.  Joint ventures get tighter.  The mentor/protege program gets a lot of little changes.  And there’s some more reporting requirements.

1. The most important statement: “SBA believes that the 8(a) BD program is a much-needed and beneficial program, and that the tribal and ANC component of the program serves a valuable economic and community development purpose in addition to its business development purpose.  It is not SBA’s intent to shut down any component of the 8(a) program that truly assists the development of any small disadvantaged business.”
2. The biggest proposed change is to NAICS code requirements.  If an 8(a) exceeds its primary NAICS size for two consecutive years, it will be kicked out of the program.  The 8(a) can’t get a contract in the primary NAICS code of a sister company for the first two years of its life.
3. The 8(a) must perform 40% of the work in a joint venture and report to the SBA that it has met this requirement.  The joint venture can only get three contracts in a two year period.  If the joint venture is a separate legal entity, the legal entity must have its own employees.  The SBA must receive an addendum to the joint venture with each consecutive contract.  The mentor cannot be a subcontractor under the joint venture.
4. There’s a bunch of changes to the mentor/protege rules, but nothing earth-shattering.
5. The SBA’s Office of Inspector General may ask for a formal size determination.
6. The SBA is looking for advice on how to determine that Indian Tribes are economically disadvantaged.  Their solution will probably make it easier for Indian Tribes to certify 8(a) companies.
7. More reporting requirements.  ANCs must annually submit information to the SBA relating to funding cultural programs, employment assistance, jobs, scholarships, internships, subsistence activities, and other services to the affected community.
8. The San Francisco office will process all ANC 8(a) applications.
9. The SBA made a statement that ANCs, NHOs, and Indian Tribes must be treated consistently.
10. NHOs have been exempt from the dollar threshold requirement for DOD contracts.  The proposed regulations make this explicit.