On the issue of continuing 8 (a) certification ans suspension due to business integrity issues, on August 14, 2013, the U.S. Small Business Administration (“SBA”) issued a Notice of Suspension to Wichita Tribal Enterprises, LLC (“WTE”).
The SBA’s Notice of Suspension from the 8 (a) certification program said that WTE could not participate in the 8 (a) Business Development program due to lack of WTE’s “clear lack of program eligibility” and “conduct indicating a lack of business integrity.”
SBA Must Meet Its Burden When Suspending 8(a) Certification Benefits Due to Business Integrity Issues
When suspending 8 (a) participants from the program, the SBA has the burden to demonstrate with adequate evidence that it is justified in suspending you from the program. The SBA need only prove that it had a “reasonable belief that a particular act or omission occurred, and that the act or omission requires suspension to protect the interests of the Government.”
To protect the Government’s interests the SBA only has to show provide information showing a clear lack of program eligibility or conduct indicating business integrity exists, including where you or one of the firm’s principals submitted false statements to the Federal Government.” 13 C.F.R. § 124.305(a).
You want to make sure that no matter the situation, you are truthful and forthcoming.
Failure to provide all information can get you suspended from the 8 (a) certification program
In the WTE case , the SBA determined that it WTE was ineligible for further 8a certification because it is “other than small” due to its affiliation with MRE Consulting Ltd. (“MRE”).
The SBA also claimed that WTE engaged in conduct indicating a lack of business integrity because WTE submitted “inaccurate or misleading information. Further, the SBA claimed that it believed WTE was outsourcing the services it provides on contracts to MRE in order to get WTE’s contracts completed. See more information about suspension and debarment.
Lessons Learned About Suspension From 8 (a) Certification and Business Integrity
Although the decision to suspend WTE from the 8(a) certification was based upon outdated information, the lesson here is that whether you are submitting your initial 8(a) certification application, or providing additional information during the nine-year period, you must be extra careful on what information you provide to the SBA.
Even if you do not provide all relevant information, the SBA can still try to suspend you from further 8 (a) Certification for misrepresentation. This is a tough problem to face.
- Remember, the SBA only has to show a reasonable belief that you are conducting business that can question business integrity.
- Always talk to your business development specialist ahead of time.
- The SBA does not give you legal advice about business integrity disputes but your chances of being suspended from the 8 (a) Program can be minimized.
For additional help with 8(a) certification suspension or terminations because business integrity disputes, call our SBA 8(a) certification lawyers at 1-866-601-5518 for a FREE INITIAL CONSULTATION.