PART 130—SMALL BUSINESS DEVELOPMENT CENTERS Authority: 15 U.S.C. 634(b)(6), 648, and 648 note. Source: 60 FR 31056, June 13, 1995, unless otherwise noted. § 130.100 Introduction. (a) Objective. (b) Adoption of amended references. [88 FR 76639, Nov. 7, 2023] § 130.110 Definitions. Accreditation process. Applicant organization. Application. Area of service. Associate Administrator/Entrepreneurial Development AA/ED Associate Administrator/Small Business Development Centers AA/SBDC Budget period. Cash match. Clearinghouse. Client. Cognizant agency. Cooperative agreement. (1) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or passthrough entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal Government or pass-through entity's direct benefit or use. (2) Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award. (3) The term does not include: (i) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or (ii) An agreement that provides only: (A) Direct United States Government cash assistance to an individual; (B) A subsidy; (C) A loan; (D) A loan guarantee; or (E) Insurance. (4) Is a negotiated legal agreement between SBA and a recipient organization containing the terms and conditions under which SBA provides Federal funds for the performance of SBDC activities. Cosponsorship. Counseling. Counseling record. Direct costs. Dispute. District Office. Grants and Cooperative Agreement Appeals Committee. Grants Management Specialist. In-kind contributions. Indirect costs. Insular areas. Key personnel. Lead Center. Lobbying. Matching funds. Notice of funding opportunity. Notice of non-renewal. Notice of suspension. Notice of termination. Office of Small Business Development Centers (OSBDC). Overmatched amount. Prior approval. Program Announcement. Program funds. Program income. Program Manager. Program performance data. Project Officer. Project period. Proposal. Recipient organization. Recognized Organization. SBDC Director. SBDC Lead Center Director. SBDC network. SBDC satellite location. SBDC service center. SBDC Service Center Director. SBDC service providers. Specialized services. e.g., Sponsoring SBDC organizations. Training. Training record. [60 FR 31056, June 13, 1995, as amended at 88 FR 76639, Nov. 7, 2023; 89 FR 17717, Mar. 12, 2024] § 130.200 Eligible entities. The following entities are eligible to operate an SBDC network: (a) A public or private institution of higher education; (b) A land-grant college or university; (c) A college or school of business, engineering, commerce or agriculture; (d) A community or junior college; (e) A Women's Business Center operating pursuant to section 29 of the Small Business Act (15 U.S.C. 656); (f) The Commonwealth of the Northern Mariana Islands SBDC must have its principal office located in the Commonwealth of the Northern Mariana Islands (CNMI) and must: (1) Be a CNMI government or agency; (2) Be a regional entity; (3) Be a CNMI-chartered development, credit, or finance corporation; (4) Be an institution of higher education (including but not limited to any land-grant college or university, any college or school of business, engineering, commerce, or agriculture, community college or junior college); (5) Be a current SBA Women's Business Center (WBC); or (6) Be any entity formed by two or more of the entities in paragraphs (f)(1) through (5) of this section; (g) Any entity which was operating as a recipient organization as of December 31, 1990; or (h) Any entity operating continually as a recipient organization on or before December 31, 1990. [60 FR 31056, June 13, 1995, as amended at 88 FR 76642, Nov. 7, 2023] § 130.300 Small Business Development Centers (SBDCs). The Small Business Development Center Program is established under the statutory authority of the Small Business Act (15 U.S.C. 648) and administered through cooperative agreements issued to recipient organizations. [88 FR 76642, Nov. 7, 2023] § 130.310 Area of service. (a) The AA/SBDC will designate, in the cooperative agreement, the geographic area of service of each recipient organization. Generally, no more than one recipient organization may be located in a state. (1) The AA/SBDC may determine that making awards to multiple recipient organizations in a state is necessary to more effectively implement the Program and provide services to all interested small businesses. (2) Once the Administration has entered into a cooperative agreement, a subsequent decision to change the recipient organization's area of service will be considered a non-renewal or termination. This decision will be subject to the procedures outlined in § 130.700. (b) The recipient organization must locate its Lead Center and SBDC service centers in the designated area of service to ensure that services are readily accessible to all small businesses within the designated area of service. (c) Any applicant commencing after January 1, 1992, must ensure that any new SBDC service centers established within its area of service, to the extent practicable, are primarily housed within institutions of higher education or a WBC operating pursuant to section 29 of the Small Business Act (15 U.S.C. 656) as stated in section 21(a)(1) of the Small Business Act (15 U.S.C. 648(a)(1)). (d) The allocation of resources, including site locations of the Lead Center and the SBDC service centers, will be reviewed for adequacy of coverage by SBA as part of the application review process for each budget period. [88 FR 76642, Nov. 7, 2023] § 130.320 Operating requirements. (a) The recipient organization has the contractual responsibility for performing the duties of the Lead Center in accordance with the cooperative agreement. The Lead Center must be an independent department within the recipient organization, having its own staff, including a full-time SBDC Director. (b) A Lead Center must provide administrative services and coordination for the SBDC network, including program development, program management, financial management, reports management, promotion and public relations, program assessment and evaluation, and internal quality control. The Lead Center must conduct and document annual financial and programmatic reviews and evaluations of its SBDC service centers consistent with § 130.820(a). (c) The Lead Center's and SBDC service center's services will be available to the public throughout the year during the normal hours of the business community. In addition, every effort should be made to provide assistance, including during nonbusiness hours, both in-person and virtually, as appropriate, to meet local community business demands and needs. Variations from these schedules or other anticipated closures will be included in the new or annual renewal application. Emergency closures will be reported to the SBA District Office as soon as is feasible. (d) The specific identification “Small Business Development Center” must be a part of the official name of every SBDC Lead Center and SBDC service center within the SBDC network, unless waived by the AA/SBDC. (e) Any entity that is using the term “Small Business Development Center” and under contract with the Lead Center and receiving program funds, whether receiving Federal funding or not, is considered a part of the recipient organization's network and as such the recipient organization is required to report to the OSBDC each SBDC service center's performance as well as any funds or program income generated by the activities of that Service Center. (f) Each SBDC must maintain a minimum number of export and trade certified counselors to assist clients develop export and international trade opportunities. The standard for establishing the number of counselors required to have this certification is based on the total number of full-time equivalent (FTE) counseling employees in an SBDC's network. The minimum number of certified counselors for an SBDC network is the lesser (1) Five counselors; or (2) Ten percent of the total number of FTE counselors in the network. (g) The Lead Center and all its SBDC service centers must implement and have in effect at all times, a uniform and enforceable conflict of interest policy applicable to all SBDC employees, contractors, consultants, and volunteers and must be signed annually. At a minimum, this policy must be consistent with the conflict of interest principles set forth in 2 CFR 2701.112. (h) The SBDC network will comply with 13 CFR parts 112, 113, 117, and 136 requiring that no person, on the grounds of race, color, handicap, marital status, national origin, race, religion, or gender, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the SBDC network. [60 FR 31056, June 13, 1995. Redesignated and amended at 88 FR 76642, Nov. 7, 2023] § 130.330 SBDC services and restrictions on service. (a) Services. (b) Access to Capital. (2) SBDCs may provide assistance and guidance with the necessary documentation required for applications for capital assistance; including assistance for SBA loan products and services, including small dollar loans, free of charge as stated in § 130.470. (3) SBDCs should prepare their clients to represent themselves to lending institutions. SBDCs may attend meetings with lenders to assist clients in preparing financial packages; however, SBDCs may not attest to a client's readiness or creditworthiness to the lending institution either verbally or in writing. (4) SBDCs may participate on boards and panels of financial institutions and with outside organizations but may not be involved in any final credit decisions involving SBDC clients or in making or servicing loans. (5) With respect to SBA loan guaranty programs, SBDCs may accompany an applicant organization appearing before SBA or a lender but may not advocate for, promote, recommend approval or otherwise attempt in any manner to influence SBA or a lender to provide financial assistance to any of its clients. (c) Special emphasis initiatives. (d) Portable assistance. [60 FR 31056, June 13, 1995. Redesignated and amended at 88 FR 76642, 76643, Nov. 7, 2023] § 130.340 Specific program responsibilities. (a) Policy development. (b) Program administration. (c) Responsibilities of SBDC Lead Center Directors. (2) The SBDC Lead Center Director position must have direct reporting authority, at a minimum, equivalent to that of a college dean in a university setting or the third level of management or administration within a state agency. (3) The Lead Center Director will direct and monitor program activities and financial affairs of the SBDC network to ensure effective delivery of services to the small business community, and compliance with applicable laws, regulations, 2 CFR part 200, and the terms and conditions of the cooperative agreement. (4) The SBDC Lead Center Director must have the authority necessary to control all personnel, budgets, and expenditures under the cooperative agreement. (5) The SBDC Lead Center Director will serve as the SBA's principal contact for all matters involving the SBDC network including, but not limited to, ensuring that state and local needs are addressed; financial and programmatic reporting are submitted; service centers are providing access to training; employees have experience necessary to conduct meaningful counseling; etc. [88 FR 76643, Nov. 7, 2023] § 130.350 SBDC advisory boards. (a) State/Regional Advisory Boards. (2) This advisory board will be referred to as a State SBDC Advisory Board in a state/territory having only one recipient organization, and a Regional SBDC Advisory Board in a state having more than one recipient organization. (3) These advisory boards must include small business owners and other representatives from the entire area of service. (4) New Lead Centers must establish a State or Regional SBDC Advisory Board by the beginning of the second project period. (5) A State or Regional SBDC Advisory Board member may also be a member of the National SBDC Advisory Board. (6) The reasonable cost of travel of any Board member for official Board activities may be paid out of the SBDC's budgeted funds. Federal and program funds are not to be used to compensate advisory board members for non-travel related expenses such as time and effort. (b) National SBDC Advisory Board. (2) The National SBDC Advisory Board shall advise and confer with SBA's AA/SBDCs on policy matters pertaining to the operation of the SBDC program. The Board shall meet with the AA/SBDCs at least semiannually. (3) The reasonable cost of travel of any National SBDC Advisory Board member for official Board activities will be paid by SBA out of SBDC line-item program funds. (4) Each member of the Board will be entitled to be reimbursed for expenses as a member of the Board. (5) The Board will meet at least semiannually and at the call of the Chairman of the Board. [60 FR 31056, June 13, 1995. Redesignated and amended at 88 FR 76642, 76643, Nov. 7, 2023] § 130.360 Selection of the SBDC Lead Center Director. (a) Selection. (b) Vacancy. (i) Being notified by the incumbent SBDC Lead Center Director of their intent to vacate the position; or (ii) Its formal decision to remove the incumbent SBDC Lead Center Director. (2) If the position will be vacated prior to the selection of a replacement, the recipient organization must appoint an interim SBDC Lead Center Director, prior to the vacancy, who will serve in that capacity until a permanent SBDC Lead Center Director is in position. (3) The recipient organization must inform the SBA District Director, Regional Administrator, and the AA/SBDC within ten business days of the appointment of the interim SBDC Lead Center Director and provide that individual's contact information. (4) An interim Lead Center Director must allocate at least 75 percent of their time and effort to the SBDC Program until a permanent SBDC Lead Center Director is in position. This must be documented in accordance with the policies of the recipient organization. An interim SBDC Lead Center Director must be knowledgeable about sponsored programs. The appointment period for such interim SBDC Lead Center Director will not exceed 120 days. Should more time be needed the recipient organization must obtain prior approval from the AA/SBDC for an extension. [88 FR 76644, Nov. 7, 2023] § 130.370 Contracts with other Federal agencies. (a) An SBDC Lead Center or SBDC service center organization may enter into a contract or grant with a Federal department or agency to provide specific assistance to small business concerns in accordance with paragraphs (b) and (c) of this section. (b) Prior to bidding on a non-SBA Federal award or contract, the SBDC Lead Center or service center must obtain written consent from the AA/SBDC or designee regarding the subject and general scope of the award or contract to ensure that performance under the award or contract does not represent a conflict with the SBA's cooperative agreement. The AA/OSBDC or designee shall respond to any written request within five business days. (c) Federal funds from other Federal programs (except for certain Community Development Block Grant program funds) may not be counted as match for purposes of the SBDC Program. In addition, match expenditures reported to the SBA under the cooperative agreement may not be used or reported as match for another Federal program. [88 FR 76644, Nov. 7, 2023] § 130.380 Client privacy. (a) SBDCs, including their contractors and other agents, are not permitted to disclose the Client's name, address, email address, or telephone number, hereafter referred to as “client contact data,” of individuals or small businesses that obtain any type of assistance from the Program to any person or entity other than the SBDC, without the consent of the client, except in instances where: (1) Court orders require the SBA Administrator to do so in any civil or criminal enforcement action initiated by a Federal or state agency; or (2) The Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of a small business development center, not including those required under § 130.830; or (3) SBA requires client contact data to directly survey SBDC clients. (b) SBDCs must provide an opportunity for a client to opt-in to allow the SBA to obtain client contact data. The SBA may use the permitted client contact data only to conduct surveys or studies that help stakeholders better understand how the services the client received affect their business outcomes over time. These surveys or studies would include, but not be limited to: (1) Studying evaluation and performance management; (2) Measuring the effect and economic or other impact of Agency programs; (3) Assessing public and SBDC partner needs; (4) Measuring customer satisfaction; (5) Guiding program policy development; (6) Improving grant-making processes; and (7) Other areas SBA determines would be valuable to strengthen the SBDC Programs and/or enhance support for SBDC clients. (c) SBDCs may not deny access to services to clients solely based on their refusal to provide consent as referenced in this section. (d) Any reports or studies on program activity produced by SBDC and/or the Administrator, including their contractors and other agents, may not disseminate client contact data and must only report data in the aggregate. Individual client contact data will not be disclosed in any way that could individually identify a client. (e) SBDCs and the Administrator, including their contractors and other agents, must obtain consent from the client prior to publishing media or reports that identify an individual client. (f) This section does not restrict the Agency in any way from access and use of program performance data. [88 FR 76644, Nov. 7, 2023, as amended at 89 FR 17717, Mar. 12, 2024] § 130.400 Application procedures. All SBDC applicants must comply with the annual notice of funding opportunity, including format, conditions, submission requirements, and due dates, for their new or renewal application to receive consideration. [88 FR 76645, Nov. 7, 2023] § 130.410 New applications. (a) New applicants. (b) Consideration. (c) Recruiting and selecting new recipient organizations. (2) After completion of an objective review process, the AA/SBDC will make the final selection and notify the successful applicant. (3) The newly selected recipient organization may, with prior written approval from the SBA, incur qualified pre-award matching expenditures for the establishment of the Lead Center office, to recruit Lead Center staff, and to cover other related start-up expenditures to the extent permitted under 2 CFR 215.25(e)(1). [88 FR 76645, Nov. 7, 2023] § 130.420 Renewal applications. (a) The recipient organization will submit the renewal application to the OSBDC using the submission process outlined in the annual notice of funding opportunity. (b) If the OSBDC chooses to not renew the award of an existing recipient organization or the recipient organization elects not to reapply, the OSBDC will award a cooperative agreement for the conduct of an SBDC project to a new recipient organization in the same area of service using a competitive process. If the OSBDC has initiated a non-renewal or termination action, the Agency will not issue the new award until all administrative remedies have been exhausted. For further information regarding the termination and non-renewal procedures, see § 130.700. (c) Significant factors considered in the renewal application review will include: (1) The applicant's ability to obtain matching funds; (2) The quality of prior performance under the cooperative agreement as measured by client satisfaction rate; (3) The results of any examination conducted pursuant to § 130.810(b); (4) Corrective measures implemented as a result of examinations conducted; and (5) The accreditation provisions of § 130.810(c) including any conditions, the most current accreditation report, and corrective measures implemented, affecting the recipient organization and the SBDC network. (d) The OSBDC will review the renewal application for conformity with the notice of funding opportunity. The AA/SBDC may request additional information and documentation prior to issuing the cooperative agreement. [88 FR 76645, Nov. 7, 2023] § 130.430 Application decisions. (a) New applications will either be accepted or rejected in accordance with the evaluation criteria set forth in the applicable notice of funding opportunity. The AA/SBDC may approve, or conditionally approve, or deny any new application. The AA/SBDC may approve or conditionally approve or deny a renewal application. The AA/SBDC may also reject a renewal application after following due process in accordance with the procedures set forth in § 130.700. If a renewal application is conditionally approved, the requirements that the recipient organization must meet in order to obtain full and unconditional approval, will be specified as special terms and conditions in the cooperative agreement. (b) In the event of a conditional approval, the SBA may fund a recipient organization for one or more specified periods of time up to a maximum of one budget period. If the recipient organization fails to comply with the special terms and conditions of the award to the satisfaction of the AA/SBDC within the allotted time period, the AA/SBDC may suspend, non-renew, or terminate the cooperative agreement with the SBDC, in accordance with the procedures set forth in § 130.700. [88 FR 76645, Nov. 7, 2023] § 130.440 Maximum grant. (a) No recipient organization will receive an SBDC grant, in any fiscal year under a cooperative agreement, exceeding the greater of the minimum statutory amount, or its pro rata share of all SBDC grants as determined by the statutory formula set forth in section 21(a)(4)(C) of the Small Business Act (15 U.S.C. 648(a)(4)(C)). This limit does not apply to the distribution of supplemental funds, or to grants provided pursuant to sections 21(a)(4)(C)(viii) and 21(a)(6) of the Small Business Act (15 U.S.C. 648(a)(6)). (b) Additional grants are subject to the limitations set forth in section 21(a)(6) of the Small Business Act unless the statute providing for the additional grant states otherwise. [88 FR 76645, Nov. 7, 2023] § 130.450 Matching funds. (a) The recipient organization must provide total Matching Funds equal to the total amount of SBA funding. Cash match must be equal to or greater than 50 percent of the SBA funds used by the SBDC. The remaining match required to equal the one-to-one match requirement may be provided through any allowable combination of additional cash, in-kind contributions or indirect costs. (b) All sources of Matching Funds must be identified as specifically as possible in the budget proposal. Cash sources shall be identified by name and account. Any additional SBA requirements, specifications, or deliverables must be clearly identified in the budget narrative. If a political entity is providing such cash and the funds have not been appropriated prior to issuance of the cooperative agreement, the recipient organization must certify that sufficient funds will be available from the political entity prior to the use of Federal dollars. (c) Under the authority of 48 U.S.C. 1469a(d), the AA/SBDC may, at his/her discretion, waive any requirement of matching funds for an insular territory otherwise required by law to be provided. Notwithstanding any other provision of law, in the case of American Samoa, Guam, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands, any department or agency shall waive any requirements for local matching funds under $200,000, including in-kind contributions, required by law to be provided by American Samoa, Guam, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands. (d) All applicants must submit a certification of cash match and program income. This certification must be executed by an authorized official of the recipient organization and must identify any SBDC service center organization(s) providing cash match under a subcontract or other agreement. (e) In addition to the Federal and program income funds, all matching funds must be under the direct management of either the SBDC Lead Center Director or an SBDC Service Center Director, when budgeted under an SBDC service center organization. If in-kind contributions are utilized by the SBDC, the State Director or an SBDC Service Center Director is then considered to be in control of those contributions. (f) The Grants Management Specialist will determine whether matching funds and cash match set forth in the budget proposal are sufficient to issue the cooperative agreement. (g) Recipient organizations are not required but encouraged to identify overmatched amounts as part of the cooperative agreement. Overmatching expenditures are those which are derived from eligible matching sources; are reasonable, allowable, and allocable to the SBDC program; are over and above the minimum match required to the Federal expenditures; and are included on the required SBDC financial reporting to SBA for the project period. (1) Recipient organizations are encouraged to identify overmatched amounts as part of the cooperative agreement. The recipient organization must fully identify the amount and sources of claimed overmatched amounts. If overmatched amounts are reported, they are subject to the provisions of the cooperative agreement and SBA biennial programmatic and financial examinations. (2) An overmatched amount can be applied as matching funds for any funding increase ( i.e., (3) Allowable overmatched amounts which have not been used in the manner described in this section may, with the approval of the AA/SBDC, be used as a credit to offset any confirmed audit disallowances applicable only to the budget period in which the overmatched amount exists and the two previous budget periods. Such offsetting funds may be applied to Federal or matching accounts. (h) The following sources cannot be used as matching funds for the SBDC network: (1) Uncompensated student labor; (2) SCORE, SBA, Women's Business Centers, or other SBA resource partners; (3) Program income or fees collected from individuals or small businesses receiving assistance; (4) Federal funds other than Community Development Block Grant (CDBG) funds; (5) In-kind contributions, or indirect costs not solely dedicated to the SBDC Program, or under its control; (6) Any resource allocated and claimed as a matching cost to another federally funded program; or (7) Funds or other resources provided for an agreed upon scope of work inconsistent with the authorized activities of the SBDC Program. [60 FR 31056, June 13, 1995, as amended at 88 FR 76645, Nov. 7, 2023; 89 FR 17717, Mar. 12, 2024] § 130.460 Budget justification. (a) General. (b) Direct costs. (c) Indirect costs. (1) Twenty percent of Federal contribution; or (2) The amount remaining after the waived portion of indirect costs is deducted from the total indirect costs allowed by the SBA. (d) Separate SBDC service provider budgets. (1) Negotiated with the SBA Project Officer; or (2) Apply the OMB de minimis rate. (e) Cost principles. (f) Salaries. (2) Salaries for Lead Center Directors should be comparable to salaries paid Lead Center Directors in other states or regions with comparably sized programs, responsibilities, and authority. (3) Salaries for all other positions within the SBDC should be based upon level of responsibility and be comparable to salaries for similar positions in the area served by the SBDC. (g) Equipment. (h) Travel. (2) Transportation costs must be justified in writing, including the estimated cost, number of persons traveling, and the benefit to be derived by the small business community from the proposed travel. (3) Any proposed unplanned out-of-state/region travel exceeding the approved amount budgeted for this category must be submitted to the SBA for approval on a case-by-case basis prior to traveling. (4) All foreign travel requests must be submitted to the appropriate District Director and the SBDC Program Manager for review and provided to the AA/SBDC for final approval in accordance with the notice of funding opportunity. Foreign travel charged to the SBDC cooperative agreement or performed by SBDC staff, while on duty for the recipient organization, must be approved in advance. (i) Planned foreign travel costs allocable to the SBDC cooperative agreement for SBDC network staff may be approved by AA/SBDC through the annual proposal process, but such planned costs must be fully disclosed and justified in the budget narrative for Agency review. Prior approval should be obtained from the AA/SBDC prior to travel in accordance with 2 CFR part 200. (ii) Unanticipated foreign travel must be approved using the process set forth in this paragraph (h). [88 FR 76646, Nov. 7, 2023] § 130.465 Restricted and prohibited costs. (a) SBA prohibitions are consistent with those outlined in 2 CFR part 200. (b) An SBDC must not use project funds as collateral for a loan or other such monetary purpose. (c) An SBDC must not use project funds for memorabilia, gifts, prizes, souvenirs, entertainment, alcoholic beverages, amusement, social activities, or any other such costs. (d) Prior written approval from the AA/SBDC is need for SBDC project funds to be used for the purpose of fundraising activities and costs. SBDCs may include in initial applications and renewal applications proposed fundraising activities. After issuance of an approved cooperative agreement, an SBDC wishing to seek prior approval for new fundraising activities not already approved should follow the prior approval guidance in the cooperative agreement. Prohibited fundraising activities include, but are not limited to: (1) Costs of organized fundraising, endowment drives; (2) Financial or capital campaigns; or (3) Solicitation of gifts and bequests. (e) Project funds found to be used in violation of the restrictions in this section may be cause for termination, suspension, or non-renewal of the cooperative agreement. [88 FR 76647, Nov. 7, 2023] § 130.470 Fees. (a) An SBDC may charge clients a reasonable fee to cover the costs of training (sponsored or cosponsored) by the SBDC, the sale of books, the rental of equipment or space, research work, hiring outside consultants for a particular client, or other specialized services. (b) SBDC network entities, staff, consultants, or volunteers must not solicit or accept fees or other compensation for counseling services, including, but not limited to, business or marketing plan development, loan packaging or credit application assistance, or other advisory services described in section 21 of the Small Business Act. [88 FR 76647, Nov. 7, 2023] § 130.480 Program income. (a) Program income and interest earned on program income, may only be used for authorized purposes, in accordance with 2 CFR 200.307 and the cooperative agreement, such as to expand the quantity or quality of services, resources or outreach provided by the SBDC network. (b) Program income may not be reported or used as a matching resource. Unused program income must be carried over to the subsequent budget period by the SBDC network; however, the aggregate amount of network program income cannot exceed 25 percent of the total SBDC budget (Federal and matching expenditures). (c) Program income exceeding 25 percent of the total approved SBDC budget must be expended by the SBDC network prior to the end of the budget/project period in which the excess occurs. (d) The Lead Center must report the consolidated program income sources and uses as an attachment to the financial status report for the SBDC network during the budget period. The SBDC must provide a narrative describing how program income was used to further program objectives. [88 FR 76647, Nov. 7, 2023] § 130.490 Property standard. See 2 CFR part 200, subpart D. [88 FR 76647, Nov. 7, 2023] § 130.500 Funding. See 2 CFR 200.305. [88 FR 76647, Nov. 7, 2023] § 130.600 Cooperative agreement. (a) Cooperative agreement provisions. (b) Sub-agreements. (c) Goals and milestones. (2) The AA/SBDC or designee will negotiate with the designated association and Lead Center to establish the annual goals, milestones, and activities for the cooperative agreement. (3) Failure to meet the goals and milestones of the cooperative agreement may be considered in part of the determination for suspension, termination, or non-renewal in accordance with the dispute resolution procedures set forth in § 130.630. (4) Agency loan goals may not be negotiated or incorporated into the cooperative agreement without the prior written approval of the AA/SBDC. (d) Procurement policies and procedures. (2) Contracting procedures must encourage open competition among qualified vendors and promote the effective, efficient, and responsible use of program resources and OMB guidance. (3) Contracting procedures should provide for domestic sourcing preferences to the greatest extent practicable, showing preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States. [88 FR 76647, Nov. 7, 2023] § 130.610 General terms. Upon approval of the initial or renewal application, SBA will enter into a cooperative agreement with the recipient organization, setting forth the programmatic and fiscal responsibilities of the recipient organization and SBA, the scope of the project to be funded, and the budget of the program year covered by the cooperative agreement. [60 FR 31056, June 13, 1995, as amended at 88 FR 76647, Nov. 7, 2023] § 130.620 Revisions and amendments to cooperative agreements. (a) Requests for revisions. (1) Any change in project scope or objectives that will substantially change outcomes described in the cooperative agreement; (2) Budget revisions exceeding the limit established in the cooperative agreement; and (3) Any proposed sole-source or one-bid contracts exceeding the limits established by applicable administrative regulations or OMB. (b) Emergency authorizations. Federal Register (2) Proposed and actual travel costs incurred under an emergency authorization must comply with the requirements of § 130.460(h), as well as the relevant notice of funding opportunity and OMB guidelines. (c) Supplemental funding. [88 FR 76647, Nov. 7, 2023] § 130.630 Dispute resolution procedures. (a) Financial disputes. (2) If the recipient organization receives an unfavorable decision from the SBA, it may file an appeal with the AA/SBDC within 30 calendar days of the date of receipt of the unfavorable decision. (3) The AA/SBDC may request additional information or documentation from the recipient organization at any stage of the proceedings. The response to the request for additional information must be provided in writing to the AA/SBDC within 15 calendar days of receipt of the request. The AA/SBDC will transmit a written decision to the recipient organization within 15 calendar days of receipt of the appeal or within 15 calendar days of receipt of additional information requested. (4) If the recipient organization receives an unfavorable decision from the AA/SBDC, it may make a final appeal to the SBA Grants and cooperative agreements Appeals Committee (the “Committee”). The final appeal to the Committee must be filed within 30 calendar days of the date of receipt of the AA/SBDC's written decision. Copies of the appeal must also be sent to the Grants Management Specialist and the Program Manager. If the recipient organization elects not to file an appeal with the Committee, the decision of the AA/SBDC becomes the final Agency decision on the matter. (5) A recipient organization may request a hearing before the Committee, but such requests will not be granted, unless material facts are substantially in dispute. Legal briefs and other technical forms of pleading are not required. However, appeals to the Committee must be in writing and contain at least the following information and supporting documentation: (i) Name and address of the recipient organization; (ii) Name and address of the appropriate SBA District Office(s); (iii) A copy of the underlying cooperative agreement, including all amendments; (iv) A statement of the grounds for appeal, with reasons why the appeal should be sustained; (v) A statement of the specific relief desired on appeal; and (vi) If a hearing is requested, a statement of the material facts the recipient organization believes are substantially in dispute. In the event a recipient organization fails to provide any of the information specified in paragraphs (a)(5)(i) through (v) of this section, the Committee may dismiss the appeal. (6) The Committee may request additional information or documentation from the recipient organization at any stage in the proceedings. The recipient organization's response to the Committee must be submitted, in writing, within 15 calendar days of receipt of the request. (7) If a request for a hearing is granted, the Committee will provide the recipient organization with written instructions and will afford the parties the opportunity to present their respective positions to the Committee. (8) The Chairperson of the Committee, with the advice of the SBA's Office of General Counsel (OGC), will issue a final written decision within 30 calendar days of receipt of all information or within 30 calendar days of the completion of the hearing. Copies of the decision will be provided to the recipient organization, the AA/SBDC, the Grants Management Specialist, and the SBA Project Officer. (9) Where a recipient organization's appeal to the Committee commences or is pending within 120 days of the end of the current budget period, the recipient organization has the right to request, in writing, that the matter be handled under an expedited appeal process. In such circumstances, the Committee, by an affirmative vote of its membership, may expedite the appeals process to attain final resolution of a dispute before the anticipated issuance date of a new cooperative agreement. (b) Programmatic (non-financial) disputes. (2) The AA/SBDC will transmit a final, written decision to the recipient organization, the Lead Center Director, the SBA Project Officer, and the SBA District Office within 30 calendar days of the receipt of such documentation, unless the recipient organization agrees to an extension of time. [88 FR 76648, Nov. 7, 2023] § 130.700 Suspension, termination, and non-renewal. (a) General. (1) Non-renewal. (2) Suspension. (ii) The notice of suspension will recommend that the recipient organization cease work on the project immediately. The SBA is under no obligation to reimburse any expenses incurred by a recipient organization while its cooperative agreement is under suspension. Where AA/SBDC decides to lift a suspension and reinstate a recipient organization's cooperative agreement, the Agency may, at its discretion, choose to reimburse a recipient organization for some or all of the expenses it incurred in furtherance of project objectives during the period of suspension. However, there is no guarantee that the Agency will elect to accept such expenses, and recipient organizations incurring expenses while under suspension do so at their own risk. (b) Cause. (1) Non-performance; (2) Poor performance; (3) Unwillingness or inability to implement changes to improve performance; (4) Disregard or material violation of regulations; (5) Willful or material failure to comply with the terms of the cooperative agreement, including relevant OMB Circulars; (6) Conduct of the SBDC Lead Center Director or other key personnel, reflecting a lack of business integrity or honesty, which is not properly addressed on the part of the recipient organization or sponsoring SBDC organizations; (7) A conflict of interest on the part of the recipient organization, the SBDC service centers, the SBDC Lead Center Director, other key personnel, contractors or volunteers that causes a real or perceived detriment to a small business concern, a contractor, the SBDC network, including but not limited to, SBDC service centers, or SBA; (8) Improper use of Federal funds; (9) Failure of a Lead Center or its service centers to consent to audits, examinations, certification reviews, or to maintain required documents or records; (10) Failure to implement recommendations from the audits or examinations within one year of notification of deficiencies; (11) Failure to implement conditions from accreditation reviews within the time frame recommended by the accreditation committee and established by the AA/SBDC; (12) Failure of the SBDC Lead Center Director to work at the SBDC Lead Center on a full-time basis; (13) Failure to promptly suspend or terminate the employment of an SBDC Lead Center Director, Service Center Director, or other key personnel, contractors, or volunteers upon receipt of knowledge or written information by the recipient organization and/or SBA indicating that such individual has engaged in conduct which may result or has resulted in a criminal conviction or civil judgment that would cause the public to question the SBDC's integrity. The SBDC Lead Center Director (or other appropriate official in the SBDC network), when making the decision to suspend or terminate such an employee, must consider the magnitude of the behavior, the repetitiveness of the conduct, and the remoteness in time of the behavior underlying any conviction or judgment; (14) Failure to maintain adequate client service facilities or service hours; and (15) Any other action that materially and adversely affects the operation or integrity of an SBDC or the SBDC Program. (c) Administrative procedure for suspension, termination, and nonrenewal. (1) Taking action. (2) Notice requirements. (3) Relationship to Government-wide suspension and debarment. Debarment and Suspension, (d) Administrative review of suspension, termination and nonrenewal actions. (1) Format. (i) Name and address of the recipient organization; (ii) Identification of the relevant SBA office/program ( i.e., (iii) Cooperative agreement number; (iv) Copy of the notice of suspension, termination, or non-renewal; (v) Statement discussing why the recipient organization believes the SBA's actions were arbitrary, capricious, an abuse of discretion, and/or otherwise not in accordance with the law or governing regulations; (vi) Identification of the specific relief being sought ( e.g., (vii) Statement as to whether the recipient organization is requesting a hearing, and if so, the reasons why it believes a hearing is necessary; and (viii) Copies of any documents or other evidence the recipient organization believes support its position. (2) Service. (i) AA/SBDC; and (ii) the Associate General Counsel for Procurement Law. (3) Timeliness. (i) In addition, if the AA/ED does not receive a request for an administrative review within the 30-day deadline, then the decision by the AA/SBDC to suspend, terminate, or non-renew a recipient organization's cooperative agreement will become the final Agency decision on the matter. (ii) [Reserved] (4) Standard of review. (5) Conduct of the proceeding. (i) Notify the parties whether the AA/ED has decided to grant a request for a hearing. (ii) Direct the parties to submit further arguments and/or evidence on any issues, that she/he believes require clarification. (iii) Notify the parties that the AA/ED has declared the record to be closed and therefore will refuse to admit any further evidence or argument. (iv) Within ten calendar days of declaring the record to be closed, provide all parties with a copy of the AA/ED's written decision on the merits of the administrative review. (6) Request for hearing. (7) Evidence. (8) Decision. (i) Where an enforcement action has been reversed on administrative review, the SBA will have no more than ten calendar days to implement the AA/ED's decision. However, to the extent permitted under the applicable OMB Circulars, the SBA reserves the right to impose such special conditions in the recipient organization's cooperative agreement as it deems necessary to protect the Government's interests. (ii) [Reserved] [88 FR 76648, Nov. 7, 2023] § 130.800 Oversight of the SBDC Program. (a) The AA/SBDC and designees will monitor the SBDC's performance and its ongoing operations under the cooperative agreement to determine if the SBDC is making effective and efficient use of program funds for the benefit of the small business community. (b) The District Office is the primary contact for the coordination of the delivery of services to the small businesses in each area of service. (c) The AA/SBDC may change the primary contact for coordination at any time and will notify the recipient organization of such a change in a timely manner. [88 FR 76650, Nov. 7, 2023] § 130.810 SBA review authority. (a) Site visits. (1) The programmatic reviews will incorporate District Office oversight which will include conducting yearly reviews. (2) Site visits may be incorporated into oversight and monitoring activities of the SBA program office or the SBA District Office. (b) SBA examinations. (c) Accreditation program. (i) The Small Business Act provides that the Administration may provide financial support, by contract or otherwise, to the association for the purpose of developing a SBDCs accreditation program. See 15 U.S.C. 648(k)(2). (ii) SBDC networks must be reviewed for accreditation purposes and receive accreditation periodically, as negotiated between the AA/SBDC and the accreditation committee of the recognized association. (iii) If an SBDC does not receive accreditation, the SBA may initiate the non-renewal or termination procedure pursuant to § 130.700. (iv) The statue at 15 U.S.C. 648(k)(3)(B) states the SBA may not renew or extend any cooperative agreement with a SBDC unless the center has been approved under the accreditation program conducted pursuant to this section, except that the AA/SBDC may waive such accreditation requirement, at their discretion, upon a showing that the center is making a good faith effort to obtain accreditation. (2) The AA/SBDC and/or designee will participate in the deliberations of the accreditation committee. (d) Audits. [88 FR 76650, Nov. 7, 2023] § 130.820 Records and recordkeeping. (a) Records. (2) The recipient organization will ensure complete and accurate detailed financial and programmatic documentation by all SBDC service center organizations and service centers. The recipient organization will monitor and oversee its SBDC service center organizations and SBDC service centers each budget period to ensure compliance with the OMB guidelines and regulations. See 2 CFR part 200, subpart D. (i) The recipient organization and Lead Center will ensure that: (A) All funds received throughout the SBDC network, both Federal and non-Federal, including program income, are properly accounted for, adequately safeguarded, accurately reported, and properly used to further program objectives. (B) Each SBDC service center organization has reviewed all charges made to its SBDC accounts, including program income, to ensure that they are allowable. (ii) The recipient organization's Lead Center monitoring and oversight activities must include annual on-site or virtual visits to all its SBDC service center organizations. (A) These review procedures must ensure that SBDCs are in compliance with the terms and conditions of the cooperative agreement. (B) The Lead Center will document the results of annual reviews of the financial and program records of its SBDC service center organizations. (C) An in-person monitoring review must be conducted the same year that there is a change in leadership or a record of problems in that year and must be conducted not less than every 4 years. (3) The recipient organization must keep records on the amount, source, and purpose of all funding under the overall management of the SBDC network, including Federal programs. (b) Availability of records. (2) All SBDC network records, financial and programmatic, must be maintained for a period of three years following the date SBA accepted the annual performance report and final financial status report from the recipient organization. (3) The recipient organization will maintain sufficiently detailed program and financial documentation to facilitate transition and provide continuous SBDC services when changes occur in SBDC service center organizations, as well as to support reviews and audits authorized by the SBA. [88 FR 76651, Nov. 7, 2023] § 130.825 Reports. (a) General. (b) Frequency. (2) Recipient organizations that have been in the Program for fewer than three years must submit financial and programmatic performance reports 30 calendar days after completion of each quarter for the first three years. (3) The final report from recipient organizations must be submitted in accordance with the notice of funding opportunity and terms and conditions. (c) Electronic data reports. (d) Performance reports. (1) The quarterly and semiannual performance reports will address, in a brief narrative, the SBDC's major activities and objectives. The reports should include a discussion on the progress toward achieving those objectives. (2) Final performance reports should include an overall summary of effort expended to deliver the core services described in the cooperative agreement for the full budget period. A discussion of performance measurements achieved and an explanation of those objectives or measurements not met should be included. Performance reports should be a summary of the activities, events or achievements by reportable category with an accompanying management analysis. [88 FR 76651, Nov. 7, 2023] § 130.830 Audits and investigations. See 2 CFR part 200, subpart F. [88 FR 76652, Nov. 7, 2023] § 130.840 Closeout procedures. (a) General. (b) Supplies and equipment. (c) Intellectual property. (2) Inventory and documentation of intellectual property must be collected by the Lead Center for close out. In circumstances where SBA is not renewing the cooperative agreement, the recipient organization must provide an intellectual property inventory and the support documentation to the SBDC clearinghouse and to the District Office for disposition instructions. (d) Responsibilities Recipient organizations. (i) An inventory of the SBDC property must be compiled and evaluated. An asset evaluation final report accounting for the property, equipment, and the aggregate of usable supplies and materials must be provided to the Program Manager. (ii) Program income balances must be reconciled, and unused program income transferred to the Lead Center from SBDC service center organization accounts. (iii) Client counseling and training records, paper and electronic, must be compiled to facilitate an SBA program closeout review. (iv) Financial records will be compiled to facilitate an SBA closeout financial examination. (2) Close out actions. (3) SBA. (e) Final disposition. (2) The AA/SBDC will issue written disposition instructions to the recipient organization providing: (i) The name and address of the entity or agency to which property and program income must be transferred; (ii) A date by which the transfer must be completed; (iii) Actions to be taken regarding property and program income; (iv) Actions to be taken regarding program records such as client and training files; and (v) Authorization to incur costs for accomplishing the transfer. Such costs may, when authorized, be applied to residual program income or Federal or matching funds. [88 FR 76652, Nov. 7, 2023]