1450 Supporting Statement FINAL 4-5-13

SUPPORTING STATEMENT for OMB Form 83-1
SBA Form 1450, 8(a) Annual Update

A. Justification
1.

8(a) Annual Update, SBA Form 1450 with Attachments A, B and C

Circumstances Necessitating the Collection of Information.

The U.S. Small Business (SBA) 8(a) Business Development (BD) program as authorized by
sections 7(j)(10) and 8(a) of the Small Business Act (Act) (15 United States Code (U.S.C.)
636(j)(10) and 637(a)), was created to assist eligible small disadvantaged business concerns to
compete in the American economy and access the federal procurement market. Under the Act,
each small disadvantaged business participant (Participant) in the 8(a) BD program is required to
annually submit a business plan along with other supporting information to SBA as a condition
of ongoing participation in the program.
Currently, all Participant firms submit the SBA Form 1450, “8(a) Annual Update”, which
includes Attachments A, B and C, to annually update and report to SBA on the firm’s business
progress and participation in the 8(a) BD program, particularly to meet the annual review and
annual update requirements outlined in the SBA regulations at Title 13 of the Code of Federal
Regulations, section 124.112 (13 C.F.R. § 124.112).
SBA has made the following changes to the current SBA Form 1450:
a) The prefatory language at the top of page, 1 and the certification language on page 5, has
been revised to emphasize the persons completing the form must provide truthful and
accurate information. Also, on page 1, we added where the form can be assessed and
where the Participant should send hard copy with certification page only.
b) Under 1) Business Information, “SBA Customer Number” has been removed because
SBA no longer uses this number to identify small businesses. Instead, we use the
Participant firm’s DUNS number.
c) Under 1) Business Information, we added SAM (System for Award Management) to the
CCR/DSBS update list because the General Services Administration (GSA) moved to a
new data system, System for Award Management ( SAM) in 2012.
d) Under 2) Personal Financial Information, language has been added to clarify who needs
to provide personal financial information (spouse of certain owners also need to provide
form). We added this language to be consistent with changes to the 8(a) regulations that
were published in the Federal Register on February 11, 2011, and which became effective
March 14, 2011.
e) Under 3) Annual Compensation Data and Attachment A, the title of the Individual
Compensation Worksheet has been revised to be the “Individual/Entity Compensation
Worksheet”. In addition, the questions on the worksheet have been revised to seek
information relating to payment by 8(a) Participants to other companies owned or
controlled by principals of the 8(a) Participant. These revisions bring the form into
compliance with 13 C.F.R. § 124.112(b)(5). In addition, guidance has been added to
Attachment A to clarify the type of information that is being sought.

Justification for SBA Form 1450

-1-

OMB Form 83-I

f) Under 4) Transferred Assets, language has been added to request details related to
notification of transfer of assets. All additions to this section represent clarifications to
existing regulations and requirements found in SBA’s regulations published in the
Federal Register on February 11, 2011 and effective March 14, 2011.
g) Under 5) Tax returns, the phrase “tax return” has been substituted for the phrases
“business tax return” and “individual tax return”. Language has also been added to
clarify who needs to provide tax returns (spouses of owners need to provide tax returns).
Language has been added to clarify that all submission of tax returns must be signed.
These changes/additions to this section represent requirements found in SBA’s
regulations published in the Federal Register on February 11, 2011 and effective March
14, 2011.
h) Under 9) Access to Capital and Credit, language has been added to make it clearer what
type of financial information is being sought.
i) Under 12), a requirement has been added to provide a report for all 8(a) contracts
performed during the year explaining how the performance of work requirements are
being met (or have been met) for the contract. In addition, a new Attachment C, entitled
“8(a) Contracts Annual Performance”, has been added to the form to make it easier for
Participants to provide the requested information. Language has also been added in item
12 and Attachment C to obtain information regarding joint ventures in which the 8(a)
firm has participated. These changes/additions to this section represent requirements
found in SBA’s regulations published in the Federal Register on February 11, 2011
j) Under Attachment A, the requirement to provide total compensation for previous years
has been deleted since this is not needed or required by statute or regulation.
k) Under Attachment B, “Mentor-Protégé Worksheet,” we added one additional question.
This question represents a requirement found in SBA’s regulations published in the
Federal Register on February 11, 2011 and effective March 14, 2011. The question
requests the Participant firm to report on services (by category and hours) that it received
from the mentor. Language was also added to clarify several of the questions and to add a
certification by the mentor firm to bring the form into compliance with 13 C.F.R. §
124.520(b)(4).
l) We also made various typographical and format changes to the form.
2. How, By Whom and For What Purpose Information Will Be Used
The existing information is collected once per year from small disadvantaged businesses that
have been certified for participation in the 8(a) BD program. This information is collected via
SBA Form 1450 with Attachments A, B and C.
The SBA reviews and analyzes the information to determine whether these firms are eligible for
continued participation in the 8(a) BD program. SBA also assesses the information to counsel
the firms and provide business development assistance.
The SBA uses the approved information collection (SBA Form 1450 with Attachments A, B and
C) to:
1. Confirm and update basic information such as name, address, and contact information;

Justification for SBA Form 1450

-2-

OMB Form 83-I

2. Ensure the owner(s) have complied with compensation limitations imposed by the SBA
program regulations at 13 C.F.R. § 124.112(d);
3. Ensure the owner(s) remain economically disadvantaged, as defined in the SBA
program regulations at 13 C.F.R. § 121.104;
4. Ensure the Participant is still owned, managed and controlled by the individuals upon
whom eligibility was originally based or by the entity upon whom eligibility is based
(be it an Indian Tribe, ANC, NHO or a CDC);
5. Assess the firm’s business development needs, including:
a. the firm’s access to credit, capital and bonding;
b. the firm’s level of sales obtained from both 8(a) contracts and non-8(a)
contracts;
c. the status of any outstanding joint ventures and mentor-protégé agreements the
firm may have;
d. the Participant’s need for future 8(a) contracts; and
e. whether the Participant firm is actively making and following plans to transition
out of the 8(a) BD program into the competitive contracting arena.
3.

Technological Collection Techniques

The SBA Form 1450, including Attachments A, B and C, is accessible electronically. The 8(a)
Participants can electronically enter and/or modify their information using SBA’s data system to
complete and submit the form for review by accessing
(http://www.sba.gov/sites/defualt/files/forms_1450.pdf). However, the firm must submit a hard
copy of the certification page only containing a “wet signature” of the President, Partner or
Proprietor. This document should be sent to the assigned Business Opportunity Specialist
located at the serving District office.
4. Avoidance of Duplication
There is minimal duplication of this information collection, in that 8(a) Participants must submit
certain identifying information (e.g. firm’s name, principal’s name and title) that would have
been submitted at time of application. However, this information is merely to identify the source
of the information. Other requested information is necessary in order to update a firm’s file to
comply with the Small Business Act and SBA regulations and to determine continued eligibility
for program participation.
Other requested information includes the following:
 updates to the firm’s business plan;
 changes in access to credit and capital;
 updates to business revenues;
 additions or changes to the 8(a) firm’s participation in any Mentor/Protégé Agreements or
Joint Venture Agreements;
 new or additional information on taxes paid;
 reporting of any 8(a) contracts and non-8(a) contracts awarded;
 additions or changes to the Transition Management Plan; and

Justification for SBA Form 1450

-3-

OMB Form 83-I



certifications that the 8(a) Participant continues to comply with the regulations at 13
C.F.R. § 124.101 through 108.

5. Impact on Small Business or Other Small Entities
Although this information collection impacts small businesses, it will not have a significant
economic impact on a substantial number of these businesses.
The majority of 8(a) BD Participant firms will continue to have a burden of two hours to
complete Form 1450 along with Attachment A, B and C. Approximately 95% of all 8(a)
Participant firms (or 7,423 out of 7,814 firms), will annually be required to complete SBA Form
1450 with Attachments A, B and C.
6. Consequences If Collection of Information Is Not Conducted
Without this information collection, SBA cannot determine:
1. if the 8(a) Participant continues to meet the criteria for 8(a) BD program eligibility;
2. how well the 8(a) Participant is progressing toward meeting its business plan goals and
objectives and becoming competitive in the mainstream of the American economy; and
3. the level and type of business development assistance that needs to be provided to the
8(a) Participant.
Finally, the agency’s ability to comply with the statutory requirements for administering the
program, to combat waste, fraud, and abuse and to report to Congress on the overall 8(a) BD
program would be impaired without this information collection.
7. Existence of Special Circumstances
None of the listed special circumstances are applicable. See response to number 10 regarding
protection of proprietary and confidential information.
8. Solicitation of Public Comment
A request for comment on Form 1450 was published in the Federal Register (FR) on December
12, 2011 (76 FR 77297). In response to either notice, SBA also published a supplemental notice
and request for comments on February 8, 2013 at 78 FR 944. Copies of these Federal Register
notices are attached. SBA received no comments.
9. Payment or Gifts
There are no payments or gifts to any respondent.

Justification for SBA Form 1450

-4-

OMB Form 83-I

10. Assurance of Confidentiality
The Participant firms are advised on the Form 1450 that all information collected will be
protected to the extent permitted by law, including the Freedom of Information Act, (5 U.S.C.
522), Privacy Act (5 U.S.C. 555a) and the Right to Financial Privacy Act of 1978 (12 U.S.C.
3401). Access to the information is limited to those persons who need the information to
perform program functions.
SBA staff’s access to the information is restricted based on the staff member’s assigned work
responsibility. SBA staff in the field offices can only view firm information for the individual
firms assigned to that SBA staff member. Only SBA program managers have full access to all
data. Participant firms can only view their submitted information about their own firm.
Please see the attached information from SBA 30 (Attachment) regarding system access.
11. Questions of a Sensitive Nature
This form collects financial information through questions 2, 3, and 4, including personal
financial information, tax returns W2s, etc. of the certain persons associated with the Participant.
SBA maintains the personal information in a Privacy Act system of record, SBA 30, which was
last published on April 1, 2009, at 76 FR 14889, 14921. The information collected is required
by program regulations at 13 C.F.R.§124.112; §124.301 to 303; §124.403; and § 124.604 to
conduct the annual review of the 8(a) Participants and make determinations as to the firm’s
continued eligibility, to review the its progress in the 8(a) BD Program, and to update the 8(a)
Participant’s business plans. Without this information, we cannot determine the needs of the
Participant, or whether the Participant remains eligible for the 8(a) BD Program and continues to
progress toward meeting its business plan goals.
12. Estimate of the Hourly Burden of the Collection of Information
Based on past experience, SBA estimates that approximately 95% of all 8(a) Participant firms
will annually complete SBA Form 1450 with Attachments A, B and C. This is because a firm
can exit the 8(a) BD program at any time. Once a firm exits the program, it has no further
requirement to complete the SBA Form 1450 or provide Annual Review submissions to SBA.
Based on 7,814 8(a) participant active firms, there will be approximately 7,423 annual review
submissions per year (7,423 is 95% of 7,814) consisting of a completed Form 1450 with
Attachments A and B.
SBA Form 1450 and Attachments A, B & C
The approximate completion time for the SBA Form 1450, including Attachments A, B and C, is
2 hours per Participant firm per year. This estimate is based upon the Agency’s use of the Form
1450 over the past several years.
Total Burden Hours: 7,423 submissions x 2 hours per submission =14,846 hours annually.

Justification for SBA Form 1450

-5-

OMB Form 83-I

Hour Cost Burden: As detailed below, the total cost burden for Participating firms to complete
annually Form 1450 with Attachments A, B and C = $857,504.96.
A company official with roughly the pay, benefits and responsibilities of a GS-12, step 1,
($28.88 per hour for 2011 General Services (GS) base pay schedule) manager will complete the
form. Assuming approximately 100 percent for overhead, general and administrative, and other
employee-associated costs, the manager’s time will cost the company approximately $57.76 per
hour. At $57.76 per hour, for each Participant firm, the 14,846 hours for all Participant firms
will cost $857,504.96 annually.
Total Annual Cost Burden for all Participating firms to complete annually Form 1450, including
Attachments A, B and C: $857,504.96.
13. Estimate of total annual cost burden of submission.
There are no capital, start-up or operational and maintenance costs to the 8(a) Participants as a
result of this information collection.
14. Estimated Annualized Cost to The Federal Government
For Form 1450 with Attachments A, B and C, each form will require approximately two hours of
work at a GS-13 complexity level for review and analysis, which will include a review of the
information on the form, data entry into the computer system, and filing. This estimated
annualized cost is based upon our experience in performing numerous reviews of this form. We
assume the level of review correlates to a base salary for a GS-13, step 1, ($34.34 per hour for
2011 General Services (GS) base pay schedule). 7,423 submissions reviewed at approximately
two hours for each form would result in 14,846 total hours of work. At $34.34 per hour at a GS13, step 1 salary, the total cost for the review will be $509,811.64
15. Explanation of Program Changes in Items 13 or 14 on OMB Form 83-I
There has been a slight increase in the number of respondents to this information collection.
16. Collection of Information Whose Results Will Be Published
The results of the information collected will not be published, except perhaps in aggregated form
as part of program or agency reports.
17. Expiration Date For Collection of Information
Not applicable.
18. Exceptions to Certifications in Block 19 on OMB Form 83-I
Not applicable.
19. Collection of Information Employing Statistical Methods

Justification for SBA Form 1450

-6-

OMB Form 83-I

This collection of information does not employ statistical methods.

Justification for SBA Form 1450

-7-

OMB Form 83-I

ATTACHMENT:
SBA 30
SYSTEM NAME:
SERVICING AND CONTRACTS SYSTEM/MINORITY ENTERPRISE DEVELOPMENT
HEADQUARTERS REPOSITORY--SBA 30
SYSTEM LOCATION:
Headquarters and Field Offices. See Appendix A.
CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM INCLUDE:
Applicants and program participants in SBA's 8(a) Business
Development program.
CATEGORIES OF RECORDS IN THE SYSTEM INCLUDE:
8(a) Business Development program applications, business
development working files, business plan files and contract files
containing personal and financial information.
AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
Public Law 100-656, Small Business Act 15 U.S.C. 636, section (j)
(Technical and Management Assistance); Public Law 100-656, 15 U.S.C.
637, section 8(a) (Business Development).
PURPOSE:
To collect confidential business and financial information used to
determine if applicants and current 8(a) participants are in compliance
with statutory and regulatory requirements for continued eligibility
for program participation. This information facilitates the Agency in
carrying out the functions of the Office of 8(a) Business Development.
ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES
OF USERS AND THE PURPOSES OF SUCH USES, THESE RECORDS MAY BE USED,
DISCLOSED, OR REFERRED:
a. To a Congressional office from an individual's record, when that
office is inquiring on the individual's behalf; the Member's access
rights are no greater than the individual's.
b. To SBA volunteers, contractors, interns, grantees, experts and
who have been engaged by SBA to assist in the performance of a service
related to this system of records and who need access to the records in
order to perform this activity. Recipients of these records shall be
required to comply with the requirements of the Privacy Act of 1974, as
amended, 5 U.S.C. 552a.
c. To the Federal, state, local or foreign agency or professional
organization which investigates, prosecutes, or enforces violation or
potential violation of law, arising by general or program statute, or
by regulation, rule, or order.
d. To the Department of Justice (DOJ) when any of the following is
a party to litigation or has an interest in such litigation, and the
use of such records by DOJ is deemed by SBA to be relevant and
necessary to the litigation, provided, however, that in each case, SBA
determines the disclosure of the records to DOJ is a use of the
information contained in the records that is compatible with the
purpose for

Justification for SBA Form 1450

-8-

OMB Form 83-I

[[Page 14922]]
which the records were collected: SBA, or any component thereof; any
SBA employee in their official capacity; any SBA employee in their
individual capacity where DOJ has agreed to represent the employee; or
The United States Government, where SBA determines that litigation is
likely to affect SBA or any of its components.
e. In a proceeding before a court, or adjudicative body, or a
dispute resolution body before which SBA is authorized to appear or
before which any of the following is a party to litigation or has an
interest in litigation, provided, however, that SBA determines that the
use of such records is relevant and necessary to the litigation, and
that, in each case, SBA determines that disclosure of the records to a
court or other adjudicative body is a use of the information contained
in the records that is a compatible purpose for which the records were
collected: SBA, or any SBA component; any SBA employee in their
official capacity; any SBA employee in their individual capacity where
DOJ has agreed to represent the employee; or The United States
Government, where SBA determines that litigation is likely to affect
SBA or any of its components.
f. To appropriate agencies, entities, and persons when: SBA
suspects or has confirmed that the security or confidentiality of
information in the system records has been compromised; SBA has
determined that as a result of the suspected or confirmed compromise
there is a risk of harm to economic or property interests, identity
theft or fraud, or harm to the security or integrity of this system or
other systems or programs (whether maintained by the Agency or entity)
that rely upon the compromised information; and the disclosure made to
such agencies, entities and persons is reasonably necessary to assist
in connection with SBA's efforts to respond to the suspected or
confirmed compromise and prevent, minimize, or remedy such harm.
POLICIES AND PRACTICES FOR STORAGE, RETRIEVAL, ACCESS, RETENTION AND
DISPOSAL OF RECORDS:
STORAGE:
Electronic database records reside on SBA secured mainframe system.
RETRIEVAL:
Name of individual and business name.
SAFEGUARDS:
Access and use is limited to persons whose official duties
designate such a need; personnel screening by password is used to
prevent unauthorized disclosure.
RETENTION AND DISPOSAL:
In accordance with SACS/MEDHR NI-309-03-4.
SYSTEM MANAGER(S) AND ADDRESS:
PA Officer, Associate Administrator for 8(a) Business Development
and the Field Office Systems Manager. See Appendix A.
NOTIFICATION PROCEDURES:
Individuals may make record inquiries in person or in writing to
the Systems Manager or PA Officer.
ACCESS PROCEDURES:

Justification for SBA Form 1450

-9-

OMB Form 83-I

PA Officer or Field Office Systems Manager will determine
procedures.
CONTESTING PROCEDURES:
Notify officials listed above and state reason(s) for contesting
and proposed amendment(s) sought.
RECORD SOURCE CATEGORIES:
Small business applicants or participants in the 8(a) Business
Development program.

Justification for SBA Form 1450

- 10 -

OMB Form 83-I