The Associated General Contractors (AGC) of America has filed a lawsuit challenging a Small Business Administration (SBA) questionnaire for businesses which have received funds from the COVID-19 Paycheck Protection Program (PPP).
Carolinas AGC (CAGC) in a Dec. 14 posting describes the legal action, expressing concerns about the “controversial questionnaire asking for information business owners couldn’t have known when they originally applied for the funding.”
The SBA does “not have the right to use a secretly crafted form to gather unprecedented amounts of proprietary information that has little or nothing to do with the economic uncertainty that led businesses to apply for the loans in the first place,” AGC CEO Steve Sandherr said in a statement. The AGC lawsuit also claims that the public was not provided the questionnaire ahead of time for proper review and asks a federal court to restrict the use of it until the SBA can appropriately revise it.
CAGC president and CEO Dave Simpson said that “several projects are being delayed, cost of materials has risen, and some jobs have been canceled altogether. We need to feel confident that we can move ahead with the work of the industry and get the job done.”
“While Carolinas AGC appreciates the government ensuring the eligibility of PPP applicants, we do have problems with changing the rules midstream and requiring information that seems to go far beyond the intent of Congress,” the CAGC statement says.
The AGC lawsuit claims that the questionnaire does not ask borrowers to describe the status of their operations and the attendant business anxieties that they were experiencing at the time. Instead, it focuses on what came after, seeking information about the borrower’s business success or failure.
The lawsuit goes on to state that the questionnaire is “deeply troubling to many borrowers because their success or failure over the balance of 2020 could not possibly have been knowable in those early days of the pandemic when the economy was headed into a tailspin.” Furthermore, the form is full of yes/no options that fail to allow borrowers the opportunity to explain their circumstances, many which remain uncertain, CAGC says in its statement.