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SBA Announces New Rules

By Kristin Edelhauser
Entrepreneur Daily
November 15, 2006

The SBA announced new rules Tuesday that they say will help small businesses acquire more federal contracts. Under the new rules, small businesses will need to reconfirm their size after five years of their contract, and when they are purchased by or merged with a larger business.

The agency has been criticized for giving larger companies contracts that should be set aside for small businesses. For example, a recent Congressional study shows that companies like Microsoft, Google and Exxon Mobil have all received small business contracts in the past. The report blamed those errors on inaccuracies in a government database.

Not everyone agrees that the new rules will benefit small businesses. Representative Nydia Velázquez (D-NY), the expected chairwoman of the House Small Business Committee, says in the New York Times that the rules fail to address the real problem: "Eighty percent of the contracts miscoded were due to other factors than small businesses simply growing too large, which is all this regulation focuses on."

To find out more about the outlook for small businesses post election, read our interview with Representative Velázquez.



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