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SBA Amends Size Regulations For Contractors But Not All Pleased

The Governmnent Contractor
November 20, 2006

Large-business participation in small-business contracts has received considerable attention in 2006. See 48 GC ¶ 255; 48 GC ¶ 275. Amid consternation that “loopholes” in the Small Business Administration’s policies allow large businesses to perform contracts intended for small businesses, the SBA recently announced regulatory changes that will require firms to recertify their small-business status when options are exercised on their contracts that last longer than five years. Further, under the new regulations, all small businesses must recertify that they are still small at the end of the first five years of any Government contract. According to SBA Administrator Steven C. Preston, the changes “will go a long way toward ensuring that contract awards get in the hands of small business owners, federal agencies get the proper credit toward their small business contracting goals and small business contracts are fairly and accurately reported.” But small-business watchdog, the American Small Business League is not impressed by the changes. The ASBL cites the SBA’s inspector general who urged small-business size recertification on an annual basis, and believes that the five year period is simply too long. “This policy should be evaluated by asking one question,” said Lloyd Chapman, ASBL president, “Will the policy allow the government to report contracts to Fortune 1000 companies as small business awards? The answer is yes.”



 
 

 
 

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