U.S. Small Business Administration Seeks Comments on Proposed Regulations

7/12/2012

The U.S. Small Business Administration (SBA) is seeking comments on recently proposed regulations to determine if small businesses should be required to recertify their status for long-term orders. This is an extremely important issue for small businesses that work or wish to work with the federal government, as it could finally prevent large companies from poaching federal small business contracts.

Since 2007, federal agencies have been allowed to count orders issued against long-term contracts as awards to a small business for up to five years or the life of the contract, even if the small business is acquired by a large business or grows to be other than small. This is a loophole that enables large businesses to enroll and/or maintain their subsidiaries in federal small business programs. Over several years, this loophole allows large businesses to siphon off billions of dollars in federal small business funds.

Moreover, this allows federal agencies to count contracts awarded to large companies as small business contracts. The SBA then includes those contracts to large companies in its annual Small Business Procurement Scorecard. This misleads the public, Congress and the President on the amount of federal contracts dollars actually awarded to legitimate small businesses.

For example, during FY 2011 63 of the top 100 federal small business contractors were no longer small during 2011 but still won more than $14 billion in federal small business contracts.

We need to take this opportunity to tell the SBA that once a small business is no longer small, it must immediately recertify as other than small and any orders placed against the business¹ long-term contracts are not to be counted toward the agency¹s small business procurement goal.

Comment on this proposal at this link on or before July 16, 2012.