Issues Center > Index of Issues > Government Contracting
U.S. Small Business Administration Recertification Rule
SBA Rule Summary
The Small Business Administration (SBA) issued a rule in November 2006 that became effective on June 30, 2007. This rule requires small businesses to recertify their size status on all federal contracts whenever they are acquired or merge with another company. It also requires annual recertification for long-term contracts, prior to the sixth year of performance, or whenever an option is exercised. SBA specifically rejected annual recertification because it "would place an excessive burden on contracting agencies and personnel."
The SBA rule will help assure that large companies are not counted as small businesses by agencies. This at times has happened when a large firm acquired a small company and the contracts by that small business continued to be counted as small when determining the number of small businesses contracting with agencies. The new rule will require recertification upon a small company being acquired by a large company, therefore preventing larger firms from being counted as small.
The Small Business Administration released a myth-facts document which further explains how the SBA rule will be implemented (below). Chamber Position on the SBA Rule
The Chamber supports the SBA rule and believes the rule is a balanced approach to address the issues of recertification with the burden it places on businesses to recertify. The Chamber's press release supporting the rule is below.
|
