SBA issues new federal regulations for businesses
FROM STAFF REPORTS Gulf Breeze News news@gulfbreezenews.com

On June 30, new U.S. Small Business Administration regulations took effect that require companies with federal contracts to recertify their size status as "small businesses." These actions will increase opportunities for more small businesses to receive contracts from the federal government.

"SBA is making tremendous progress improving federal contracting opportunities for small businesses," agency Administrator Steven Preston said. "As part of those reforms, we are now implementing the recertification rule - announced last November - to ensure federal rules properly classify small business contracts."

Recertification is necessary because federal agencies have been able to count all contracts originally awarded to small businesses as small business contracts for up to 20 years, even if those companies were acquired by large corporations.

Starting June 30, any small business that merges or is acquired must immediately "recertify" its size. If the company is no longer small, the contract continues, but the federal government can no longer count it as a "small" contract. Federal agencies will also immediately modify all existing long-term (over five years) contracts to require small businesses to recertify their size status for acquisitions, mergers and novation requests and to recertify their size status prior to an option being exercised. All existing contracts of less than five years will recertify when their first option is exercised. The vast majority of these contracts have one-year options.

Under these rules, most large businesses credited with small contracts will no longer be counted as small, effective June 30. Nearly all the remaining large businesses will be scrubbed from the database within a year. As a result, federal agencies will need to increase efforts to identify and contract with new small businesses to meet their small business contracting goals - 23 percent as directed by Congress.

Because more than five million actions are recorded in the federal government's contracting database each year, as a practical measure contracting officers are being allowed to review short-term contracts as they are renewed annually.