Why File: A Size Protest

We at SmallGovCon are excited to announce this first in a new line of blogs we call Why File. Our firm handles a wide variety of federal procurement and contract litigation matters–from SBA size and status protests to contract claims and appeals, and everything in between. One of the most common and important questions we get in that regard is, should I file? Of course, we can only directly answer that question for our current clients after reviewing the relevant facts giving rise to the potential filing. But through our new Why File series, we will cover some of the most common facts and circumstances that lead contractors to initiate litigation. So, without further adieu, here is the first blog in the series, covering some of the most common reasons contractors file size protests.

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Back to Basics: Calculating Small Business Size

Most contractors, when starting their journey into the world of federal contracting eventually run into the same question: What size is my business? In the world of federal contracting, the size of your business can determine whether you can bid on certain procurements, participate in certain programs, and more. Miscalculating or misrepresenting your business size could open you up to size protests, and other severe repercussions. So, knowing the accurate size of your business could be critical to the success or failure of your federal contacting business. But don’t fear, in this edition of our Back to Basics series, we will discuss some of the basics around calculating the size of your business and why it all matters.

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Reading the Tea Leaves from SBA’s Regulatory Agenda

We’re back with another edition of looking for interesting tidbits from SBA’s semiannual regulatory agenda. SBA (along with other agencies) provide a guide to upcoming regulations. This schedule can help contractors determine when SBA is likely to update certain rules. Here are a few key updates.

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COFC Confirms SBA Interpretation of Runway Extension Act

The Court of Federal Claims recently reviewed the Small Business Runway Extension Act, particularly SBA’s contention that it was not bound by the 5-year lookback period that Congress enacted for size receipt calculations. Now, SBA has issued its own rule that it will use the 5-year lookback period, at least after a two-year transition period, as discussed in our earlier posts. But there were still some cases working their way through the courts that examined how Congress implemented the Runway Extension Act and whether it applied to SBA or not. To make a long story short, the court agreed with SBA.

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SBA Proposes Increasing Size Standards in Professional, Management, and Administrative Industries

SBA’s recent proposed rule will increase size standards for a number of industries. The rule also said that SBA was thinking about lowering size standards. While most often, size standards increase over time, SBA can also lower them. However, SBA decided against lowering them. Read on for what standards will change.

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SBA’s Receipts Calculation Transition Period: Is It Legal?

When the SBA issued its final rule implementing the Runway Extension Act’s 5-year receipts calculation period earlier this month, it allowed for a two-year transition: until January 6, 2022, the SBA will allow businesses to choose either a 3-year or a 5-year receipts calculation period.

This transition phase is helpful, the SBA noted, to small businesses that might be adversely affected by an abrupt change to the receipts calculation period—namely, businesses with declining revenues over the preceding five years that are nonetheless close to the applicable size standard cap.

SBA’s accommodation of these companies is, by any measure, a commonsense solution to prevent inadvertent harm caused by the Runway Extension Act. But notwithstanding this laudable policy objective, is the new transition period legal?

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5-Year Receipts Calculation Period Effective January 6, 2020

At SmallGovCon, we’ve closely followed the SBA’s implementation of the Small Business Runway Extension Act. After much confusion caused by the delayed implementation of the Act, there’s finally a light at the end of the tunnel: the 5-year receipts calculation period will become effective January 6, 2020.

Importantly, the SBA’s final rule implements relief for businesses that will be adversely affected by the change to a 5-year receipts calculation period.

Let’s take a look.

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