The SBA has rejected several recommendations for major changes in how the SBA calculates small business size status.
In commentary published in the Federal Register last week, the SBA rejected (among other things) recommendations that it use average employee count to evaluate the sizes of construction firms and that other firms’ sizes be measured by profits or net worth instead of average annual receipts.
The DoD has issued a final rule making major changes in the DoD “Pilot” Mentor-Protege Program. The rule took effect on March 23, 2018.
Among the major changes, DoD has both expanded and contracted the universe of potential proteges–and has included a mandatory certification that seems to completely misunderstand the SBA’s joint venture rules and processes.
Here is my take on the good, the bad, and the ugly from the final rule.
A newly released Government Accountability Office report provides a rare peek behind the curtain of how contracting officers assign North American Industry Classification System codes.
Contracting officers are required by 13 C.F.R. § 121.402(b) to designate the NAICS code that “best describes” the work to be performed. It sounds simple enough, but the report reveals that it can be tricky.
A “similarly situated entity” cannot be an ostensible subcontractor under the SBA’s affiliation rules.
In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that changes made to the SBA’s size regulations in 2016 exempt similarly situated entities from ostensible subcontractor affiliation.
A NAICS code appeal can be a powerful vehicle for influencing the competitive landscape of an acquisition. A successful NAICS code appeal can dramatically alter a solicitation’s size standard, causing major changes in the number (and sizes) of potential competitors.
But a NAICS code appeal cannot be filed until the solicitation is issued. As the SBA Office of Hearings and Appeals recently confirmed, a NAICS code appeal cannot be filed with respect to a presolicitation.
It is out with the old, in with the new at the U.S. Small Business Administration.
A proposed SBA rule change published Tuesday, April 18, would incorporate the 2017 NAICS code revision into the SBA’s size standards table. If the proposed rule is made final, it will replace SBA’s current size standards table, which SBA has relied on for making size determinations since 2012. The revised size standards table will add 21 new NAICS industries. The revised NAICS code table also will feature larger standards for six industries, smaller standards for two industries, and will switch one size standard from revenue-based to employee-based.
The SBA Office of Hearings and Appeals reaffirmed recently that a business need not manufacture the most expensive component of an item in order to be considered its manufacturer.
Rather, under the SBA’s size rules, a company may be considered a manufacturer if it adds important functionality to the end product, even if the proportion of total dollar value added by the company is relatively small.