Author Archives: Stephanie Ellis

FAR Council Establishes New Size and Status Rerepresentation Rules

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The FAR Council recently published a final rule dealing with small business certification issues, effective on January 17, 2025. This final rule came about to ensure that certain parts of the FAR and SBA rules are consistent. The change? Adding additional circumstances that require an awardee to rerepresent its size and/or socioeconomic status for orders placed under a multiple-award contract (MAC) per FAR 52.219-28(c) Postaward Small Business Program Rerepresentation.

However, this FAR rule updates the regulation to match the SBA rule that had been issued in 2020, back when SBA consolidated its Mentor-Protégé Program. In the mean time, SBA had updated its recertification rules as discussed in this post outlining the new recertification rules. Under the recent regulation, SBA will be implementing its strategy to include new 13 C.F.R. § 125.12, which sets forth disqualifying size and status events, which would render a business “ineligible for future set-aside or reserved awards, including awards of set-aside or reserved orders against pre-existing unrestricted or set-aside multiple award contracts” if it causes the business to be other than small. In addition, “for a multiple award small business set-aside or reserve, a concern that recertified as other than small or other than the required small business program would be ineligible to receive options.

Unfortunately, the FAR rule will have to be updated again to deal with SBA’s January 2025 rule. Until then, below is what the FAR rule contains. Contractors must be aware of both rules to stay on top of their small business recertification requirements. And contractors may need to inform agencies about what the new SBA rules state.

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How Extraordinary! Revised SBA Rule Gives Clear Guidance on Extraordinary Circumstances

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Many of the SBA’s small business programs have restrictions on what are commonly referred to as “extraordinary circumstances” or “extraordinary actions.” It’s a topic that we have discussed many times before, including this blog post discussing a case at SBA’s Office of Hearings and Appeals, reviewing extraordinary circumstances in the context of control and operating agreements. SBA often discusses extraordinary circumstances in the context of joint venture control, where the managing venturer must control decisions except for those considered to be extraordinary. But there is a different meaning in the context of an entity seeking certification under an SBA socioeconomic program, where the qualifying individual must have control over all actions and circumstances except for those determined to be extraordinary. This post will focus on the latter situation. And, as any knowledgeable small business federal government contractor can attest to, knowing what actions are and are not extraordinary, is very important to maintain eligibility for the SBA’s programs.

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SBA Issues Final Rule to Streamline WOSB Program Rules

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In June, we reported on a Notice of Proposed Rulemaking that applied to the SBA’s Woman-Owned Small Business/Economically Disadvantaged Woman-Owned Small Business (WOSB) regulations. These proposed rules were intended to take the WOSB regulations and make them more consistent with the other types of set-aside programs offered by the SBA. Now, following the required period for comments from the general public, the SBA has published its Final Rule which will be effective January 3, 2025. Read ahead to find out more!

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SBA OHA: Operating Agreements Must Clearly Demonstrate Control

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A recent appeal before the U.S. Small Business Administration’s Office of Hearings and Appeals (OHA) upheld SBA’s denial of an application for a veteran-owned small business because its operating agreement gave too much control to a non-veteran owner and failed to identify a veteran as the highest officer. The decision in Facekay LLC demonstrates the importance of strict adherence to the control requirements laid out by the various SBA programs.

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Back to Basics: Small Business Sole Source Awards

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One of the perks of being certified in any of the SBA’s small business socioeconomic contracting programs is the fact that there is potential for a sole source award. What is a sole source award? Well, it’s a non-competitive award used when there is no expectation that two or more offerors will submit proposals, or using a dollar cap in the 8(a) program. (In this post we’re not talking about other exceptions to competition, such as only one responsible source). We most frequently see them used for contracts made to participants in the 8(a) Small Business Development Program, but the other programs (WOSB, SDVOSB, and HUBZone) have the ability to make sole source awards as well. So, let’s take a look and see what the FAR and SBA rules have to say about sole source awards in each of these programs.

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OHA Reminder: Don’t ignore Program Examination Questions from SBA . . . or Else

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Most of SBA’s socioeconomic programs (woman-owned small business, veteran-owned small business, HUBZone) have a requirement for the contractor to go through a recertification process, or program examination, every three years. 8(a) Participants have an annual review process, so they are reviewed even more frequently. But between these routine program recertifications, there is a possibility that the SBA will choose to perform an additional program examination to “verify the accuracy” of certification. And, as one SDVOSB firm found out, failing to cooperate with these interim program examinations can lead to decertification—a fate that no small business wants to risk.

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SBA Proposed Rule Clarifies Mentor-Protégé Misunderstandings

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In August, the Small Business Administration issued a proposed rule that was packed to the brim with changes to many of the SBA’s small business contracting programs. We’ve mentioned a few of the changes in prior blog posts. Gregory Weber, discussed potential changes to the SBA’s 8(a) Business Development Program that may result in more relaxed requirements. While Shane McCall, recently took a deep dive into proposed changes to past performance requirements for joint ventures. Today, we will focus on two additional proposed changes to the SBA’s Small Business Mentor-Protégé Program.

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