Govology Webinar Announcement! Small Business Size Standards and Affiliation: Lessons for Every Federal Contractor, May 15, 2025, 1:00pm EDT

For small business set-aside contracts, including socioeconomic set-asides like the 8(a) program, a federal contractor must meet the SBA’s size standards. These size standards vary by industry and solicitation and are based on either average annual receipts or the number of employees. But size alone doesn’t tell the whole story. Many small businesses are surprised to learn that they could be deemed affiliated with other entities based on factors such as ownership, management, family relationships, or subcontracting. If the SBA finds companies affiliated, it will combine the receipts or employees of the various companies, which can disqualify a company from small business programs.

In this training, you will learn:

  • How the SBA determines business size using receipts or employee counts
  • When and how size standards apply in federal contracting
  • Common size determination pitfalls small businesses face
  • The SBA’s concept of affiliation and why it matters (and doesn’t always match up with common sense)
  • The various SBA rules governing affiliation, and what does not trigger affiliation
  • How sharing resources, including subcontracts, in certain contexts could trigger affiliation
  • Examples of affiliation inspired by actual situations
  • Tips for avoiding unintended affiliation and staying compliant
  • What happens if you’re found “other than small”—and how to respond

Whether you’re new to federal contracting or looking to grow your small business through set-aside opportunities or partnering with small businesses, this session will give you the tools to know about small business size standards, affiliation, and positioning your company to play by these rules. 

Hope you can join us! Register here.

GovCon FAQs: It’s Been Two Years–Has My Joint Venture Reached the End of the Road?

The lifespan of a joint venture is a frequently asked question that can be hard to find in SBA’s regulations if you don’t know where to look. Alternatively, people hear about the “two-year rule” and assume that’s the answer. This question comes up frequently because, like many topics in federal contracting, the answer requires some digging into the regulations and specifically the affiliation rules.   

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News Flash: SBA Issues Proposed Rule with HUBZone and Small Business Changes

The SBA has issued a new proposed rule addressing both the Historically Underutilized Business Zone
(HUBZone) Program and other small business updates. It is titled: “HUBZone Program Updates and Clarifications, and Clarifications to Other Small Business Programs.” In this post, we’ll provide an overview of some of the main highlights of the proposed rule, and will do a deeper dive on some aspects of the regulation in later posts.

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SBA: Ostensible Subcontractor Affiliation Arises from Improper Limitations on Subcontracting in Proposal

The SBA ostensible subcontractor affiliation rule has long confused contractors and their attorneys alike because its standards were not very clear. It was based on whether, in a small business contract, a subcontractor performs the “primary and vital requirements of a contract” or the prime contractor was “unusually reliant” on the subcontractor. SBA’s Office of Hearings and Appeals filled in the gaps on these terms. But in 2023, SBA updated its definition for these rules, declaring that if a small business prime contractor (other than under a general construction contract) met the limitations on subcontracting, it basically was not violating the ostensible subcontractor rule. A recent case looked at a circumstance where a small business prime contractor was not meeting the limitations on subcontracting.

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Koprince McCall Pottroff’s GovCon Handbook, SBA Small Business Size and Affiliation Rules, is Now Available!

We are pleased to announce that the Second Edition of the GovCon Handbook, SBA Small Business Size and Affiliation Rules, is now available!  

Is your small business really small? When it comes to federal government contracts, the answer can be a lot more complex than it sounds.

In this GovCon Handbook, government contracts attorneys provide an in-depth look at the size and affiliation regulations for federal contractors. Written in plain English and packed with easy to understand examples, this GovCon Handbook demystifies the SBA’s rules regarding small business status for government contracts.

This updated handbook was co-authored by me and Nicole Pottroff as well as firm founder Steven Koprince. It is now available through Amazon at this link.

New Defenses to the Ostensible Subcontractor Rule are Coming

You may have noticed that SBA issued a final rule last week that created sweeping changes to the SBA’s 8(a) Program regulations, but along with that, SBA made sure to slip in a change to the ostensible subcontractor rule that has been a sticking point for many contractors when facing affiliation concerns. With this final rule, SBA will update the regulations to provide contractors certain ways to defend against potential ostensible subcontractor rule affiliation, depending on the type of contract at issue. This represents a shift in thinking, related to how to combat allegations brought under this affiliation rule and could present some new wrinkles for contractors to consider when setting up subcontracting arrangements.

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Back to Basics: Types of Affiliation

This is a the second article of two taking you back to the basics of affiliation. The first, giving you a general overview of affiliation, can be found here. This follow-on article goes through the different bases for affiliation, as set forth in SBA’s affiliation regulations. Keep in mind though, this is still affiliation “basics” and does not go into a detailed analysis of each type of affiliation, as that would be a novel–not a blog.

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