Tag Archives: SBA size determinations

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

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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.

SBA Reminder: Ensure all Joint Venture Requirements are Met to have a Successful JV

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Joint ventures pursuing a contract under any of the SBA’s socioeconomic programs (Woman-Owned Small Business Program, Service-Disabled Veteran-Owned Small Business Program, 8(a) Program, and HUBZone) all have requirements beyond the general requirements that a non-joint venture prime contractor must meet to be eligible for those types of set-asides. The joint venture must be considered small, which may take into account the size of both venturers, and the joint venture agreement itself must contain specific information. But what happens when the regulatory text isn’t exactly clear on how those two requirements fit together? And how are unsuccessful offerors, contracting officers, and the SBA itself supposed to challenge the status of those joint ventures if the regulatory text doesn’t explicitly provide for the means to do so? Read our analysis of the decision in Chenega Base and Logistics Services, LLC to find out!

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Beyond Tax Returns: Federal District Court Says Contractors Must Include Information Outside Tax Returns in Calculating Size

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When it comes to calculating a company’s receipts for size purposes, the procedure for is (or at least was) pretty simple: Look at the company’s tax returns. Indeed, it has long been SBA’s position that they can only consider tax returns, as noted in Nordstrom Contracting & Consulting Corp., SBA No. SIZ-5891 (Mar. 7, 2018) (“[T]here is no authority for an area office to consider any evidence apart from tax returns…when calculating a firm’s average annual receipts.”) among other cases.  In other words, if something was not mentioned in a tax return, it couldn’t be considered by SBA. The only exception was if the tax returns were not filed, in which case SBA will review financial statements or similar information in lieu. 13 CFR § 121.104. Therefore, other than that exception, a contractor only needs to rely on the information in its tax return when making its size representation.

But the U.S. District Court of the District of Columbia (DDC) thinks otherwise. On May 18, 2023, it entered a decision on opposing motions for summary judgment in a size protest that had become a False Claims Act case. In this decision, it concluded the opposite: Contractors must in some cases consider information outside their tax returns. Let’s take a deeper dive.

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Free Webinar Event: Mastering Size Calculations for SBA Size Determinations hosted by LeftBrain, December 12, 2023, 1:00pm EST

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If your small business status hangs in the balance, you can’t afford mistakes in your next SBA size determination. Join us for an in-depth look at key accounting strategies and lessons from recent SBA size appeal decisions involving affiliation issues, joint ventures, and receipts calculation. Learn how to properly account for inter-affiliate transactions, raise strong arguments, and avoid missteps that could lead to an adverse size determination. Register now to demystify SBA rules and gain the knowledge needed to respond to size protests and succeed in appeals.

If you are interested, please register here.

Event: Meet the Buyers Fall 2023 Conference | October 17-19 | Scottsbluff, Nebraska

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Please join attorney John Holtz, as he heads back to his home state of Nebraska, to the Meet the Buyers Conference. This is Nebraska’s premier government contracting conference where businesses can advance their contracting knowledge, connect with other business owners, and network directly with agency representatives and buyers. John will be doing two presentations: joint ventures, as well as size and affiliation issues.

Don’t miss the chance to meet directly with Federal, State, and Local government agency reps, government contracting industry people, and resource providers and please stop by the Koprince McCall Pottroff table and say hi to John. More information and registration here.

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

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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.

2022 NDAA Requires Prompt SAM Update If SBA Issues Adverse Size Determination

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If, as the result of a size protest or appeal, the SBA makes a final determination that a company is not a small business, the company will be required to update SAM within two days to reflect that it is no longer small. And if the company doesn’t recertify within two days, the SBA will do the honors and update the company’s SAM profile.

This tough new requirement is part of the compromise version 2022 National Defense Authorization Act, which is likely to be signed into law in the coming weeks, although it is unclear when the SBA’s regulations will be revised to implement the change.

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