The SBA has issued a final rule implementing the changes to the limitations on subcontracting enacted by Congress in the 2013 National Defense Authorization Act.
The SBA’s final rule takes effect June 30, 2016–and will significantly change the way the limitations on subcontracting are calculated and enforced moving forward.
Under the SBA’s affiliation rules, one of the many ways a small business can be deemed affiliated with another is through the economic dependence rule: where a small business derives 70% or more of its revenues from another entity, the SBA ordinarily considers it to be economically dependent upon—and thus subject to the control of—that other entity.
So it was in a recent decision from the SBA’s Office of Hearings and Appeals (“OHA”), which confirmed the so-called “70% rule” for economic dependence.
It is hard to believe that Tuesday is Groundhog Day already. As we all wait in anticipation for him to emerge from his burrow, and hopefully not see his shadow, we offer you some reading material to help make your wait more enjoyable.
This final January 2016 edition of SmallGovCon Week In Review brings you a look at the Lockheed Martin/Leidos merger, a cautionary tale about the dangers of violating federal prevailing wage laws, new principles behind the VA’s procurement strategies, and much more.
Federal agencies must classify procurements for supplies under the appropriate manufacturing or supply NAICS code, not under a wholesale trade or retail trade NAICS code.
In a recent NAICS code appeal decision, the SBA Office of Hearings and Appeals confirmed that supply procurements should not be classified under wholesale or retail trade NAICS codes–and rejected a prospective offeror’s claim that the agency should have assigned a wholesale trade NAICS code to the solicitation.
Large prime contractors operating under individual subcontracting plans would receive credit for small businesses performing at any subcontracting tier, according to a proposed rule issued yesterday by the SBA.
The proposed rule also requires large primes to assign a NAICS code and size standard to “solicitations” for subcontracts–a notion that may come as a surprise to prime contractors, many of whom do not typically issue formal subcontract solicitations.
Small Business Development Centers and Procurement Technical Assistance Centers would be permitted to issue advisory small business size status opinions under a proposed rule published last week by the SBA.
The proposed rule, which implements a section of the 2013 National Defense Advisory Act, establishes a “safe harbor” from fraudulent misrepresentation penalties for a small business that obtains an advisory size opinion from a SBDC or PTAC. But the proposed rule acknowledges that SBDCs and PTACs are not required to provide such advisory opinions–and that new funding will not be awarded for this purpose.
A firm’s small business size status for federal procurements is measured by the firm’s revenues, not by its profits.
As the SBA Office of Hearings and Appeals explained in a recent size determination, measuring small business status by reference to profits would allow some very large companies to qualify as “small.”