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Proposed SBA Rule Changes Impacting Government Contractors: Key Considerations and Potential Consequences
The Small Business Administration (SBA) has proposed a new rule that could have significant impacts on government contractors, particularly in the realm of size and socioeconomic status recertification. The proposed rule aims to consolidate and clarify the recertification rules across all small business programs, addressing inconsistencies and recent decisions that SBA believes misinterpreted its regulations.
Key changes in the proposed rule include distinguishing between “qualifying” and “disqualifying” recertifications, setting specific timelines for recertification after certain triggering events, and outlining the effects of a disqualifying recertification. These changes could have far-reaching implications for contractors, affecting their eligibility for set-aside contracts, options under multiple award contracts, and pending proposals.
The proposed rule could also significantly impact the M&A market for small business government contractors. By making it more difficult for contractors to continue pursuing set-aside contracts after a disqualifying recertification, the rule could diminish the acquisition value of small businesses and discourage small-to-small business acquisitions.
Comments on the proposed rule are due by October 7, 2024, and stakeholders are encouraged to provide feedback on the potential impacts of the rule. The rule could have wide-ranging effects on government contractors, and it is important for businesses to understand and prepare for these changes.
