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SBA disappoints many growing small businesses by stating that new statutory 5-year period for eligibility is not effective yet

January 30, 2019 By Andrew Smith

Late last year, President Trump signed into law H.R. 6330, the Small Business Runway Extension Act of 2018 (the “Runway Extension Act”).  As detailed in our client alert on the Runway Extension Act, this law extends the measurement period for determining whether a contractor qualifies as a small business concern under revenue-based size standards from an average of the most recently completed five fiscal years, rather than the long-standing three-year measurement period. It is anticipated that many growing firms, which had or would soon come to exceed the revenue threshold applicable to their principal NAICS code(s), will gain additional years of “small business” status by including (often much lower) revenue totals from 4 and 5 years ago to determine their average annual revenue.

We noted that the Runway Extension Act amends the Small Business Act without expressly requiring implementation by the Small Business Administration (SBA), thereby allowing contractors reasonably to take the position that the Runway Extension Act is immediately effective, absent contrary guidance from the SBA.

In a move sure to disappoint the many small but growing services firms that Congress intended to help by passing the Runway Extension Act, SBA has now issued such contrary guidance.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=771894

See our earlier article on this subject at: https://gtpac.org/2018/12/20/bill-changes-small-business-size-measurement-term-from-3-to-5-years/ 

Filed Under: Contracting Tips Tagged With: NAICS codes, other than large business, SBA, size standards, small business

Bill changes small business size measurement term from 3 to 5 years

December 20, 2018 By Andrew Smith

On Monday of this week (Dec. 17, 2018), the president signed the “Small Business Runway Extension Act of 2018” into law.   The new law changes the basis on which a business determines whether or not it meets the federal definition of a “small business.”

Our friends at Koprince Law, LLC have published two articles about this change, providing details on how the size status under revenue-based NAICS codes will now be calculated using a five-year average instead of the longstanding three-year average.

As they point out, for some contractors, the new law is great news, as it will allow them to stay small longer.  For others, the opposite is true: the law could force those companies to stay large longer, or even change their self-certifications from “small” to “other than small” in SAM.

Read their articles here:

  • The Large Business Runway Extension Act: For Some Contractors, New Five-Year Size Period Will Backfire

  • UPDATE: Bill to Change Size Measurement Term from Three to Five Years Becomes Law

Filed Under: Contracting News Tagged With: NAICS codes, other than large business, SBA, size standards, small business

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