Georgia Tech Procurement Assistance Center

You may have a choice in how to calculate your size

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Being a small business can have its advantages.  Federal procurement rules provide that certain contracting opportunities may be set-aside for small business competition.  Small businesses also may be exempt from certain procurement provisions, such as subcontracting plan requirements and coverage under Federal Cost Accounting Standards (CAS).  Prime and higher-tier subcontractors also are incentivized to use small businesses to meet their small business subcontracting goals under their required subcontracting plans.

However, small businesses only remain small to the extent that they are considered small under applicable North American Industrial Classification Standards (NAICS).  Generally, size is calculated based on the size standard applicable to the business’s industry code – average annual gross receipts or average annual number of employees.

Continue reading at:  Government Contracting Matters blog

Podcast: 2020 will be a busy year for federal procurement

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Fiscal year 2020, which coincides with calendar year 2020, started off busy on the federal contracting front.  Dan Snyder, the director of government contracts at Bloomberg Government, joined Federal Drive with Tom Temin for a look ahead.

Listen to the podcast at:  Federal News Network

More firms will now be eligible for federal government small business contracts

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More companies will be eligible to compete for federal contracts reserved for small businesses, due to the recent implementation of a 2018 law.

On Jan. 6th 2020, the Small Businesses Administration’s final rule to implement the 2018 Small Business Runway Extension Act took effect, increasing the period of measuring small businesses’ annual revenue from three to five years in the contract evaluation process.  This is “going to increase the pool of eligible participants and make a lot more companies eligible to participate for small business set asides,” said Daniel Snyder, director of contract analysis at Bloomberg Government.

The act was signed into law on Dec. 17, 2018.  Snyder said there was a delay in implementation because there were “a small fraction” of companies put at a disadvantage by the change, so the agency wanted to figure out how to best mitigate any negative impact.  The compromise was to “give small businesses the option to choose either three or five years and then there will be a phase-in period, so companies will be allowed to choose…whichever one puts them at a greater advantage until the phase-out period concludes.”  The transition period ends on Jan. 6, 2022.

Continue reading at:  Government Executive

Runway extended: SBA issues final rule implementing five-year period of measurement for receipts-based size standards

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After a year of uncertainty, the U.S. Small Business Administration (SBA) has issued its long-awaited final rule implementing the Small Business Runway Extension Act of 2018.  The final rule, which becomes effective on January 6, 2020, amends SBA’s receipts-based size standard for its procurement programs to adopt a five-year averaging period for calculating annual revenues of firms and their affiliates in all industries that are subject to SBA’s receipts-based size standards.  In addition, to help firms with declining revenues who might be adversely impacted by five-year period of measurement, SBA’s final rule includes a transition period until January 6, 2022, allowing firms to choose either a three-year averaging period or a five-year averaging period for calculating average annual receipts for size standards purposes.  For our discussion of the proposed rule issued in July 2019, please read the article here.

As SBA explained, a five-year averaging period should “allow more small firms to benefit from SBA’s small business assistance programs by extending their small business status for a longer period.”  It also may result in more large business contracts being set aside for small businesses under the “Rule of Two” because “[w]ith an expanded pool of small businesses, the Federal Government will have more qualified small businesses to choose from.”

Continue reading at:  Holland & Knight

Five-year annual receipts: Don’t start until SBA says “go!”

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Absent further action by the Small Business Administration (“SBA”) Office of Hearings and Appeals or a Federal Court, the GAO has effectively ended the argument as to whether the Small Business Runway Extension Act of 2018 (“Runway Extension Act”) immediately changed the annual receipt average for revenue-based small business size standards from three years to five.  In short, firms should continue to apply the three-year standard until SBA’s regulatory process runs its course.

Continue reading at:  Morrison & Foerster

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