SBA delay will have “huge consequences” for calculating small business program eligibility
In an article that appeared in Law360, Ms. Deborah Rodin criticized the U.S. Small Business Administration (SBA) for its disagreement with – and its consequent delay in adopting – The Small Business Runway Extension Act of 2018.
“The new law should allow growing small businesses to maintain their “small” status for longer,” wrote Ms. Rodin. But the SBA disagrees that the change became effective immediately and instead has indefinitely delayed implementation.
The new law extends from three to five years the period for determining a company’s size based on annual receipts. The change to a five-year look-back period for small business eligibility was designed to make the transition easier as a small business evolves to other-than-small status.
The change should “have instant effect on companies’ size representations for the new year…and on proposals for various contracting opportunities,” Ms. Rodin wrote.
For example, a company that has steadily progressed from a small business status under the three-year look-back period could still qualify as small if measured under the new law’s five-year period. But it could risk losing set-aside contracts by relying on the law’s five-year calculation while the SBA continues to apply the three-year rule.
“. . . [In its] seemingly arbitrary rule-making processes… the SBA may disagree with the wisdom of the change, but that is mostly irrelevant,” Ms. Rodin wrote. “As far as courts are concerned, changing a look-back period from three to five years would not seem to be the sort of area where agency discretion is even implicated, much less owed any deference.”
For the full article on Law360, please click here.
About Deborah Norris Rodin
Deborah Norris Rodin is a member of the firm’s Government Contracts practice group. She has broad experience with government contracts counseling and dispute resolution for clients in a diverse range of industries. She has experience litigating bid protests before the Government Accountability Office and the U.S. Court of Federal Claims and has worked on contract disputes and defense of claims brought against contractors under the False Claims Act. She has also advised clients on internal and government investigations and a variety of compliance issues affecting government contractors.
Contact Deborah Rodin:
875 15th Street, NW, Suite 725
Washington, DC, 20005
Phone: (202) 777-8959