Small Business

Last week, the U.S. Small Business Administration (“SBA”) published a proposed rule that if implemented will increase the opportunity for large and small businesses to partner on unrestricted competitions and small business set asides by creating a comprehensive Mentor-Protégé Program that will allow any type of small business contractor to partner with another company without risking the contractor’s small business status.  The new comprehensive Program is modeled on the current 8(a) Mentor-Protégé Program, which will remain in effect but be modified under the proposed rule to create more opportunities for contracting with small disadvantaged businesses.  The proposed rule comes shortly after another proposal from the SBA that—among other sweeping changes—will create new opportunities for partnerships between similarly situated small businesses, such as allowing joint ventures to qualify as small so long as each individual partner qualifies as small.

The proposed rule implements provisions of the Small Business Jobs Act of 2010 and National Defense Authorization Act for Fiscal Year 2013, which together authorized the SBA to expand the current 8(a) Mentor-Protégé Program to all small businesses, including HUBZone, women-owned, and service-disabled, veteran-owned small businesses, as well as small businesses that do not qualify for a particular socioeconomic subcategory.  The SBA estimates that approximately 2,000 small businesses could participate in the new comprehensive Program, resulting in contracts valued at approximately $2 billion per year.  In addition to creating opportunities for large and small businesses to partner on small business set asides, the comprehensive Program will likely benefit both large and small businesses in unrestricted competitions.  If implemented, small businesses could compete for larger awards and large businesses could take advantage of price evaluation preferences when partnering with HUBZone small businesses and potentially derive other benefits currently offered to large businesses that subcontract with protégé firms, such as receiving evaluation preferences or additional credit toward obtaining small business subcontracting goals.Continue Reading SBA Proposes Comprehensive Small Business Mentor-Protégé Program

Those of us who write about the Affordable Care Act seldom have the chance to use the phrase “overwhelming bipartisan support.”  The Hire More Heroes Act of 2015 provides a welcome opportunity to do so.  The Act, designed to encourage small businesses to hire veterans, has received bipartisan and bicameral support in Congress.  If it becomes law – a prospect that looks increasingly likely – it will complement the administration’s recent push to encourage government contractors to employ more veterans.  Although the Hire More Heroes Act would offer valuable benefits to businesses, this post flags a few unpleasant surprises that could arise in its implementation.  
Continue Reading An Apple a Day (From the VA) Keeps the Tax Man Away

On November 7, 2014, the U.S. Small Business Administration (SBA) issued an Advanced Notice seeking comments on potential revisions to policies governing the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs, which facilitate the commercialization of technology through small business entrepreneurship.  The Programs require certain federal agencies to reserve a minimum percentage of their budgets to fund research and development activities that have potential commercial applications.  The government’s initial investment under the Programs is relatively minimal, but participants are able to secure increased funding through three successive phases of development, eventually resulting in the commercialization of a technology with non-Program funds.  The Programs encourage sustained development of a technology by requiring that first-, second-, and third-phase awards generally be made to the same concern, and by establishing broad protections for data produced in the performance of an award.  The SBA is specifically seeking comments on potential revisions to its policies with respect to these two key features of the Programs.
Continue Reading SBA Seeks Comments on Third-Phase Awards and Data Rights under the Small Business Innovation Research and Technology Transfer Programs

On September 10, 2014, the U.S. Small Business Administration (“SBA”) issued two proposed rules to increase employee-based size standards for manufacturing and various other industries in connection with the agency’s ongoing review of existing size standards.  The SBA has the discretion to establish size standards as a threshold under which firms are eligible to participate in small business programs, including contract set-asides.  The SBA analyzes the characteristics of specific industries, such as average firm size and the small business share of revenue from federal contracts, to determine which size standard is most appropriate for a particular industry.  Based on an application of this analysis to recent data, the SBA is proposing to increase size standards for 239 industries, which would enable approximately 1,630 new firms to participate in small business programs.  In addition, the SBA is proposing to establish a new 1,250 employee size standard, allowing for a more precise classification of larger small businesses, and to remove or modify a number of unique size standards applicable to specific sub-industries.

The proposed rules are the products of a statutory mandate in 2010 requiring the SBA to review all size standards by 2015, after which the SBA must periodically review size standards every five years.  The last comprehensive review of existing employee-based size standards took place in the late 1970s and early 1980s.  Since that time, the vast majority of employee-based size standards have not been subject to review.  As the SBA itself recognizes, existing employee-based size standards are “no longer supportable” when compared to economic realities in a number of industries.Continue Reading SBA Increases Size Standards for Manufacturing and Various Other Industries