SBA recently issued a proposed rule that would significantly change a government contractor’s obligations to recertify its size and socioeconomic status under set-aside contracts and the effect of such recertification.
- The Rule impacts eligibility for set-aside contracts, significantly alters the landscape for mergers and acquisitions (M&A) in the government contracts industry, and could have other unintended downstream consequences.
- Currently, larger companies can acquire small businesses and continue performing their small business contracts for some time, increasing the market value of these small businesses. The new rule would make this impossible, as companies would lose eligibility for future orders after making a disqualifying recertification.
- This could significantly reduce the acquisition value of small businesses and make it more difficult for them to successfully compete in the mid-sized market.
The clock is ticking on submission of comments, which are due by October 7th.
