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Federal Market Intelligence for Small Business |
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Mid-tier firms now bidding for set-asidesAmidst confusion over implementation of the Small Business Runway Extension Act, some mid-tier firms have already taken advantage of the new law to reclassify their size and are now bidding on small business set-asides, according to testimony at a recent House subcommittee hearing on the new law. The runway extension act, which became law on Dec. 17, 2018, amended the Small Business Act to allow service-based federal contractors to determine whether they meet size standards as small businesses based on average gross receipts for five years. Previously, the calculation was based on three years. However, Congress did not specify an implementation date for the law and as a result contractors have been uncertain whether it went into effect on Dec. 17, the day it was signed by President Trump. Small Business Administration officials have asserted that there must be a rulemaking before the law goes into effect. “Unfortunately, SBA has created unnecessary confusion in the small business procurement community by erroneously claiming that the (runway extension act) was not immediately effective and that it does not even apply to the SBA,” David S. Black, partner with Holland & Knight LLP, testified to the House Small Business Subcommittee on Contracting and Infrastructure on March 26. Black and others say that under a widely-accepted legal principle the law went into effect immediately on Dec. 17, 2018. Meanwhile, some mid-tier contractors already have acted upon the new law, revising their size status to small, and are now competing for set-asides, Black said at the hearing. “It is important for Congress to understand that mid-tier service contractors are enjoying the benefits of (the runway act) now. Such contractors have been submitting proposals in reliance upon the new five-year standard, which—notwithstanding SBA’s erroneous view—has been in effect for over three months,” Black told the committee. Owners of two mid-tier firms in that situation testified at the hearing. Estimates of the total number of such firms were not immediately available. Black also pointed out that not all mid-tiers benefited from the runway act. Those that were shrinking and had hoped to achieve small business status soon will have to wait longer under the revised calculation. More information: Hearing website:https://bit.ly/2FA9L3U
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