Senate Panel Backs Annual Recertification The Senate Small Business Committee has voted to require annual recertification of eligibility for federal small business programs. The provision is included in the SBA reauthorization bill, S. 3778. The committee unanimously recommended the bill on July 27. The committee’s ranking Democrat, Sen. John Kerry (MA), said in a statement, “We must stop fraudulent misrepresentation by large firms, and require the administration to start looking out for the interests of small firms that want to do business with the federal government.” Committee Chair Olympia Snowe (R-ME) said the bill would make it easier to prosecute companies that fraudulently claim small business status. It would require a high-ranking company official to certify the firm’s eligibility on every contract or grant proposal. SBA proposed annual recertification in 2003, but no final rule has been issued. Numerous studies produced inside and outside the government have documented that large corporations hold many contracts identified as going to small businesses. (See separate story.) Other procurement provisions in the Senate bill: *SBA would be authorized, but not required, to develop tiered size standards. *SBA would be directed to implement the set-aside program for woman-owned small businesses within 90 days after the bill was signed into law. The program has been delayed for more than five-and-a-half years. Net-worth limits on 8(a) business owners would be adjusted for inflation. *Agencies would be permitted to withhold partial payment from prime contractors who don’t pay their subcontractors in a timely manner, and the government could pay subcontractors directly. *To stop subcontractor “bait and switch,” a prime would be required to live up to small business subcontracting promises they made in their proposals. *SBA would be required to assign at least one procurement center representative to each major contracting activity. PCRs are tasked with promoting small-business set-asides and monitoring bundled contracts, but SBA currently has only a few dozen of them. *The “rule of two” would be waived for sole-source awards to businesses owned by service-disabled veterans. This provision brings the SDV program into line with 8(a) contracting rules. It would allow a sole-source award even if a second SDV firm was qualified to perform the work. *Companies that are majority-owned by venture capital firms would be eligible for Small Business Innovation Research grants, but agencies could award no more than 25% of their SBIR funds to VC-controlled companies. With only a few weeks left in this year’s congressional session, prospects for Senate action on the bill are uncertain. The House Small Business Committee has not yet approved its version of the reauthorization bill because of partisan disagreements. The legal authorization for SBA programs runs out Sept. 30, but Congress can pass a temporary extension. That happened with the last reauthorization bill in 2004. -