SBA Rule: Annual Recertification, Tougher Penalties A proposed SBA rule will require annual recertification of companies in all small business contracting programs. The change was mandated by the 2010 Jobs Act. The law also stiffens penalties for size misrepresentation. SBA is proposing additional rule changes to incorporate those requirements: A contractor that willfully misrepresented its eligibility for small business programs would be liable for as much as three times the value of the contract involved, under the False Claims Act. The Jobs Act establishes “an irrefutable presumption of loss to the United States based on the total amount expended” as a result of a false representation. That provision will also increase criminal penalties for misrepresentation, giving new ammunition to prosecutors. Inspectors general have complained that federal prosecutors rarely pursued cases involving misrepresentation because convictions did not carry significant penalties. The proposed rule states that a willful misrepresentation of size status is a cause for suspension or debarment. The Venable law firm commented, “This rule will have a significant impact on contractors and substantially increases the severity of inaccurate small business size representations.” Liability is limited for unintentional misrepresentation. Under the new certification requirement, companies would have to update their listings in the Online Representations and Certifications Application (ORCA) database at least annually, or lose their eligibility for small business programs. The proposed rule is RIN: 3245-AG23 in the Oct. 7 Federal Register. Comments are due by Nov. 7.