3 New SBA Rules Affect Small Businesses in Significant Ways:

Newly-published rules by the Small Business Administration (SBA) address the justification and approval process associated with large sole-source contract awards to 8(a) firms; address parity among 8(a), HUBZone, and SDVOSB firms; and propose increases in the small business size standards for some industries.  Public comment is being solicited on the last item.

Specifically, the rules:

1.     Require federal agencies to issue a Justification and Approval prior to the award of 8(a) sole source contracts over $20 million;

2.     Clarify a contracting officer’s ability to use discretion when determining whether an acquisition will be restricted to small businesses participating in the 8(a), HUBZone or service-disabled veteran-owned small business (SDVOSB) programs; and

3.     Propose increases in the small business size standards for dozens of service industries in NAICS codes 54 and 81. 

The first two rules were issued as interim rules by the SBA and the Federal Acquisition (FAR) Council, and are effective immediately.  The third item is a proposed rule.  All were published on March 16, 2011 in the Federal Register.

Details of the ruling:  

Justification and Approval for 8(a) Sole-Source Awards Above $20M

The J&A must be approved by an appropriate official (as currently defined by FAR 6.304) and made public after award of the contract.  Under the interim rule, the J&A must document the reasons for making a sole-source award rather than a competitive award under the 8(a) program.  Here is the full text of the rule:Justification and Approval of Sole-Source 8a Contracts 03.16.2011.

Parity Among 8(a), HUBZone, or SDVOSB Programs

Under the interim rule, contracting officers will have the discretion to determine whether an acquisition will be restricted to one of these three programs.  The full text of the rule is available here: Socioeconomic Program Parity 03.16.2011.

Service Industries – Small Business Size Standards

The SBA issued a proposed rule increasing the small business size standards for 35 industries and one sub-industry in North American Industry Classification System (NAICS) Code 54, Professional, Scientific and Technical Services, and one industry in NAICS Code 81, Other Services.  The full text of the proposed rule is available here: Small Business Size Standards – Proposed – 03.16.2011.