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ALERT M|E: On May 25, a small yet impactful “technical correction” to SBA’s regulations took effect. Notably, it could have a profound impact on small businesses with multiple award contracts (MAC), particularly for those involved in M&A.

SBA appears to have changed the eligibility of small businesses to receive options or compete for task orders issued under MACs where the company’s size/status changes. Longstanding interpretation of SBA’s regulations is that, where a company becomes “other than small” or no longer has socio-economic status (WOSB, SDVOSB, HUBZone, etc.) as a result of a novation, merger, acquisition, or negative status determination, the business would still be eligible to receive options or compete for orders under MACs, provided that the CO had not required the contractor to recertify its size/status. If the concern was other than small, the agency wouldn’t be allowed to count the options or task orders towards its small business goals.  See Analytic Strategies, Inc., SBA No. VET-268 (Jan. 29, 2018).
It now appears that this rule has been uprooted. Under the same circumstances, SBA’s regulations now appear to consider small businesses ineligible to receive options or compete for task orders, regardless of whether the CO requests a new certification.
Direct Final Rule:

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