Annual size recertification may become part of SBA regs

Large federal businesses preying on weaknesses in the Small Business Administration's contracting programs to win work intended for small companies could face more robust requirements intended to aid small businesses, according to regulations in the Small Business Reauthorization and Improvements Act of 2006.

Chief among the new regulations are annual size recertifications. While SBA proposed annual recertifications for small businesses in 2002, it has been debating how to enact the measure since, SBA officials previously said.

During a recent interview with Washington Technology, Karen Hontz, SBA associate administrator for government contracting, said SBA staffers were still discussing the issue and hoped to publish something soon.

SBA certifies companies in a handful of its contracting programs, such as the 8(a) Business Development program, but allows self-policing and self-certification for the vast majority of companies that the federal government considers small businesses.

The Reauthorization Act was introduced by the Senate Wednesday, and today Sen. John Kerry (D-Mass.) took the floor to speak on the issue.

"We must stop fraudulent misrepresentation by large firms, and require [SBA] to start looking out for the interests of small firms," Kerry said.

The issue of large companies winning small-business contracts has come to the forefront over the last few months as reports surfaced showing some of the largest government contractors, such as Lockheed Martin Corp., Northrop Grumman Corp. and GTSI Corp., atop the list of small-business contract winners for 2005.

The reauthorization bill strengthens several SBA loan programs, implements a women's procurement program and requires that more small-business procurement center representatives are part of contracting teams to ensure regulations are upheld.

The bill also requires large prime contractors to meet small-business subcontracting goals, or face stiff penalties that could include the federal government withholding payments, or paying its subcontractors directly if the company failed to pay its teammates.