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By Nick Wakeman

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Nick Wakeman

SBA reopens comments on joint venture rule

The Small Business Administration has reopened the comment period for a set of rules it has proposed to meet requirements of the 2013 National Defense Authorization Act.

The one that caught my eye was the rule pertaining to joint ventures. SBA wants to allow joint ventures to be considered small businesses if all the partners in the venture qualify as small businesses. In other words, joint ventures made of small businesses are a small business.

That seems pretty straightforward, but SBA received so many comments that they are reopening the window to submit them. Originally, the comment period ended Feb. 27. It has now been reopened until April 6.

SBA wants to encourage more small businesses to form joint ventures as a way of getting small businesses to win more federal work.

Other rules of note include a new timeline and procedures for appealing a North American Industry Classification System code and the “affiliation” rule.

The affiliation rule comes into play when SBA wants to determine the connection between two people and whether that connection is part of a common interest. SBA wants to consider two firms affiliated if they do business together and are owned by married couples, parents, children, siblings and parties to a civil union.

Companies also will be considered affiliated if more than 70 percent of one company’s revenue is derived from work it does with the company during the previous fiscal year. Currently, there is no percentage attached to the regulation.

The requirement also is “rebuttable,” meaning that a company can appeal the determination. This is usually allowed when a firm is a startup, which has a limited business base.

The NAICS appeal comes into play when a solicitation is used under a certain code, and a potential bidder objects to that code. Currently, companies have 10 days to file an appeal, but that assumes that typically there are 30 days until proposals are due. SBA is concerned because some procurements have different due dates, so they don’t follow that timeline.

The agency is trying to determine what the right timeline should be.

Here is a link to the original Federal Register notice.

This is a link to the notice to reopen the comment period, though the bulk of the changes are described in the first federal register notice.

Posted by Nick Wakeman on Mar 09, 2015 at 9:20 AM


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