SBA drafting classification rule

Small Business Administration requirements

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The Small Business Administration is finalizing a draft rule to ensure that regulations surrounding small-business contracting in government fit the current environment of awarding longer-term contracts.

Currently, small businesses are classified as such only once for a contract's duration. This classification makes them eligible for many set-aside contracting dollars. However, as contract terms grow longer, small businesses may turn into large businesses, but their classifications do not change.

The draft rule will change the classification period to a shorter term, said Linda Williams, associate administrator for policy, planning and liaison in the Office of Government Contracting and Business Development at SBA. The draft rule soon will be sent to the Office of Federal Procurement Policy and then published in the Federal Register for comment, she said.

The General Services Administration's Federal Supply Service (FSS) is moving its multiple award schedules to what it calls "evergreen" contracts. Under these, vendors basically receive a 20-year contract, which has five base years and three five-year options.

Recognizing the classification problem this situation causes, GSA has received an exemption from the current classification rule and has put its own rule in place, said Patricia Mead, deputy assistant commissioner of FSS' Office of Acquisition. Under its rule, the vendor will go through re-classification at the end of every option period, or once every five years, she said Dec. 3 at a conference sponsored by the Computing Technology Industry Association.

However, GSA and SBA started working on the proposed rule to change the classification period for all multiple-award contracts because other agencies also are awarding longer contracts, Williams said.

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