SBA to implement new rules on SDBs

News - Published Jun 08, 2020

For some time now, the position of Small Disadvantaged Businesses (SDBs) in federal contracting has been somewhat tenuous. While all federal agencies have been subject to goals of meeting a 5% participation rate of SDBs in their contracting, many other subsidiary programs have been discontinued or are absent. There is no federal program for SDB primes, no set-aside program for SDBs, no SDB certification administered by the U.S. Small Business Administration (SBA), and no statutory authority for SDB price evaluation adjustment. However, the SBA is set to issue new rules to assist SDBs in federal contracting.

Under new rules proposed by the SBA which will be enacted on August 6th, 2020, unless "significant adverse comment" is received by July 7th, 2020, SDBs will be able to self-certify as such as long as they qualify as "small" under a contract's assigned NAICS code, and if they are "owned and controlled by one or more socially and economically disadvantaged individuals". The criteria for social and economic disadvantagement will be those as established under the SBA's 8(a) program eligibility requirements. This will ensure that there is a valid pathway for firms to be considered SDBs for the purposes of federal contracting, in the absence of prior programs which allowed for SDB certification.

To read the related rule as published in the Federal Register, visit https://www.govinfo.gov/content/pkg/FR-2020-05-08/pdf/2020-08619.pdf.