National Legal Scholar Slams SBA Anti-Small Business Policies
Professor Tiefer Joins ASBL To Defeat SBA Anti-Small Business Policy
By Lloyd Chapman
American Small Business League
November 6, 2014
PETALUMA, Calif., Nov. 6, 2014/PRNewswire-USNewswire/ -- Professor Charles Tiefer,one of America's leading experts on federal contracting law has weighed inagainst a new round of proposed policies by the Small Business Administration(SBA) many people are describing as anti-small business.
Professor Tiefer has joined forces with American Small BusinessLeague (ASBL) President, Lloyd Chapman, in an effort to defeat the new SBA policy that could be devastating to thousands ofsmall businesses.
In one example, under the current policy any firm classifiedas an Information Technology Value Added Reseller (ITVAR) with less than 150 employees is considered a smallbusiness. If the SBA has their way, a small business with less than 10employees could be reclassified as a large business if their annual salesexceeded $27.5 million. In the federal market, $27.5 million could be a single order placed by a federalagency.
At the same time, thousands of legitimate small businesses wouldbe reclassified as large businesses over night. The SBA wouldcontinue to report billions of dollars in federal contracts to dozens ofFortune 500 firms and their subsidiaries as small business contracts as they havefor the last 15 years.
"This proposed SBA change breaks the law by violatingCongress's statutory intent in the Small Business Jobs Act of 2010; clasheswith the SBA record of retaining all other SBA sub-industries; and, withoutjustification, repeals the SBA's 2003 action recognizing thissub-industry," Professor Tiefer stated in his comment opposing the new SBAproposed policy. "Congress enacted the Small Business Jobs Act of 2010 Congress intended to increase SBA size standards, the opposite of what thisrule does, which is to 'eliminate' the separate, higher ceiling of 150employees and replace it with the lower, $27.5 millionrevenue ceiling."
"An employee size standard is considered a better measureof the size of ITVARs operation than receipts since a substantial proportion oftheir receipts merely reflect the dollar value of equipment and softwaresold," the SBA stated in a final rule in December 2003, when the SBA originallyestablished the 150 employee ceiling.
Now in this new proposed policy, the SBA states that the reasonsfor removing ITVARs from NAICS code 541519 are because of"inconsistencies, confusion, and misuse." Professor Tiefer refers tothis ruling and ends his comment with, "The arguments the SBA puts forthsimply do not have any traction for questioning or changing the 2003establishment of the category. It should continue, not eliminate,IT-VAR."
The last day to submit public comments to this proposed rule is Monday, Nov. 10.
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