Agency to Require Merged Companies to Prove They're Small
By Rob Kaiser
December 27, 2004
The Small Business Administration has adopted a new policy requiring small firms with federal contracts to recertify themselves as small businesses if they are acquired or merge with another company.
The SBA faced criticism for continuing to count contracts as small-business awards even after a small firm was acquired by a large one.
"This rule is a step in the right direction--in effect reversing egregious government polices that have allowed federal contracts meant for small businesses to go to large, often multinational, companies," Lloyd Chapman, president of the American Small Business League, said in a news release. Chapman's group focuses on small-business contracting issues.
Once a firm is acquired, the business owner now must reaffirm the company's small-business status by submitting a "self-certification statement" to the government. If the merged company doesn't qualify as a small firm, the contract award would no longer be counted toward the government's small-business contracting goal.