Small Business Issues

Expert Attorneys in Small Business Issues for Government Contracts Law

Small Business Issues

Our government contract attorneys are seasoned professionals in prosecuting and defending bid protests and legal disputes before the Government Accountability Office (GAO), the U.S. Court of Federal Claims, and other federal contract tribunals.

Whether representing a successful awardee or disappointed offeror, we help clients navigate the bid protest process to successfully defend their own contract awards or to vindicate their rights to full and fair competition as a protester.
Centre has represented clients in countless bid protests that yielded successful results without a written decision, including matters in which the procuring agency voluntarily adopted early corrective action or the protest resulted in early outcome prediction.

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Small Business Subcontracting FAQs

What is a size protest?

Size protests are actions brought by interested parties to challenges the size status of a set-aside contract awardee. The SBA Area Office to which the protest is assigned takes evidence and issues a “Size Determination.” From this determination, the losing party can appeal to SBA’s Office of Hearings and Appeals. While legal action is often the last resort, the increased frequency and complexity of small business set-asides has led size protests to become a weapon of choice for many contractors.

What is affiliation?

Under the SBA rules affiliation exists when an entity controls or has the power to control the small business. Control may arise through ownership, management or other relationships between the parties. When such control exists, SBA will view the entities as “affiliated”. Depending on the NAICS code being used, SBA will aggregate either the two businesses’ receipts or their number of employees; if those aggregate values exceed the relevant size standard, each affiliated firm becomes ineligible for a small business set-aside prime contract.

Why are Affiliation Rules Important?

If a competitor files a “size protest” again based on your alleged affiliation with another business, you may be found ineligible for contract award. Alarmingly, a finding of affiliation may disqualify you from the award of future set-aside contracts as well.

Can I protest another company’s set-aside contract award because they are affiliated with another company?

Yes, if you are an interested party and have reason to believe that the awardee is affiliated in a way that makes it large, you can protest the awardee’s size status before SBA. But don’t delay; there are strict time requirements to follow or else your protest will be dismissed.

What is the 8(a) Mentor-Protégé Program?

SBA’s 8(a) mentor/protégé program allows newly formed small businesses to team with successful large companies under a structured program that provides small businesses with the knowledge and resources necessary to succeed in their chosen industry. The key benefit for small protégés is teaming with large mentors to bid on contracts with broader scopes of work or stringent past performance requirements for which the protégé alone would not be qualified. The principal benefit for large mentors is access to set-aside contracts for which they would otherwise be too large. When a mentor teams with its protégé, under certain circumstances, SBA allows the two firms to work together without triggering SBA affiliation rules. Centre Law & Consulting’s team is keenly aware of the responsibilities of both the mentor and protégé under these arrangements and has assisted both small companies and large companies take advantage of their benefits.

What is the Non-Manufacturer Rule?

The non-manufacturer rule applies only to small business prime contractors who offer to the government products manufactured by other entities. The complete rule has four requirements for these prime contractors — the “non-manufacturer”:

Does not exceed 500 employees
Is primarily engaged in the retail or wholesale trade and normally sells the type of item being supplied
Takes ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice
Will supply the end item of a small business manufacturer, processor or produced made in the United States, or obtains a waiver of such requirement pursuant to paragraph (b)(5) of this section

The non-manufacturer rule is intended to prevent small business prime contractors from being mere “pass-throughs” in the supply chain. By far the most common pitfall is the fourth (iv) requirement — that the small business prime must provide US-made goods from a small business manufacturer or else obtain a waiver of this requirement. Waivers are granted by SBA when there are no small business manufacturers of the product being supplied, but it should be kept in mind that even where a non-manufacturer rule waiver is obtained, it does not waive the other three requirements of the rule, nor any applicable domestic preference rules such as the Buy American Act.

Complete Table of Changes which will go into effect most likely Oct 1, 2022.

“SBA is increasing the size standards for 46 industries in those sectors, including 27 industries in NAICS Sector 54 (Professional, Scientific and Technical Services), two industries in Sector 55 (Management of Companies and Enterprises), and 17 industries in Sector 56 (Administrative and Support and Waste Management and Remediation Services).”

No action is taken at this time. However, if your NAICs code increases you should start to plan accordingly especially if you size down which means you become small again specifically those under 541611.

Within these categories, here are a few common NAICS codes that will see increases: (remember these numbers are based upon a five year average for revenue):

NAICS 541310 (Architectural Services) from $8 million to $11 million
NAICS 541330 (Engineering Services) from $16.5 million to $22.5 million
NAICS 541611 (Administrative Management and General Management Consulting Services) from $16.5 million to $21.5
NAICS 541990 (All Other Professional, Scientific and Technical Services) from $16.5 million to $17 million

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NAICS Codes	NAICS U.S. Industry Title	Size Standards in Millions of Dollars
541110	Offices of Lawyers	13.5
541191	Title Abstract & Settlement Offices	17.0
541199	All Other Legal Services	18.0
541211	Offices of Certified Public Accountants	23.5
541214	Payroll Services	34.5
541310	Architectural Services	11.0
541330	Engineering Services	22.5
5411330 (Exception 1)	Military an Aerospace Equipment and Military Weapons	41.50
5411330 (Exception 2)	Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992	41.50
5411330 (Exception 3)	Marine Engineering & Naval Architecture	41.50
541350	Building Inspection Services	10.0
541360	Geophysical Surveying and Mapping Services	22.5
541420	Industrial Design Services	15.0
541490	Other Specialized Design Services	12.0
541513	Computer Facilities Management	32.5
541611	Administrative Management and General Management Consulting Services	21.5
541612	Human Resource Consulting Services	25.5
541614	Process, Physical Distribution and Logistics Consulting Services	17.5
541720	Research and Development in the Social Sciences and Humanities	24.5
541810	Advertising Agencies	22.5
541830	Media Buying Agencies	28.5
541840	Media Representatives	18.5
541850	Outdoor Advertising	30.5
541860	Direct Mail Advertising	19.5
541870	Advertising Material Distribution	25.0
541910	Marketing Research and Public Opinion Polling	20.0
541921	Photography Studios	14.0
541930	Translation and Interpretation Services	20.0
541940	Veterinary Services	9.0
541990	All Other Professional, Scientific and Tech Services	17.0
551111	Offices of Bank Holding Companies	34.0
551112	Offices of Other Holding Companies	40.0
561110	Office Administration Services	11.0
561330	Professional Employer Organizations	36.5
561422	Telemarketing Bureaus and Contact Centers	22.5
561439	Other Business Service Centers (including copy shops)	23.5
561440	Collection Agencies	17.0
561450	Credit Bureaus	36.0
561499	All Other Business Support Services	19.0
561599	All Other Travel Arrangement Services	28.5
561612	Security Guards and Patrol Services	25.5
561613	Armored Car Services	38.0
561710	Exterminating and Pest Control Services	15.5
561730	Landscaping Services	8.5
561740	Carpet and Upholstery Cleaning Services	7.5
561910	Packaging and Labeling Services	17.0
561920	Convention and Tradeshow Organizers	17.5
561990	All Other Support Services	14.5
562998	All Other Miscellaneous Waste Management Service	14.5

Centre's Small Business Subcontracting Experts

Managing Partner

Barbara Kinosky

Barbara Kinosky, Esq., is the Managing Partner of Centre Law and a highly experienced professional with over thirty years of representing clients in various federal government contracting issues, disputes, and protests. Barbara has been recognized for her outstanding contributions to federal government contracting and was voted into the American Bar Foundation as a Fellow, an honor limited to the top 1% of licensed attorneys.Barbara Kinosky is a nationally renowned speaker, author, expert witness, and AAA Arbitrator specializing in complex prime...

Partner

Alan Chvotkin

Alan is a partner in the Washington, D.C. area law firm Centre Law where he specializes in federal government contracts law and its policies and practices, including counseling companies on a wide range of matters ranging from contract formation and performance through disputes and claims.Prior to private practice, Alan was for 19 years the executive vice president and counsel of the Professional Services Council (PSC), the principal national trade association of the government technology and professional services industry, where he...

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