Written by attorney David Allen Rose

H.R. 5297, Small Business Jobs Act of 2010, signed in to Law on September 27, 2010

This Article will only address Subtitle C (Small Business Contracting) of the Act as other sections deal with Lending and Tax Provisions and that is best left to CPAs and Lending Institutions to explain.

  1. Small Business Utilization Plans – The large Prime Contractor is required to give a written explanation to the contracting officer any time they fail to meet their goals specified in their proposal and their submitted small business utilization plan. 15 U.S.C. §(d)(6)(G)(ii).

  2. A new section (r) is added at 15 U.S.C. §644 (Small Business Set Aside Goals) that allows Agency Heads to:

a. Set aside part of or parts of multiple award contracts for small business concerns, including SDVOSBs,HUBZone, SDBs, and WOSBs,

b. Set aside orders placed against multiple award contracts for small businesses, and

c. Reserve one or more awards for small businesses even under full and open competitive procurements.

  1. 15 U.S.C. §637(d) (regarding Small Business Utilization Plans) added a new Section (12) (Payment of Subcontractors) which applies to the Prime Contractors who have included a subcontracting plan in their proposal to the Government agency. Under these circumstances, the failure to pay a subcontractor within 90 days for goods and/or services past due for which the prime contractor has paid by the Federal agency, or if the prime contractor pays the subcontractor a reduced price for goods and/or services upon completion of the work, the prime must provide a written justification to the contracting officer. Failure to do this will result in a negative evaluation factor in the Federal Awardee Performance and Integrity Information System, or any subsequent system.

  2. 15 U.S.C. §632 relating to the definitions to establish a small business and status of a small business have additional definitions at (w) and (x):

a. (w) – if an entity submits a proposal for an award intended as a set aside for small business, there is a presumption of loss to the United States in the event a business concern willfully seeks and receives the award by misrepresenting themselves as small.

b. (x) - Small businesses will now be required to recertify annually in ORCA.

  1. 15 U.S.C. §657a(b)(2)(B) is also amended to place HUBZone companies on a parity with 8a and SDVOSB companies by removing “shall" from the set aside provisions and replacing it with “may" settling the long debated “Mission Critical" case.

  2. Mentor Protégé Program – The SBA Administrator has been given authorization to create programs for HUBZone, Women Owned Small Business, and Service Disabled Small Business Concerns based on the 8a Mentor Protégé Model. 15 U.S.C. §637(a).

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