In November 2006, the Small Business Administration (SBA)
announced a rule that will require small businesses to recertify
their "small" status. (The definition of small business varies
among industries. For roofing contracting companies, a business is
considered small if it has less than $13 million in annual
receipts. SBA bases its size requirements on the North American
Industry Classification System.)
The changes in procedure, which take effect June 30, will
require small businesses to recertify their small-business status
if they have long-term contracts with federal government agencies
seeking a contract option, are purchased by or merged with another
business, or at the end of the first five years of a contract.
The changes are meant to provide a more accurate classification
of small businesses. According to SBA, size status used to be
determined at the time a federal contract was signed, and the
status remained for the life of the contract. But because federal
contracts often can extend to 20 years, previously small companies
were growing considerably during that time frame.
If, after review, a company no longer is considered small per
SBA size standards, the company will lose its designation. However,
it still will be permitted to fulfill the terms of its contract.
Importantly, the agency hiring the company no longer will be able
to count the company toward its...
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