Senate wants annual small-business certifications

Companies that get federal government work under small-business programs would need to annually recertify that they still qualify for them, according to legislation introduced in the Senate Aug. 2.

The Small Business Reauthorization and Improvements Act of 2006 would amend the Small Business Act to require every business that qualifies as a small business to certify its size and small-business status each year.

Recent studies have angered small-business advocates because they show that larger companies are getting contracts intended for small firms, sometimes because the companies outgrow the small-business definitions during the contract period. In other cases, a larger firm acquires a small business and gets the benefits of the contracts the small firm held.

The authorization bill also allows the Small Business Administration to establish two or more tiers within an overall small-business size standard cap. The measure is similar to one the Commerce Department used for the Commerce Information Technology Solutions contract, which allowed the smallest of the small businesses to compete for set-aside task orders without going head-to-head with larger small firms.