Friday, November 11, 2011

Some Relief for Prime Contractors

FAR (Federal Acquisition Regulations) has been amended effective November 2nd to allow subcontractors to "self-represent" their small disadvantaged business (SDB) status to prime contractors in good faith when seeking Federal subcontracting opportunities.

Previously under the FAR, Federal prime contractors were required to confirm that subcontractors representing themselves as small disadvantaged businesses were certified by the SBA (Small Business Administration) as SDB firms.

There is one caveat. The precise wording in FAR 52.219-25 allows prime contractors to accept the subcontractor's written self-representation unless the prime contractor has reason to question the self-representation.

There are a number of reviews going on right now addressing the perceived abuse by contractors (and subcontractors) that misrepresent their small business size status in order to win contracts. We recommend, notwithstanding this easing of the burden of verifying small business status, that contractors make more than a token effort to ensure the veracity of subcontractor assertions and representations.

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