The Small Business Administration’s (SBA) much anticipated new regulations on small business size and status integrity implement key provisions of the Small Business Jobs Act of 2010 (Jobs Act). Most notably (and as anticipated), the regulations implement the strict liability provisions of the Jobs Act by imposing penalties on businesses that willfully misrepresent their small business size or status in order to obtain contracts, subcontracts, grants, cooperative agreements, or research and development cooperative agreements. The regulations also require signed size and status certifications from company officials as well as annual size and status certifications in the System for Award Management (SAM). As a result of these new regulations, small businesses must be vigilant in accurately calculating and representing their size and status. Otherwise such companies risk ruinous contractual, civil, and criminal penalties that can far exceed even the value of the contract, regardless of whether the government receives the actual product or service sought under the contract.
Penalties for “Willful” Misrepresentation of Small Business Size and Status -
The SBA’s new regulations impose penalties on any business that “willfully” seeks and receives a contract award by misrepresentation of its small business size and status. Three actions are generally deemed to be willful certifications under the regulations...
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