1. TGIC Exchange Brief Small Business Regulatory Update November 10, Terence Murphy / (757) /

2. Important Note
The contents of this presentation are intended for general information only and should not be construed or relied upon as legal advice nor as a legal opinion on any specific facts or circumstances. If you need legal advice concerning your specific circumstances, please consider contacting Kaufman & Canoles, P.C.

3. SBA Final Rule Implementing 2013 NDAA
81 Fed. Reg. 34,243 (May 31, 2016) (effective June 30, 2016)
Limitations on subcontracting
Similarly situated entities

4. SBA Final Rule Implementing 2013 NDAA
Limitations on subcontracting
Subcontracting limitations now based on total contract value
Percentage of prime expenditure on subs based on cost of contracts (excluding cost of materials when applicable) cannot exceed:
50% for services and supply
85% for general construction
75% for specialty trade

5. SBA Final Rule Implementing 2013 NDAA
Similarly Situated Entities
Work subcontracted to “similarly situated entities” counts as work done by the small business prime contractor
“Similarly Situated Entity” defined as a “small business concern subcontractor that is a participant of the same SBA program that qualified the prime contractor as an eligible offeror and awardee of the contract.”
Must also qualify as “small” based on the NAICS code prime contractor assigned to the subcontract

6. SBA Final Rule Implementing 2013 NDAA
Penalty for violating the new rule
Greater of $500,000 or the dollar amount spent in excess of the limitations
Possible suspension and debarment
Practical Note: SBA regulation only; not yet in FAR
Ask CO question in proposal process whether recognition of this change