In Federal procurement, small disadvantaged businesses ("SDBs") have two important advantages:

(1) they qualify for an evaluation preference in certain procurements, and (2) prime contractors and subcontractors which file and follow a subcontracting plan must establish and monitor separate subcontracting goals for SDBs.

Recently-issued SBA rules limited participation as (SDBs) to two categories:

(1) participants in the 8(a) program, and

(2) companies which had received a special certification from SBA (or a certifier authorized by SBA).

Because too few SDBs had been certified, SBA has postponed the deadline for this new rule until July 1, 1999. The interim rule pushing back the deadline was issued on December 29, 1998. This rule has two consequences:

(1) SDBs which are not 8(a)s have until July 1 to be certified, and

(2) contractors acting in good faith can rely on an SDB's self-certification until that date.

After July 1, a company seeking SDB status must have an effective and valid certification from SBA (or an SBA-authorized certifier) and meet other requirements. There are also new rules for certifying SDB status for subcontracting. SBA's list of SDBs is available on-line at:

http://www.pro-net.sba.gov/.

Contact our office if you have questions or would like additional information.