Size Determination Measurement Period Changed from Three Years to Five YearsOn December 17, 2018, President Trump signed into law a bill that amends the Small Business Act to require that the size of a federal contractor be measured by an average of five years, rather than three years, of revenue for the purpose of determining small business program eligibility.

The bill—known as the Small Business Runway Extension Act of 2018 (H.R. 6330)—“is designed to reduce the impact of rapid-growth years which result in spikes in revenue that may prematurely eject a small business out of their size standard.” The bill also aims to “allow small businesses at every level more time to grow and develop their competitiveness and infrastructure, before entering the open marketplace.”

The bill is effective immediately, and the Small Business Administration presumably will update its regulations accordingly in the near future.

If you have any questions about how the Small Business Runway Extension Act of 2018 may impact your company, please do not hesitate to contact Aron Beezley.