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Small Business

SBA Rule Offers More Protection for Subcontractors

The Small Business Administration earlier this month approved a new rule meant to give small-business subcontractors more rights in their dealings with prime contractors.

The rule, which implements part of the Small Business Jobs Act of 2010, requires a prime contractor on designated programs to notify the contracting officer if it opts not to use the small-business contractor presented in its proposal.

Prime contractors must also let the government official know if they reduce their payments to a small-business subcontractor or make late payments.

“It will have a big effect on both large companies and small businesses,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, an industry group.

Before finalizing the policy, the SBA held meetings across the country to gather companies’ feedback, said Ken Dodds, SBA’s director of government contracting.

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