• SBA Creates "SBTA" Exemption to Affiliation Rules on Bundled Contracts
  • October 23, 2013 | Authors: Edward T. DeLisle; Maria L. Panichelli
  • Law Firm: Cohen Seglias Pallas Greenhall & Furman PC - Philadelphia Office
  • On October 2, 2013, the Small Business Administration (“SBA”) published a final rule implementing changes required by the Small Business Jobs Act of 2010. One of the most interesting changes relates to “bundling,” “affiliation,” and the ability of small businesses to form a new type of teaming arrangement known as a “SBTA.”

    “Bundling” refers to “the consolidation of two or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract.” (13 C.F.R. § 125.2) The problem is, when contracts are “bundled” they often become too big, or too complex, for a small business to handle alone.

    The SBA’s new rule seeks to lessen the negative impact of “bundling” on small business contractors. It permits small businesses to form a new type of arrangement known as a “Small Business Teaming Agreement” (“SBTA”), which is excepted from the normal affiliation rules. Under the revised rule, small businesses may form these SBTAs without undergoing any “affiliation” analysis under 13 C.F.R. § 121. In other words, on bundled contracts small businesses are now free to team with other small businesses without worrying that they could be deemed “affiliates” and risk losing their small business size status. There has been much consternation in the small business world about the concept of bundling. By virtue of this rule, the SBA is attempting to level the playing field by providing small businesses with an additional way to compete.