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Biden’s Small Biz Contract Plan in Need of Definitive Regs


 A White House plan to include more small businesses in multiple-award government contracts could backfire if regulations to implement the plan don't define terms such as when companies can be added to the contracts or given preference for specific tasks under the contracts. 


Problems arising from those ambiguities could be more than abstract concerns, as although the memo won't be binding until codified through rules that the OMB said the Federal Acquisition Regulatory Council and the Small Business Administration are in the process of developing, no legal barrier stands in the way of agencies voluntarily implementing the OMB's suggestions in the meantime. The OMB itself said it "encourages early agency adoption of these management steps."

As the FAR Council and SBA codify the memo, contractors and their attorneys will be watching closely to see whether and how those agencies address those uncertainties, hopefully with a "robust and extended comment period" once those proposed rules come out, said Blank Rome LLP partner Elizabeth Jochum.

"Small business regulations [are] unwieldy as-is and there's certainly the potential in doing rulemaking to effectuate these policy goals that you create a lot of confusion, you create conflict with other portions of the regulation, or you have adverse impacts stemming from the regulations that weren't intended by the administration or the rulemakers," Jochum said.

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"Biden’s Small Biz Contract Plan in Need of Definitive Regs," by Daniel Wilson was published in Law360 on February 2, 2024.