Eye On Affiliation: The Ostensible Subcontractor Rule

Small business owners must always be mindful of what it means to be "small" in the world of government contracting. After all, losing that small business size status means losing direct access to the lucrative world of set-aside contracts and the SBA's socio-economic programs.

In the past, we've discussed the SBA's rules on affiliation – in short, the rules that determine whether you actually own and control your small business. A finding of affiliation between two companies means that the firms are viewed by the SBA as a single entity for purposes of determining size. Even a very small business can lose its size status if it is affiliated with another company (or multiple companies) that push it over the size threshold.