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Subcommittee Examines Small Business Runway Extension Act

 Washington, D.C.— Today, the Committee on Small Business Subcommittee on Contracting and Infrastructure met to ensure that the Small Business Runway Extension Act is being implemented in accordance with Congressional intent. Signed into law in December of 2018, the Act aims to give small firms additional time as a designated small business, so they can better compete for federal contracts. 
“In Maine and across the country, small businesses are economic engines that drive growth and jobs in the American economy and anchor our rural communities,” said Subcommittee Chairman Jared Golden (D-ME). “This Subcommittee will work to level the playing field so small firms have the tools they need to compete for federal contracts and create new jobs.”
The Small Business Runway Extension Act arose to mitigate growing concerns from small businesses that may receive a large contract, therefore gathering an unusual spike in revenue and potentially losing designation as a small firm, all before being mature enough as a business to compete against larger companies. Before the Act, the Small Business Administration (SBA) utilized a 3-year average of annual gross receipts of a company to determine if the company is considered small. The Act extends the 3-year average to 5 years, providing a cushion for companies to take on additional revenue by distributing the difference over a longer period.
However, interpretation and implementation of the law has been contested. Today’s hearing was an opportunity for the Subcommittee to consider the controversies surrounding the implementation of the Act, discuss potential solutions to combat these challenges, and examine any potential additional steps that may be necessary to ensure that the law follows Congressional intent. 
“The Small Business Runway Extension Act will help small businesses grow and create jobs. It's commonsense legislation that ensures one or two particularly good years or contracts don’t bump a firm out of the small business category before its ready to compete with larger firms,” said Chairman Golden. “Now, this subcommittee is working to implement the law as Congress intended and ensure small businesses have better opportunities to win federal contracts.”
The following witnesses testified at today’s hearing: 
• Mr. David Black, Partner, Holland & Knight in Tysons, VA
• Ms. Megan C. Connor, Partner, PilieroMazza PLLC, Washington, DC
• Mr. Brian Morales, President, ProCal Lighting, Vista, CA *Testifying on behalf of the National Electrical Contractors Association
• Ms. Erin Allen, President, Contemporaries, Inc., Silver Spring, MD *Testifying in her role as a board member on behalf of the Montgomery County Chamber of Commerce

For witness testimony and the hearing memo, click here.

For video of the hearing, click here.


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