While critics often lament how “lame duck” Congresses are typically unable to accomplish anything in the period following an election, the 115th Congress deserves some kudos for being an exception. HR 6330 titled the “Small Business Runway Extension Act of 2018,” was introduced in the House of Representatives in July and was approved by voice vote on September 25th. The identical companion bill, S. 3562, was introduced in the Senate in October and approved by voice vote on December 6th. This newly passed legislation arrived on the President’s desk this week from Capitol Hill.

The legislation is designed to help growing small business government contractors successfully navigate the middle market as they reach the upper limits of their small size standards. Currently, the U.S. Small Business Administration (SBA) formula calculates the size of a small business based on a firm’s average revenue for the past three (3) years. The proposed legislation, if signed into law by the President, would mandate that the SBA modify its size formula to switch to an average of revenue generated by the firm for the past five (5) years. The House Report on HR 6330 indicates that Congress hopes that this modest modification of SBA’s size formula will “reduce the impact of rapid-growth years which result in spikes in revenue that may prematurely eject a small business out of their small size standard.”

This definitely could be a game changer for small business government contractors. However, even if signed into law, implementation of this change would not occur until after the SBA has issued new regulations following the requisite notice and comment period.