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Expert Analysis

SBA's Presumed Loss Safe Harbor Remains Insufficient

Law360, New York (July 11, 2014, 6:25 PM EDT) -- In 2010, Congress significantly increased the risk of owning, teaming with, or acquiring a small business government contractor through the so-called "presumed loss rule." The rule establishes an irrefutable presumption that when a small business misrepresents its size to gain a benefit, such as a contract award or even extra credit under an evaluation factor, the damage to the government is the entire value of that contract. This harsh rule, which could also support treble damages under the False Claims Act, led to a vocal industry response and the creation of a safe harbor for Small Business Administration "advisory opinions" in the FY 2013 National Defense Authorization Act ("NDAA")....

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