2025 SBA Recertification Rule: What M&A Buyers and Sellers Need to Know
On January 16, 2025, the Small Business Administration’s (SBA) final recertification rule took effect, transforming how small-business status is handled during mergers, acquisitions, and other changes in control. For companies that hold federal contracts or compete for SBA set-aside contracts, these changes have far-reaching implications for current work and future opportunities
Key Provisions
Mandatory recertification after change in control. Whenever a company holding small-business or set-aside contracts is sold, merges, or undergoes a novation, it must recertify its size and program status within 30 days.
Qualifying vs. disqualifying recertification.
A qualifying recertification confirms you’re still small or eligible for your program and lets you keep competing for set-aside orders for up to five years (unless a later disqualifying event occurs).
A disqualifying recertification tells the government you’re no longer small or eligible. That can immediately limit access to new set-aside awards.
Multiple Award Contracts (MACs) transition window. Until January 17, 2026, if you experience a disqualifying recertification you can still receive orders and options under your existing small-business MAC — agencies just can’t count them toward small-business goals. After January 17, 2026, those orders and options will stop unless you’re still eligible.
Long-term contracts. Contracts over five years still require recertification before the fifth year and again at each option period.
Size protests. Other contract holders now have the right to challenge a competitor’s size status at recertification under MACs.
Special rules for FSS and BPAs. The previous exception for Federal Supply Schedule (FSS) orders and Blanket Purchase Agreements (BPAs) is gone — disqualifying recertification now makes you ineligible for set-aside orders under those vehicles.
Why It Matters for Business Owners
This rule changes how small-business status interacts with corporate transactions. It can affect valuation, deal timing, and your pipeline of government work. The one-year transition for MACs gives a planning window, but after January 17, 2026, losing small-business status will have immediate impact. Even deals between two small businesses can have restrictions depending on contract terms.
For owners considering a sale or acquisition, this means you need to factor SBA recertification into due diligence. Contracts that depend on small-business status may be worth less if eligibility changes overnight.
We’re Here to Help
We monitor SBA regulations closely. If you’re buying, selling, or restructuring a government contractor, our team can explain how the new recertification rules apply to your contracts and help you plan for a smooth transition.