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In April 2022, Governor Youngkin signed into law SB550, which prohibits the use of pay-if-paid clauses in public and private construction contracts. This represents a sea change in Virginia construction law where the contract was always king. With the change in law, Virginia joined the minority of states (CA, DE, KS, IL, IN, NC, NY, NV, MN, UT, SC, and WI) that prohibit provisions that shift the risk on owner nonpayment to subcontractors. SB550 went into effect on January 1, 2023, and applies to contracts entered from that date forward.
Just before Christmas, the SBA gave small business government contractors a nice gift. An SBA final rule went into effect on December 19, 2022, adjusting upwards all receipts-based size standards and measures of economic disadvantage. For size standards, this means that for any small business set-aside procurements or any SBA program where a concern must qualify as a small business, the SBA has increased the five (5) year average receipts-measured size standards for all those applicable NAICS codes. (recall, since January 6, 2022, federal contractors are required to use a five (5) year average instead of three (3) years). Note that these increases only apply to receipts-based (i.e., typically construction and services) and not employee-based (i.e., typically manufacturing and supply) NAICS codes. For measuring economic disadvantage, the SBA has increased the thresholds for personal net worth, adjusted gross income, and total asset value. These thresholds apply to the 8(a) Business Development and Economically Disadvantaged Women-Owned Small Business (EDWOSB) Programs as well as firm’s self-certifying at www.SAM.gov as a Small Disadvantaged Business.
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