With the January 17, 2026, recertification rule changes approaching, small businesses relying on federal contracts must take proactive steps to adjust their strategies. Here are key adjustments to consider if you’re considering a merger, acquisition or simply ensuring long-term eligibility.
1. Rethink Your M&A Strategy
Under the new rules, timing is critical if your business is considering selling, merging or acquiring another company.
Short-Term Strategy: Complete Transactions Before January 2026
- Why? If a small business is acquired before the deadline, it can still compete for small business set-aside orders under an existing multiple award contract (MAC).
- Action Step: If you’re contemplating a sale, accelerate discussions and due diligence to finalize transactions before the rule goes into effect.
Long-Term Strategy: Consider Small-To-Small Acquisitions
- Why? If a small business acquires another small business, it can continue competing for small business orders on existing MACs, even if the combined entity exceeds the size standard.
- Action Step: To maintain eligibility, look for strategic partnerships with other small businesses rather than large firms.
2. Strengthen Direct Contracting Opportunities
Rather than relying heavily on small business set-aside MACs, consider diversifying your contracting portfolio.
Shift Toward Full & Open Contracts
- Why? If your company is approaching the small business size limit, start preparing for full and open competition contracts rather than relying solely on set-aside opportunities.
- Action Step: Focus on building past performance and relationships with federal agencies to remain competitive in unrestricted procurements.
Explore Teaming Agreements & Joint Ventures
- Why? Forming joint ventures under the SBA’s All Small Mentor-Protégé Program (ASMPP) can help small businesses compete for larger contracts while maintaining eligibility.
- Action Step: Identify potential mentors or teaming partners that align with your business strategy.
3. Evaluate Existing Multiple Award Contracts (MACs)
Assess your long-term position if your business is currently on a set-aside MAC.
Review Remaining Contract Value & Option Periods
- Why? If your business expects to outgrow its size standard or be acquired, consider how much revenue remains on current MACs before the recertification rules take effect.
- Action Step: Prioritize bidding on high-value task orders before the new rules impact eligibility.
Consider New MAC Opportunities Before 2026
- Why? If a small business secures a new MAC contract before the rule change, it may still benefit from current eligibility rules.
- Action Step: Monitor upcoming MAC solicitations and aggressively pursue new awards before the deadline.
4. Adjust Business Valuation & Exit Planning
For business owners planning an exit strategy, the new rule impacts how potential buyers evaluate your company.
Understand the Impact on Business Valuation
- Before 2026: A small business that holds set-aside MACs is more valuable to buyers since it can still win small business orders.
- After 2026: If the business is no longer eligible for set-aside orders post-acquisition, it may be less attractive to large buyers.
Key Takeaways for Exit Planning
- Maximize contract wins now to strengthen your valuation before an acquisition.
- Explore buyers within the small business community to maintain contract eligibility.
- Consult M&A advisors who specialize in government contracting to navigate the transition.
5. Stay Ahead With Compliance & SBA Guidance
To ensure smooth adaptation to these changes, businesses should maintain strict compliance with SBA size standards and monitor policy updates.
Regularly Monitor Your Size Status
- Keep track of annual revenue & employee count to anticipate SBA recertification risks.
- Use SBA’s Size Standards Tool to confirm ongoing eligibility.
Engage With Legal & Contracting Professionals
- Consult government contracting attorneys to understand the legal implications of these rule changes.
- Work with SBA representatives or Procurement Technical Assistance Centers (PTACs) to clarify how these rules apply to your contracts.
Key Action Steps
- If Selling or Merging: Close transactions before January 17, 2026, to retain set-aside contract eligibility.
- If Staying Independent: Diversify your contract strategy to reduce reliance on small business set-aside MACs.
- If Considering Acquisitions: Target small-to-small acquisitions to maintain eligibility under existing contracts.
- If Planning for Growth: Invest in teaming agreements, joint ventures and direct contracts to prepare for full and open competition.
Final Thoughts: Preparing for 2026 and Beyond
The SBA’s new recertification rules mark a major shift in federal contracting. While the changes limit some opportunities for small businesses post-acquisition, they also reinforce the importance of strategic growth and compliance. To navigate these changes effectively, Cherry Bekaert’s Government Contracting advisors are available to discuss your situation with you.
