Damien Specht, a partner at the Morrison Foerster law firm, joined me yesterday on GovCon Intelligence, just a few days after the Senate passed a bill to reauthorize the SBIR program. We got into the details of the reauthorization bill. Then we talked about his specialty—mergers and acquisitions of government contractors. After working on hundreds of M&A deals, Damien shared his tips for companies in dealing with the recent small-business M&A cliff, plus what small businesses need to take care of before selling.And, with SBA’s most recent announcement on an additional 620 proposed terminations, we discussed the 8(a) audits. How do SBA’s actions affect firms on OASIS+ and the GSA Schedule?

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Sam Le interviews Damien Specht, a Morrison & Foerster partner, about Senate-passed SBIR reauthorization after the program’s first lapse, including debates over capping repeat Phase I/II winners, adding larger awards, and emphasizing commercialization while keeping SBIR focused on early-stage R&D. Damien discusses how small business legislation moves slowly on Capitol Hill compared with regulatory change, and how private equity, minority investment, and strategic M&A shape the govcon market.

He analyzes SBA’s January 16 recertification “cliff,” uncertainties for IDIQ reserves, GSA Schedule and novation, and suggests mentor-protégé JVs and minority investments as post-cliff strategies. The conversation also covers SBA’s 8(a) suspension waves and limitation-on-subcontracting enforcement, alleging AI-driven screening with errors and due-process concerns, conflicts between SBA rules and the FAR overhaul, and common diligence pitfalls like affiliation, delayed SAM updates, ownership structure noncompliance, and JV mistakes.

00:00 Show Welcome

00:41 SBIR Reauthorization Update

01:51 Caps Awards Commercialization

04:06 Program Purpose And Outreach

06:18 Hill Experience And Partisanship

09:23 Investment And Affiliation Rules

11:42 Recertification Cliff Explained

19:32 Market Outlook And Deal Types

21:51 Post Cliff Strategies

24:28 Minority Investment Rule Changes

25:09 Venture Capital Affiliation Trap

27:10 8a Suspensions and AI Audits

31:14 Subcontracting Limits Enforcement

32:56 FAR Overhaul vs SBA Rules

35:51 Building People GAO Case

38:27 Wish List for New SBA Rules

39:32 HUBZone 35 Percent Challenge

41:06 M&A Valuation Near Size Limit

43:11 Due Diligence Compliance Pitfalls

46:40 Joint Venture Rules and Wrap Up

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