# 13 C.F.R. § 121.108 (2026): What are the penalties for misrepresentation of size status? > Federal · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_108 ## Section - **Citation:** 13 C.F.R. § 121.108 (2026) - **Heading:** What are the penalties for misrepresentation of size status? - **Jurisdiction:** Federal - **Kind:** Regulations - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** Title 13 CFR: Business Credit and Assistance / Chapter I: SMALL BUSINESS ADMINISTRATION / Part 121: SMALL BUSINESS SIZE REGULATIONS / Subpart A: Size Eligibility Provisions and Standards / § 121.108: § 121.108 What are the penalties for misrepresentation of size status? ## Text (a) Presumption of Loss Based on the Total Amount Expended. In every contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant which is set aside, reserved, or otherwise classified as intended for award to small business concerns, there shall be a presumption of loss to the United States based on the total amount expended on the contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant whenever it is established that a business concern other than a small business concern willfully sought and received the award by misrepresentation. (b) Deemed Certifications. The following actions shall be deemed affirmative, willful and intentional certifications of small business size and status: (1) Submission of a bid, proposal, application or offer for a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement reserved, set aside, or otherwise classified as intended for award to small business concerns. (2) Submission of a bid, proposal, application or offer for a Federal grant, contract, subcontract, cooperative agreement or cooperative research and development agreement which in any way encourages a Federal agency to classify the bid or proposal, if awarded, as an award to a small business concern. (3) Registration on any Federal electronic database for the purpose of being considered for award of a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement, as a small business concern. (c) Signature Requirement. Each offer, proposal, bid, or application for a Federal contract, subcontract, or grant shall contain a certification concerning the small business size and status of a business concern seeking the Federal contract, subcontract or grant. An authorized official must sign the certification on the same page containing the size status claimed by the concern. usiness concern. (c) Signature Requirement. Each offer, proposal, bid, or application for a Federal contract, subcontract, or grant shall contain a certification concerning the small business size and status of a business concern seeking the Federal contract, subcontract or grant. An authorized official must sign the certification on the same page containing the size status claimed by the concern. (d) Limitation of Liability. Paragraphs (a) through (c) of this section may be determined not to apply in the case of unintentional errors, technical malfunctions, and other similar situations that demonstrate that a misrepresentation of size was not affirmative, intentional, willful or actionable under the False Claims Act, 31 U.S.C. §§ 3729, et seq. A prime contractor acting in good faith should not be held liable for misrepresentations made by its subcontractors regarding the subcontractors' size. Relevant factors to consider in making this determination may include the firm's internal management procedures governing size representation or certification, the clarity or ambiguity of the representation or certification requirement, and the efforts made to correct an incorrect or invalid representation or certification in a timely manner. An individual or firm may not be held liable where government personnel have erroneously identified a concern as small without any representation or certification having been made by the concern and where such identification is made without the knowledge of the individual or firm. quirement, and the efforts made to correct an incorrect or invalid representation or certification in a timely manner. An individual or firm may not be held liable where government personnel have erroneously identified a concern as small without any representation or certification having been made by the concern and where such identification is made without the knowledge of the individual or firm. (e) Penalties for Misrepresentation. (1) Suspension or debarment. The SBA suspension and debarment official or the agency suspension and debarment official may suspend or debar a person or concern for misrepresenting a firm's size status pursuant to the procedures set forth in 48 CFR subpart 9.4. (2) Civil Penalties. Persons or concerns are subject to severe penalties under the False Claims Act, 31 U.S.C. 3729-3733, the Program Fraud Civil Remedies Act, 31 U.S.C. 3801-3812 and any other applicable laws or regulations, including 13 CFR part 142. (3) Criminal Penalties. Persons or concerns are subject to severe criminal penalties for knowingly misrepresenting the small business size status of a concern in connection with procurement programs pursuant to section 16(d) of the Small Business Act, 15 U.S.C. 645(d), as amended, 18 U.S.C. 1001, 18 U.S.C. 287, and any other applicable laws. Persons or concerns are subject to criminal penalties for knowingly making false statements or misrepresentations to SBA for the purpose of influencing any actions of SBA pursuant to section 16(a) of the Small Business Act, 15 U.S.C. 645(a), as amended, including failure to correct “continuing representations” that are no longer true. (4) Limitation on Liability. An individual or business concern will not be subject to the penalties imposed under 15 U.S.C. 645(a) where it acted in good faith reliance on a small business status advisory opinion accepted by SBA under § 121.109. [78 FR 38816, June 28, 2013, as amended at 80 FR 7536, Feb. 11, 2015; 81 FR 31491, May 19, 2016] ## Nearby sections - [13 C.F.R. § 121.101 (2026) § 121.101 What are SBA size standards?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_101.md) - [13 C.F.R. § 121.102 (2026) § 121.102 How does SBA establish size standards?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_102.md) - [13 C.F.R. § 121.103 (2026) § 121.103 How does SBA determine affiliation?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_103.md) - [13 C.F.R. § 121.104 (2026) § 121.104 How does SBA calculate annual receipts?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_104.md) - [13 C.F.R. § 121.105 (2026) § 121.105 How does SBA define “business concern or concern”?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_105.md) - [13 C.F.R. § 121.106 (2026) § 121.106 How does SBA calculate number of employees?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_106.md) - [13 C.F.R. § 121.107 (2026) § 121.107 How does SBA determine a concern's “primary industry”?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_107.md) - [13 C.F.R. § 121.108 (2026) § 121.108 What are the penalties for misrepresentation of size status?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_108.md) - [13 C.F.R. § 121.109 (2026) § 121.109 What is a small business status advisory opinion?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_109.md) - [13 C.F.R. § 121.110 (2026) § 121.110 What must a concern do in order to be identified as a small business concern in any Federal procurement databases?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_110.md) - [13 C.F.R. § 121.201 (2026) § 121.201 What size standards has SBA identified by North American Industry Classification System codes?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_201.md) - [13 C.F.R. § 121.301 (2026) § 121.301 What size standards and affiliation principles are applicable to financial assistance programs?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_301.md) - [13 C.F.R. § 121.302 (2026) § 121.302 When does SBA determine the size status of an applicant?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_302.md) - [13 C.F.R. § 121.303 (2026) § 121.303 What size procedures are used by SBA before it makes a formal size determination?](https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_303.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/CFR_T13_P121_S121_108. 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