Large prime contractors operating under individual subcontracting plans would receive credit for small businesses performing at any subcontracting tier, according to a proposed rule issued yesterday by the SBA.
The proposed rule also requires large primes to assign a NAICS code and size standard to “solicitations” for subcontracts–a notion that may come as a surprise to prime contractors, many of whom do not typically issue formal subcontract solicitations.
Small Business Development Centers and Procurement Technical Assistance Centers would be permitted to issue advisory small business size status opinions under a proposed rule published last week by the SBA.
The proposed rule, which implements a section of the 2013 National Defense Advisory Act, establishes a “safe harbor” from fraudulent misrepresentation penalties for a small business that obtains an advisory size opinion from a SBDC or PTAC. But the proposed rule acknowledges that SBDCs and PTACs are not required to provide such advisory opinions–and that new funding will not be awarded for this purpose.
A firm’s small business size status for federal procurements is measured by the firm’s revenues, not by its profits.
As the SBA Office of Hearings and Appeals explained in a recent size determination, measuring small business status by reference to profits would allow some very large companies to qualify as “small.”
The SBA has issued a final rule eliminating the unusual megawatt hours size standard applicable to six NAICS codes in NAICS Sector 22. The SBA’s revision replaces the megawatt hours size standard with a 500-employee size standard, and eliminates the requirement that a firm must be “primarily engaged” in the generation, transmission or distribution of energy for sale.
Although the megawatt hours size standard may have made sense when it was adopted in the 1970s, the SBA appropriately recognized that the market has changed. Perhaps most important, the “primarily engaged” component of the megawatt hours size standard unfairly excluded many companies from competing as “small” in NAICS Sector 22.
The VA CVE has instructed verified SDVOSBs to remove so-called “large NAICS codes” from their VetBiz Vendor Information Pages profiles within 30 days–or else.
According to a recent email from the VA CVE (which was kindly shared with me), SDVOSBs must remove any NAICS codes for which they do not qualify as a small business. Failing to remove these “large NAICS codes” may result in potentially harsh penalties, including debarment.
The SBA misevaluated a joint venture by basing its ineligibility decision on the joint venture’s revenues, rather than determining whether each joint venturer, individually, qualified as a small business, according to a recent decision of the SBA’s Office of Hearings and Appeals.
SBA OHA’s decision highlights what I like to call the “individual size treatment rule,” a special regulation requiring the SBA to deem a joint venture “small” under certain circumstances, even when the combined sizes of the joint venture’s members exceed the applicable size standard.
When designating the NAICS code for a solicitation, the procuring agency should not consider which NAICS code will help increase competition and decrease the risks of unsuccessful performance.
According to a recent decision of the SBA Office of Hearings and Appeals, these factors should play no bearing on an agency’s NAICS code designation. Instead, in most cases, the agency must select the NAICS code that best describes the principal purpose of the product or service being acquired.