When it comes to meeting the size standards, the normal rule for a set-aside contract is simple: If you’re small at the time you submitted your initial offer for the contract, you’re small for the life of the contract. So says 13 C.F.R. § 121.404–although this could be changing in the future based on a proposed SBA rule. Furthermore, this is the general rule with set-aside IDIQs as well: If you’re small at the time of initial offer for the IDIQ, you’re small for all orders under that IDIQ. (Not so with set-aside task orders under otherwise unrestricted IDIQs, there it very much is time of offer for the task order rather than the IDIQ for the date to determine size). However, there are a couple of exceptions. The biggest one is where the contracting officer explicitly requests size recertification for the given task order. In that case, an offeror must show it is still a small business as of when it submits its offer for that task order. One contractor recently protested when the contracting officer did just that. Here, we’ll explore that GAO decision.
Continue readingTag Archives: size recertification
SBA Proposed Rule: New Size and Status Recertification Standard
In a proposed rule in August of 2024, SBA has unveiled a brand new regulation related specifically to recertification of size and status. A frequent question of federal contractors is whether they can continue to be small, or maintain a specific socio-economic status (i.e., WOSB, SDVOSB etc.) after a change in ownership or business structure. The SBA’s size and status recertification standards are currently found in multiple places: the size determination timing regulations, each socio-economic status regulation, and of course in case law. But this would presumably create a one stop shop for size recertification questions, while also changing some of the long relied-upon standards.
Continue readingSBA Confirms that Size Status Relates Back to Time of Offer, Even After Sale of Small Business
Over the years, SBA size regulations have included the general rule that the size status of a business generally relates back the time of initial offer on a contract. Therefore, a small business generally stays small for the duration of a federal contract, with some exceptions. However, there was also language in the rule that required small businesses to recertify their size status after being acquired or going through similar transactions. The effect of this recertification requirement was always a little unclear. If you recertify as large, does that have any effect on your small business status for orders under contracts awarded when the business was small? Now, OHA has answered that concern.
Continue readingSmall Business Being Acquired by a Large Business? For Multiple Award Contracts, the 180-Day Rule Doesn’t Apply to Task Orders, says GAO
You may recall a post of ours back in April 2021, where we discussed a little-known change to SBA’s size determination rules that occurred in October 2020. SBA created an exception, at 13 C.F.R. § 121.404(g)(2)(iii), to the usual “size is determined at offer date” rule. Now, prior to award, when a small business is part of a merger or acquisition after it makes an offer on a solicitation, the business has to recertify its size, and depending on when that acquisition occurred, if the business is now large, it may lose its award.
However, the rule is for better or worse not that straightforward, as a small business learned in a recent GAO decision. Because a part of the rule says that task order awards in such cases may not be treated as small business awards, GAO concluded that such awards are still allowed.
Continue readingCOFC Examines Small Business Size Recertification After Merger or Sale
A recent Court of Federal Claims decision examined the impact on the award to a small business when that small business is acquired, after proposal submission but before award, by a large business. In doing so, the court looked very closely at the FAR clauses incorporated into the solicitation by reference, versus those that are incorporated in full text.
Continue readingAre You a Small Business Being Acquired by a Large Business? Check Your Pending Bids
Many small business clients of mine have been approached by or considered acquisition by a larger firm. Well, if this sort of sale or merger would turn a small business into a large business, the small business should pay close attention to a little-publicized change stemming from SBA’s Mentor-Protégé Consolidation rule that came out last fall. The new rule could result in a company losing out on an otherwise successful bid.
Continue readingSBA Proposes to Change When Companies Need to Recertify Size and Status for Orders
SBA recently proposed changes to a number of its small business rules, as we’ve written about in earlier posts. The same proposed rule includes a small but significant change to when a business has to recertify its size and status for orders under multiple award contracts.
Based on the number of times we’ve written about size and status protests for orders under multiple award contracts (see the related content at the bottom of this post for a sampling), this is an area in need of clarity.
Continue reading