SBA University Overview SBA Size Recertification Regulation

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SBA UniversityOverviewSBA Size Recertification
Regulation

• Objective Review Requirements of SBA Size
  Recertification Regulation and its
  implementation in the Federal Acquisition
  Regulations

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Prior to Acquisition Reform

• Contracts had durations of five years (one year
  plus four one-year options)
• Size was determined at time of initial offer
• Gave contracting officer and offerors finality
• Procurement process can take months or years to
  complete
• Thus, under the basic rule awardee could be
  acquired by large business or grow to be large,
  and the award was still counted as an award to an
  SBC
• Mid-90s - Procurement reforms
• authorized contracts with durations greater than
  5 years
• Promoted the use of multiple award task and
  delivery order contracts
• IDIQ contracts are licenses to hunt contract
  award only entitles concern to a guaranteed
  minimum
• Contractors are supposed to compete for each
  order

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Prior to Acquisition Reform

• Agencies started limiting competition for orders
  to SBCs
• Bid protests were filed concerning agencies
  authority to limit competition to SBCs
• Size protests were filed concerning the size
  status of particular concerns in relation to
  orders
• Concerns that had grown or been acquired by large
  businesses were arguing that the basic rule
  applied, i.e., size should be determined at time
  of offer, and that they should be considered
  small for the life of the contract, which in some
  cases would mean for 20 years

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Procurement Reform and Small Business Status

• Ultimately, both GAO and the Court of Federal
  Claims determined that competition for orders
  could be limited to SBCs
• SBAs OHA determined that if competition for the
  order was limited to SBCs, concerns had to be
  small at the time of their quote or offer for
  the order
• GAO Report on procurement data - large concerns
  were coded as SBCs in the Federal Procurement
  Data System

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Proposed Rule

• In 2003 SBA issued a proposed rule to require
  re-certification on an annual basis, BUT
  requested comments on requiring re-certification
  on an order-by-order basis or every five-years
• Proposed rule applied to all multiple award
  contracts (MACs, GWACs, MAS), not just long-term
  contracts
• SBA received several hundreds of comments
• SBA had extensive consultations with DoD, GSA,
  and OFPP

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Size Re-Certification Rule

• Published November 15, 2006 (71 Fed. Reg. 66434)
• Effective Date June 30, 2007 Delay
  Implementation to November 2007 Necessary to
• Enable FAR provisions and clauses to be drafted
  and inserted into solicitations and contracts
• Mod FPDS to allow size status to be changed on a
  going-forward basis (without altering past data)
• Rule is retroactive for ALL contracts where there
  is an acquisition, merger or novation
• Short term contract will be modified to collect
  data at contract option

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Size Re-Certification Rule

• Rule applies to contracts with durations greater
  than five (5) years to collect size changes for
  growth
• Re-certification required prior to the beginning
  of 6th year, and prior to the exercise of EACH
  option thereafter - agencies use size standard in
  effect at time of option
• No requirement to terminate contracts, or
  prohibition on exercising options where size
  status changes
• No requirement to change terms and conditions of
  contract, i.e., limitations on subcontracting,
  subcontracting plan, etc.
• Applies to existing contracts and solicitations

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Size Re-Certification Rule

• Re-certification required in case of novation,
  acquisition or merger - APPLIES TO ALL CONTRACTS
• Currently, re-certification is required for
  novation and change-of-name agreements
• Acquisition/merger not defined will rely on
  affiliation rules
• NAICS code/size standard for CONTRACT required
  for all orders solicitations for orders
• Contracting officers have discretion to request
  size certifications in connection with
  solicitations for orders
• No requirement to re-certify for subcontracting
  purposes

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Size Re-Certification Rule

• Change in size will change other socio-economic
  classifications for the contract in question,
  i.e., if a concern is not small for contract,
  concern is also not SDB, HUBZone, 8(a), SDVO,
  WOSB, etc. for that contract
• No requirement to re-certify for long-term orders
  
• Protests
• SBA and the contracting officer can file at any
  time
• Notice for an option not usually required or
  given - whether a protest is timely will be
  fact-specific

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FAR Revision Parity

• Federal Acquisition Regulation (FAR)Proposed Rule
• Socioeconomic Program Parity
• Federal Register March 10, 2008 (Volume 73,
  Number 47) Pages 12699-12701
• Comment period closed May 9, 2008

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FAR Revision Parity

• Why is the FAR being revised?   
• SBA revised its regulations in 2005, to address
  equal consideration for each of its set-aside
  programs.
• The result 8(a), Historically Underutilized
  Business Zone (HUBZone) and the Service-Disabled
  Veteran Owned Small Business Concerns are given
  the same consideration when  a acquisition is
  exclusively reserved for participation of each
  program.
• Prior to that time, there was some question
  within the acquisition community as to how these
  3 programs related to one another, and to a small
  business set aside.

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FAR Revision Parity

• The 2005 revision to SBA's regulations required
  that these programs be considered before an
  acquisition is set-aside for small businesses.
• The SBA's regulations provided that while no one
  program takes priority over the
  other, the acquisition agency's small business
  goals may be one factor of consideration when
  determining which program to utilize. 
• However, where market research indicates that all
  other factors are equal, and the
  selection decision is between a HUBZone or Small
  Business set-aside, HUBZone statute requires that
  a HUBZone set-aside be utilized.

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FAR Revision Parity

• The proposed FAR revision will now align SBAs
  regulations with the Federal procurement
  regulations because.
• The acquisition community uses the FAR to conduct
  acquisitions government-wide
• Consequently changes in SBA's regulations also
  require a corresponding revision to the FAR.
•   

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FAR Revision Parity

• These changes will enhance participation for
  small businesses eligible to participate in each
  of the set-aside programs.
• It will also  give agencies the discretion to
  select a program that will enable them to better
  meet their federally mandated small business
  goals.