You're Not Too Big Unless You're Asked if You're Too Big: Recertification of Small Business Status

Long-term multiple award contract vehicles are quite common in the world of federal contracting. For example, the General Services Administration (“GSA”) administers the Federal Supply Schedule (“FSS” or “Schedule”) under which contractors provide a wide range of commericial products and services under contracts that can be extended up to twenty years. The National Aeronautics and Space Administration (“NASA”) has a contract vehicle known as “SEWP” (short for “Solution for Enterprise-Wide Procurement”) that makes a wide range of technology products and services available on a government-wide basis.

Contract vehicles such as the Schedule and SEWP essentially serve as a tool for prescreening contractors so that ordering agencies may streamline their acquisition process by issuing a request for quotations to the contractors that have been awarded a SEWP or Schedule contract (or other similar contract vehicles). And, as noted above, these prescreened groups of contractors have long-term contracts.

Depending on the particular contract vehicle, a prospective contractor may be required to “certify” as a small business at the time they compete for an award of one of these contracts. In the case of the Schedule, an offeror may seek a Schedule contract as a small business so that it is able to compete for set-aside orders. Other contracts, like SEWP, establish “pools” of contractors to offer a specified set of items. Some pools are reserved for small businesses (or other types of contractors, i.e., woman-owned, veteran-owned, 8(a), etc.); others are not.

Generally speaking, if a contractor is required to certify as a small business at the outset of the contract, then it will remain small for the duration of that particular contract. See 13 C.F.R. § 121.404(g). That goes for all orders under that contract. To me, that’s generally a good thing because it allows a small concern to expand its business without being penalized for its success under that contract. However, contracting officers always have the discretion to request that a particular concern “recertify” as small for a particular set-aside order.

A rule adopted in 2020 adds a wrinkle to this regime. You’ll note in the preceding paragraph that I used the phrase “if a contractor is required to certify as a small business at the outset of the contract.” This is the wrinkle. If a multiple award contract is awarded on an unrestricted basis, then an entity has to certify itself as small for a given set-aside order under that contract regardless of whether it was small at the inception of the contract. See 13 C.F.R. § 121.404(a)(1)(i)(A).

This also applies to multiple award contracts have multiple “pools” some of which are reserved for small businesses while others are not. An RFQ issued for contractors in an unrestricted pool, but which is itself a set-aside order, will require small businesses to certify themselves for that order. This is true even if the contract they were awarded also includes them in one of the pools that was reserved for small businesses. This situation can arise for SEWP, which has four groups of contractors with some contractors holding contracts in restricted and unrestricted groups.

By the way, I decided to write this blog because of a recent decision issued by the Small Business Administration Office of Hearings and Appeals (“OHA”). See Computer World Services Corp., SBA No. SIZ-6208 (April 25, 2023). A multiple award small business contractor submitted a size protest on an order issued to a competitor that also held a contract under the same contract. OHA denied the protest on the ground that there was no need for the winner of the award to have recertified its small business status for the new order because it had certified its status at the time it got the main contract. If a protest was to be had, it should have been raised much earlier at the time the main contract was awarded—not at the time of the order.

For those contractors who are experienced in this realm, much of this is not a surprise. However, small businesses that are considering whether to dive into the world of multiple award contracting should learn more about the maze of small business regulations.