Industry groups ask for changes to size standard rule

One industry group asked the Small Business Administration to delay implementation of a rule that would require small businesses that receive a multiple-award schedule or other multiple-award contract to annually recertify their size, and another said requiring annual certification was excessive, according to comments on the rule sent to the SBA.

The Professional Services Council, an Arlington, Va., trade group that represents technical and professional services firms selling to the federal government, asked for the delay.

The proposed rule raises many issues that should be addressed before implementation, according to comments submitted by Alan Chvotkin, PSC's senior vice president and counsel.

PSC said the proposed rule:

  • Does not recognize that a firm could be categorized as small for a contract based on one North American Industry Classification code and large for a contract based on a different code.

  • Could discourage companies from forming teaming arrangements if a change in size status of one team member jeopardizes the contract vehicle for all members.

  • Covers only the GSA Federal Supply Schedule's multiple award schedule program and multiple award contracts, when it could cover all contracts.

  • Conflicts with other rules that require recertification at the end of each five-year option period on governmentwide acquisition contracts and GSA schedule contracts.

  • "There are a significant, and growing, number of small businesses on multiple-award contracts where large and small business firms are teaming partners and subcontractors. In fact, the government strongly encourages these small business teaming arrangements to open up greater opportunities for small business to compete for these contracts and subsequent task orders," PSC commented.

    "Frequent (such as annual) re-certification will cast doubt on small business' ability to establish and maintain long-term teaming arrangements with other small businesses if the size status change of any one member of a team jeopardizes the entire contract vehicle for all team members," PSC said. "Under such scenarios, SBA should consider permitting small businesses to jettison from the team a business that no longer qualifies as 'small' without other team members losing their status."

    Officials of PSC and the Information Technology Association of America said they agree with the premise of the proposed rule that businesses should not be considered small for the purposes of federal procurements long after they have exceeded the government's small-business size standards.

    However, Arlington-based ITAA said the SBA's proposal to require annual recertification would cause unreasonable administrative burdens on prime contractors, subcontractors and agencies.

    ITAA, which represents information technology firms, said it would prefer recertification on the anniversary date of the contract and then every five years, an approach recently taken by the General Services Administration.

    "An important goal of encouraging small businesses to team with prime contractors is to foster growth of those businesses. Requiring annual recertification could hamper that growth," said Olga Grkavac, ITAA's executive vice president.

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