When does size matter?

SBA, GSA wrangle over frequency of small-business recertification

David Drabkin

J. Adam Fenster

It could take months for the General Services Administration and the Small Business Administration to agree on how often small businesses selling to the federal government should recertify their size.

The SBA is pushing for annual recertification on multiple-award contracts, while the GSA advocates recertification after five years.

"We are still working with SBA, but we are still without a draft to share with you. We expect to resolve this in the next year," GSA official David Drabkin said in late October at a conference held by the Coalition for Government Procurement.

The small-business designation allows companies to bid on contracts set aside only for these businesses. Under SBA regulation, a business is considered small over the life of its contract with a procuring agency ? up to 20 years -- even if the company grows large during that time. Small businesses complain that this rule unfairly allows agencies to award set-aside contracts to large businesses.

The SBA published a proposed new rule in April that would require small businesses that receive a multiple-award schedule or other multiple-award contracts to certify annually that they continue to meet the size standard for a small business.

GSA, on the other hand, took action in October 2002 to require recertification on its contracts after every five-year period. GSA officials had asked SBA officials to change the size rule for several years and eventually decided to take action themselves, said Drabkin, GSA's deputy associate administrator for acquisition policy.

SBA "can't get to a final rule" that would apply governmentwide "because there's a lot of discussion about what the right answer is," Drabkin said. No matter what the SBA decides, some group of government contractors will be disappointed, he said.

Drabkin said he thinks the SBA's proposed annual recertification isn't the right answer, nor are legislative proposals to require more frequent recertification.

"The right answer isn't having re-representation after one year of a two-year base period," he said, because most companies' size doesn't change that often, and also because the government's information systems don't allow for a change in size in the middle of a performance period.

Members of Congress who are advocating change "are right to be frustrated, but the solution is to change the rules," not enact a legislative fix, Drabkin said. That's because laws take too long to change when the government's contracting needs change, he said.

"If the way we do business changes, we should be able to change the rules without going to Congress," Drabkin said.

Staff Writer Gail Repsher Emery can be reached at gemery@
postnewsweektech.com.

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