In this part of our ongoing series (see Part I, Part II and Part III) on the Small Business Government Contracting and National Defense Authorization Act of 2013 Amendments implementing the National Defense Authorization Act of 2013 (FY2013 NDAA) Amendments, we address the new recertification requirement that is triggered following the merger, sale, or acquisition of a firm that has submitted an offer as a small business concern (SBC).
A concern that represents itself as a small business and qualifies as small at the time of proposal submission is considered to be a small business throughout the life of that contract. This even applies for Multiple Award Contracts—the SBC is considered small for each order issued against the contract with the same NAICS code and size standard (unless a contracting officer chooses to request a new size certification in connection with a particular order). In other words, even where a concern grows to be other than small, the procuring agency may exercise options and still count the award as an award to a SBC, unless a recertification requirement has been triggered.
Given the great boon that comes to a firm upon award of a contract where it has qualified as a SBC, the SBA has long sought to set the right balance for what should happen when a small business is involved in a merger, sale, or acquisition. The concern is that if a SBC could submit a proposal with pricing, certify that it is small, and actually qualify on that date of proposal submission as small, should that small business be able to sell itself following proposal submission or contract award to a large business and allow the large business to benefit for up to five years of contract performance as a “small business”? The SBA’s answer to that is no. The SBA’s regulations as currently drafted require recertification in certain circumstances following a merger, sale, or acquisition but only once award has already been made. In the final rule, SBA imposes new recertification requirements aimed at changes that occur within the window between proposal submission and contract award.