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IDIQ Subcontractor Size Question

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We were a subcontractor to a winning bid roughly a year ago when we were still under the 14M size standard for a large IDIQ contract. We have since surpassed the 14M threshold and are being told by the prime that we will no longer be able to count for their small business goals for current work and also future task orders released under this IDIQ contract. My guess would be that this is inaccurate and that we will still be able to be considered small through the life of this IDIQ contract, however, does anyone have insight as to if this is accurate?

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I would tend to agree with the prime, especially for future work. The issue isn't when the prime received the basic award or task orders, the issue is when they issued subcontracts to your firm. If they had bought out your subcontract prior to you becoming "other than small", then those subcontracts should remain undisturbed. If the prime has an efficient subcontracting program, they will verify your size status (i.e. SAMS.Gov printout) before issuing any subcontracts.

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Did the prime contractor award an IDIQ contract to you? Or does it award you a new subcontract every time it needs you under a task order that it receives?

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Vern,

Only one TO has been released, but it looks like we negotiated one SubK with them upon award and then they issue modifications when we provide individuals who become a part of the contract. Based upon this and what you responded with in your previous response, the beggining date of SubK should be the determining point of size determination, right?

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We... are being told by the prime that we will no longer be able to count for their small business goals for current work and also future task orders released under this IDIQ contract.

My thinking is that if they award a new subcontract to you whenever they receive a task order that they want you to work on, then they are correct, because your size status must be established anew before each such award.

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Understood. I will verify their intentions going forward and see if we will still be eligible to help with small business goals or not.

Thanks for your help, makes more sense now.

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Not that I disagree with what has been posted to date but does not the question also revolve around what NAICS code the prime decides to assign to the new subcontract under the new task order? In other words it has not been clarified if the sub certified to the NAICS code assigned to the prime contract or to the NAICS code assigned to the subcontract. Primes by my read must assign a NAICS code to a subcontract need to which the sub then certifies status and there are cases where the NAICS code assigned to a subcontract would be different than that assigned to the prime for the purposes of certifying SB status.

REF: FAR 2.101 - “Small business subcontractor” means a concern, including affiliates, that for subcontracts valued at—

(1) $10,000 or less, does not have more than 500 employees; and

(2) More than $10,000, does not have employees or average annual receipts exceeding the size standard in 13 CFR Part 121 (see 19.102) for the product or service it is providing on the subcontract.

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All that has gone before is based on the assumption that there is an applicable small business size standard.

If, when a prime awards a separate subcontract for work to be done under each task order it receives from the government, then there has to be a size standard for that subcontract, which would entail selecting a NAICS code and the appropriate size standard.

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Just as a footnote, I don't believe your size status is determined as of the date your subcontract was executed. It is the date you certified you were small for the IDIQ, presumably the date of your proposal to the prime. Parallel to the general rule that an offeror's size is determined when they submit the proposal, not when they are awarded the contract.

13 CFR 121.404(e) For subcontracting purposes, a concern must qualify as small as of the date that it certifies that it is small for the subcontract. The applicable size standard is that which is set forth in § 121.410 and which is in effect at the time the concern self-certifies that it is small for the subcontract

So presumably you could certfy in your proposal for an IDIQ, then receive a subcontract years later.

In 2006, when the rules on recertifying for prime contracts came out, SBA said it might reconsider this rule, I don't know if anyone knows whether they have. See

https://interact.gsa.gov/sites/default/files/sba_no_8a_credit_on_sched1.pdf

Given that a prime can rely on the subcontractor's self certification for most of the socioeconomic categories, I have always wondered why primes ask subs to recertify.

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