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8(a) small business set-asides / sole-sources under Federal Supply Schedules

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FAR 19.804-6 © states, “An 8(a) concern may continue to accept new orders under a multiple award, Federal Supply Schedule (FSS), multi-agency contract or Governmentwide acquisition contract even after a concern’s program term expires, the concern otherwise exits the 8(a) Program, or the concern becomes other than small for the NAICS code assigned under the contract.”

In light of this clause, with regard to Federal Supply Schedules (FSS), I would like to clarify the following scenarios:

1. If a company represents itself as a Small Business under the applicable NAICS code at the time the FSS is initially awarded, may it continue to receive new task orders issued as a small-business set-aside or sole-source under that FSS after it becomes other than small for the NAICS code assigned to the contract? If so, for how long?

2. If a company represents itself as a Large Business under the applicable NAICS code at the time the FSS is initially awarded, does FAR 19.804-6© still allow the company to receive small-business set-aside or sole-source task orders against this FSS? If so, for how long? If not, why?

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You forgot to cite the regs that say if a contractor cannot rerepresent that it is small, the agency cannot count future awards to that contractor as a small business.

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napolik, my post wasn't related to the earlier post you referenced, although it's somewhat related. The most important question is No. 2 at the top. If a company represents itself as a Large Business under the applicable NAICS code at the time the FSS is initially awarded, does FAR 19.804-6 paragraph C still allow the company to receive small-business set-aside or sole-source task orders against this FSS? If so, for how long? If not, why?

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You have lost me on this one - If the company was large at the time the contract was awarded how could they be an 8(a) contractor.

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It would help a lot if you would state your purpose (or question) at the very beginning, especially in a long post, so that we can understand what to look for when we read. Then it would help to lead us through so we can see progress to your conclusion(s).

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I don't think anyone understands what you are asking. You are stating that they represented themselves as a large business under hte FSS NAICS at time of award, so how would they receive any small business set-asides under said FSS?

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The FAR requires the clause at 52.219-28 to be inserted in all contracts exceeding the SAT and which are to be performed in the U.S. That means it is required to be inserted in contracts with large businesses. If the contract is a long term contract, such as an FSS contract, contractors are required to recertify (rerepresent) their size status every five years. Therefore, if a concern was large when it received an FSS contract, after five years it could rerepresent its size status as small for the next five year period. In that case, the former large business could receive orders as a small business.

Also, agencies have the discretion to require a recertification for specific task orders. If an agency asks for a recertification for a specific task order under an FSS contract, if a firm was large when it received a contract, but has subsequently become small, it could certify itself as small for that task order.

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All, I apologize if the question in the original post was unclear, and I do appreciate your assistance.

The scenario is an 8(a) contractor which is considered a small business under its primary NAICS code; however it is Large under the NAICS code for the FSS Schedule in question. It properly represented itself as Large at the time the FSS Schedule was awarded.

There is uncertainty within our organization on whether the language at FAR 19.804-6 © authorizes an 8(a)-certified company which was awarded a FSS as a Large business, to receive task orders as a small business set-aside under this FSS. The FAR language states, "“An 8(a) concern may continue to accept new orders under a multiple award, Federal Supply Schedule (FSS), multi-agency contract or Governmentwide acquisition contract even after a concern’s program term expires, the concern otherwise exits the 8(a) Program, or the concern becomes other than small for the NAICS code assigned under the contract."

Question: Can this clause reasonably be interpreted to allow an 8(a) company which represented itself as a Large business during award of the FSS, to accept new orders under the FSS which are set-aside for Small Businesses?

In order words: In order to "continue to accept new orders" under this FAR clause, must the business have represented itself as Small at the time of FSS award? If so, are there any exceptions to this?

Thank you all again for your assistance.

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FAR 19.804-6( c) says that if a company received an 8(a) award of a multiple award, FSS, multi-agency, or GWACs contract, it can continue to accept new orders under the contract even after its program term expires, it otherwise leaves the 8(a) program, or it becomes other than small under the contract NAICS code.

You are asking whether a firm that is an 8(a) company under one NAICS code, but a large business under another, can receive a small business set aside award under an FSS contract that is covered by the second NAICS code. Is that your question?

If that's your question, then FAR 19.804-6( c) does not answer it. Has nothing to do with it.

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Vern, I agree with you, and I just needed to confirm this. My understanding is that a company needs to be qualified as Small at the time it submits its initial offer for an FSS, in order to be eligible for task orders issued as a small business set-aside under that FSS. Small Business status is defined according to the NAICS code in the solicitation, at the time the offeror submits their initial offer (This is true for any contract).

I think FAR 19.804-6 (c ) is applicable where a company is awarded an FSS as a Small Business, then subsequently graduates the 8(a) program or outgrows the applicable size standard during the 5-year award term. FAR 19.804-6 confirms that such an 8(a) firm can continue to receive task orders as 8(a) set-asides during the 5-year base period of the FSS, because their 8(a) small business status is derived from the size status representation at the time of award. After 5 years, they are required to re-certify their size status, and would no longer be eligible as a small business.

However, where the 8(a) firm was Large to begin with when the FSS was awarded, FAR 19.804-6 does not authorize such a firm to receive task orders under the FSS which are 8(a) or small business set-aside.

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I found this thread very informative and interesting. I will say I was a little concerned to see the terms "8(a)" and "Large Business" used to define at the same point in time, in my reading, the status of the firm. I then started reading 13 CFR 124 and 13 CFR 121 and will admit I gave up. Of note were 13 CFR 124.102 and 519 for a couple references that stopped me. I then concluded that the questions raised in this thread might be better referred to a an expert in the matters of 8(a) and FSS eligibility.

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FAR 19.804-6 © states, “An 8(a) concern may continue to accept new orders under a multiple award, Federal Supply Schedule (FSS), multi-agency contract or Governmentwide acquisition contract even after a concern’s program term expires, the concern otherwise exits the 8(a) Program, or the concern becomes other than small for the NAICS code assigned under the contract.”

In light of this clause, with regard to Federal Supply Schedules (FSS), I would like to clarify the following scenarios:

1. If a company represents itself as a Small Business under the applicable NAICS code at the time the FSS is initially awarded, may it continue to receive new task orders issued as a small-business set-aside or sole-source under that FSS after it becomes other than small for the NAICS code assigned to the contract? If so, for how long?

2. If a company represents itself as a Large Business under the applicable NAICS code at the time the FSS is initially awarded, does FAR 19.804-6© still allow the company to receive small-business set-aside or sole-source task orders against this FSS? If so, for how long? If not, why?

Your questions are confusing. You start out by talking about FAR 19.804-6, which is about 8(a) contractors, but your questions seem to be about small businesses generally, not just 8(a) contractors. Are you asking about 8(a) contractors or small businesses generally?

If the first question is about 8(a) contractors, then the answer is yes, throughout the life of the contract. See 13 CFR 124.503(h):

(h) Task or Delivery Order Contracts--

(1) Contracts set aside for exclusive competition among 8(a) Participants.

(i) A task or delivery order contract that is reserved exclusively for 8(a) Program Participants must follow the normal 8(a) competitive procedures, including an offering to and acceptance into the 8(a) program, SBA eligibility verification of the apparent successful offerors prior to contract award, and application of the performance of work requirements set forth in 124.510, and the nonmanufacturer rule, if applicable, (see 121.406(B).

(ii) Individual orders need not be offered to or accepted into the 8(a) BD program.

(iii) A concern awarded such a contract may generally continue to receive new orders even if it has grown to be other than small or has exited the 8(a) BD program, and agencies may continue to take credit toward their prime contracting goals for orders awarded to 8(a) Participants. However, a concern may not receive, and agencies may not take 8(a), SDB or small business credit, for an order where the concern has been asked by the procuring agency to re-certify its size status and is unable to do so (see 121.404(g))), or where ownership or control of the concern has changed and SBA has granted a waiver to allow performance to continue (see 124.515).

As I posted earlier, FAR 19.804-6 does not address your second question.

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My previous post may have confused the matter. Sorry. After re-reading the entire thread I found this on GSA's website. While it is only a blog I believe it presents adequate references to support the position expressed. Hope this helps.

https://interact.gsa.gov/wiki/can-schedule-contractor-be-one-business-size-order-and-different-business-size-schedule-contrac

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C Culham, that's a good link. And yes, the definition of small business is dependent on the NAICS code of a specific solicitation. A company with less than 1,500 employees could be considered "small" by some size standards, while a company with greater than $7 million in revenue could be "large" by other size standards. So it's common for growing 8(a) firms to be "small" and "large" at the same time, depending on the context. It produces a lot of complex but interesting questions. The question becomes not, "Are we still an 8(a) firm?" - the answer is yes - but "Are we a small business?" The answer is yes and no. An 8(a) firm must be small within its primary NAICS code, or it could be (but not always) subject to early graduation.

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