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contractor100

small business credit on GSA schedule under new rules

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This question concerns GSA schedules, but I believe the rules on this are the same for GSA schedules and other MACs.

New rules are Fed. Reg. 78 191 Oct 2, 2013

Company was awarded a GSA schedule, in a SIN with multiple NAICS, call the NAICS "A," "B," "C."

Company certified itself as small for one of the NAICS in that SIN, say, "A".

Company has now grown out of that size for all NAICS in that SIN, but has not been required to recertify its status on the GSA schedule and won't have to for another four years. So Company is still listed in GSA's systems and in FPDS as small for this MAC.

Under the new rules, if a task order is issued against the SIN and the CO lists "B" as the one and only NAICS,

Question 1: if Company is awarded the work, can government take small business credit for the award?

Question 2: if the government sets aside the work for small businesses, can Company represent itself as small?

Next question

Company added another SIN after award. Company was not asked to certify its size on that SIN, but Company was not small for the NAICS associated with that SIN when Company added the SIN. Same questions.

The commenter of 11/06/2013 on the GSA Interact blog states that the government will automatically get credit for Company's bids on both the old and the new SIN, because agencies' procurement systems are not able to recognize companies as small for some subsets of a contract and large for another. He says procurement systems will automatically give the government credit for the award.

https://interact.gsa.gov/wiki/naics-codes-business-size-and-schedule-orders

However, in cases where the task order had been setaside, wouldn't Company be liable for the penalties for misrepresenting its size status if it certified itself as small, for the NAICS for which it had never certified?

A lot of moderately innocent contractors are going to be violating this rule, it is not at all clear.

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I am often struck by how complicated GSA FSS contracting has become. It strikes me as one of the most complicated, perhaps the most complicated, of all methods of acquisition.

By trying to be everything for everyone, it may have become a perfect example of the paradox of choice:

More is less.

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Mr. Edwards you make an excellent point.

I am often taken aback at how frequesntly and how quickly many consultants and even government employed/subsidized small business counselors (including those found at SBA and at PTACs) champion GSA FSS contracting for companies new to government contracting and to start-up companies.

While there may be the odd new company or two that may be ready to make that leap straight into a GSA contract, like a high school basketball player to the NBA, many and probably most are not.

The expense of compliance and cost of noncompliance can often be too much for a small business to overcome.

Too many of these consultants in my experience focus and "sell" how to get a GSA contract without educating and ensuring that their clients know what it takes to comply and sustain success with a GSA contract.

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In fact, it is a counselor that is advising me that, "once you are on GSA schedule, you are small for any order issued against it until you have to recertify at option extension." Because GSA will not allow contractors to recertify except at option, merger/acquisition, or novation, contractors can't recertify for new SINs.

That seems to conflict with the language from the new rule below. So, are contractors misrepresenting their size if they certify they are "small under their GSA Schedule contract," even if they never represented as small for the NAICS on the RFQ?

'A concern that represents itself as a small business and qualifies as small at the time of its initial offer (or other formal response to a solicitation), which includes price, is considered to be a small business throughout the life of that contract. This means that if a business concern is small at the time of initial offer for a Multiple Award Contract...then it will be considered small for each order issued against the contract with the same NAICS code and size standard, unless a contracting officer requests a new size certification in connection with a specific order.'

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This was always an interesting topic of discussion when I worked at GSA. The FAR even double-talks it:

8.405-5 ( b ): Orders placed against schedule contracts may be credited toward the ordering activity’s small business goals. For purposes of reporting an order placed with a small business schedule contractor, an ordering agency may only take credit if the awardee meets a size standard that corresponds to the work performed. Ordering activities should rely on the small business representations made by schedule contractors at the contract level.

So in one sentence it states that the awardee must meet a size standard that corresponds to the work performed, and in the next sentence it states that the ordering activity should rely on the representations made at the contract level.

I've seen agencies cherry-pick the part they wanted to. If they wanted the representation they only observed the last sentence and if they didn't want that company they would go with the other.

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