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Multiple Award IDIQ Small Business rerepresentation due to novation

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Hello, 

Here is my situation that I was hoping wifcon could help me with. I have a multiple award IDIQ that was solicited as a total small business set aside. Award was made to three small businesses to make up the multiple award “pool”. One of the vendors was bought out by a large business making them now other than small. I have seen similar wifcon discussions but none seem to answer my issue. Can the now large business still compete on IDIQ requirements? FAR 16.505(b) states fair opportunity must be given, FAR 19.301-2 states that it does not change the terms and conditions of the contract, but does not FAR 19.502-2(b)(1) apply that I have two other small business vendors must I not set aside?

 

Thank you!

 

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23 minutes ago, ContractingPeoplesHatred said:

One of the vendors was bought out by a large business making them now other than small... Can the now large business still compete on IDIQ requirements?

I think the answer is yes, unless the contract itself says otherwise. But see 13 CFR § 121.404(g). 

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1 hour ago, ContractingPeoplesHatred said:

Can the now large business still compete on IDIQ requirements? FAR 16.505(b) states fair opportunity must be given, FAR 19.301-2 states that it does not change the terms and conditions of the contract, but does not FAR 19.502-2(b)(1) apply that I have two other small business vendors must I not set aside?

The contracting officer has the discretion to require the contract holders to recertify their small business size status when competing an order under an IDIQ. See InuTeq, LLC, B-411781, Oct. 21, 2015:

Quote

With regard to long-term multiple-award contracts, including GSA schedule contracts, a contracting officer has the discretion to request recertification of offerors’ small business size status in connection with the issuance of task orders. 13 C.F.R. § 121.404(a)(1)(i); Enterprise Information Services, Inc., B-403028, Sept. 10, 2010, 2010 CPD ¶ 213 at 3-4. In issuing its regulations regarding small business size determinations under multiple-award long-term contracts, the Small Business Administration (SBA) has specifically stated: Allowing procuring agencies to request size certifications in connection with particular orders is consistent with the purposes of the Small Business Act (procurements meant for small businesses should be awarded to small businesses) . . . . The final rule gives contracting officers the discretion to request size certifications for individual orders, but does not require them to do so. . . .

71 Fed. Reg. 66434, 66438 (2006).

Also, see Title 13, Chapter I, Part 121 of the Code of Federal Regulations.

Quote

§121.404   When is the size status of a business concern determined?

(a) SBA determines the size status of a concern, including its affiliates, as of the date the concern submits a written self-certification that it is small to the procuring activity as part of its initial offer (or other formal response to a solicitation), which includes price.

(1) With respect to Multiple Award Contracts and orders issued against a Multiple Award Contract:

(i) SBA determines size at the time of initial offer (or other formal response to a solicitation), which includes price, for a Multiple Award Contract based upon the size standard set forth in the solicitation for the Multiple Award Contract if a single NAICS codes is assigned as set forth in §121.402(c)(i)(A). If a business is small at the time of offer for the Multiple Award Contract, it is small for each order issued against the contract, unless a contracting officer requests a new size certification in connection with a specific order.

(ii) SBA determines size at the time of initial offer (or other formal response to a solicitation), which includes price, for a Multiple Award Contract based upon the size standard set forth for each discrete category (e.g., CLIN, SIN, Sector, FA or equivalent) for which a business concern submits an offer and represents it is small for the Multiple Award Contract as set forth in §121.402(c)(i)(B). If the business concern submits an offer for the entire Multiple Award Contract, SBA will determine whether it meets the size standard for each discrete category (CLIN, SIN, Sector, FA or equivalent). If a business is small at the time of offer for a discrete category on the Multiple Award Contract, it is small for each order issued against that category with the same NAICS code and corresponding size standard, unless a contracting officer requests a new size certification in connection with a specific order.

(iii) SBA will determine size at the time of initial offer (or other formal response to a solicitation), which includes price, for an order issued against a Multiple Award Contract if the contracting officer requests a new size certification for the order.

__________

(g) 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 (see§121.1042(c) for designation of NAICS codes on 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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Is FAR 52.219-28 in the contract and if it is has the acquired concern complied with the recertification requirements?   In that case, as Vern pointed out, 13 CFR 121.404(g) specifically (g)(4) comes into play. 

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4 hours ago, napolik said:

The contracting officer has the discretion to require the contract holders to recertify their small business size status when competing an order under an IDIQ. See InuTeq, LLC, B-411781, Oct. 21, 2015

I am not convinced that the InuTeq decision is pertinent in this case. It was about recertification for an order under a GSA schedule contract. I think the OP's case is about orders against an IDIQ contract awarded under FAR Part 16.504.

The SBA rules about recertification deal only with what an agency can take credit for when reporting small business awards. They do not address the question that the OP asked. I think that if the IDIQ contract does not say that if asked to recertify, and if no longer a small business, a firm will no longer be eligible for orders, then to preclude the firm from further participation on grounds that it is no longer a small business would be breach of contract.

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I agree with Vern's analysis.  !3 CFR 121.404(g)(4) and FAR 52.219-28 do not prohibit an agency from issuing awards under a set aside IDIQ contract to a contractor that is no longer small.  Under single award IDIQ contracts, in my experience, the agency merely stops issuing orders to such a contractor, terminates the contract for convenience or does not exercise the next option.  Termination for convenience or not exercising an option appear to be steps that the SBA encourages agencies to take in situations such as those described by the OP.  See 13 CFR 125.2(e)(2)(iii) where the use of an "off ramp" in multiple award set aside IDIQ contracts is discussed.

The OP posed a second question in regard to the need to follow the rule of two when issuing orders against a multiple award IDIQ contract that has been set aside.  I do not see any requirement for an agency to conduct a rule of two analysis in regard to orders issued under a set aside multiple award IDIQ contract.  The rule of two analysis was already conducted in regard to award of the contract.  I do not see a requirement to conduct a second rule of two analysis before issuing orders under such a contract.

The OP also brought up FAR 16.505.  That section requires multiple award IDIQ contracts to describe the procedures that will be used to award orders under them.  If those procedures are not followed, a contractor adversely affected by this action can file a claim under the Disputes clause of the contract challenging the non-compliance by the agency.

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