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Small business goes large while performing on a CAS covered contract


pat

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I can't seem to find an answer to this question.  If a small business goes large while performing on a CAS covered contract, large enough to require full CAS requirements, would the awarded CAS covered contract be considered in the next CAS covered contract awarded to that company?  In other words, would the next awarded CAS covered contract awarded be considered the trigger contract for compliance with CAS and would the original CAS covered contract value be used to determine, full or modified coverage?

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Contracts awarded to small businesses are exempt from CAS. Period. No matter what happens after award.

Once no longer a small business, then that exemption is no longer available to the contractor. There may be other exemptions available. Assuming no exemption is available, then that next contract award would be subject to CAS. That next contract award, standing alone, would be used to determine whether the contractor could elect modified CAS coverage.

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10 hours ago, pat said:

I can't seem to find an answer to this question.  If a small business goes large while performing on a CAS covered contract...

See SBA rule 121.404 for the rules that apply to "going large" during contract performance. https://www.ecfr.gov/cgi-bin/text-idx?SID=8cd2bc8b5b576fe23aaa3b3b947057fa&mc=true&node=pt13.1.121&rgn=div5#se13.1.121_1404.

CAS might apply to a contract modification offered and accepted to the "going large" small business if the modification is out of scope new work when the small business has already "gone large."

Also re-certification of business size status during contract performance may be requested in certain "going large" situations. See paragraph (g) of the above rules.

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13 hours ago, Neil Roberts said:

CAS might apply to a contract modification offered and accepted to the "going large" small business if the modification is out of scope new work when the small business has already "gone large."

Yeah, that is technically correct. Please walk me through how awarding an out-of-scope modification to an existing contract is acceptable under CICA. What kinds of justifications does the KO need to make?

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20 minutes ago, here_2_help said:

Please walk me through how awarding an out-of-scope modification to an existing contract is acceptable under CICA. What kinds of justifications does the KO need to make?

This happens frequently with R&D contracts, particularly where spiral development  is being used.  The agency will wish to award a follow-on contract on a sole-source basis.  The agency will go through the normal process of awarding the contract, but instead of issuing a new contract document, it will modify the existing contract.

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3 hours ago, Retreadfed said:

This happens frequently with R&D contracts, particularly where spiral development  is being used.  The agency will wish to award a follow-on contract on a sole-source basis.  The agency will go through the normal process of awarding the contract, but instead of issuing a new contract document, it will modify the existing contract.

Yes. Also encountered is a mod to an existing contract that adds long lead material for the follow-on, with an intent to issue a new follow-on contract.

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6 hours ago, here_2_help said:

Yeah, that is technically correct. Please walk me through how awarding an out-of-scope modification to an existing contract is acceptable under CICA. What kinds of justifications does the KO need to make?

This away just to add to Retread's post.   They synopsize the proposed modification as taking the route of a modification to the existing contract following the FAR rules on synopsizing a sole source.  After wading through the process and if the conclusion to still do a sole source the contract will be modified as intended to add the additional scope.  it meets CICA by following the synopsis/sole source process. 

Not sure this exactly on point just found it quickly...... https://www.gao.gov/products/b-414260

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Thank you all.  Yes we are exempt right now, but we have contracts we are performing on that are CAS contracts.  We have some that are over 7.5M awards and would require modified CAS, if we weren't exempt as a small business.  

 

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On 11/18/2020 at 10:59 AM, Retreadfed said:

This happens frequently with R&D contracts, particularly where spiral development  is being used.  The agency will wish to award a follow-on contract on a sole-source basis.  The agency will go through the normal process of awarding the contract, but instead of issuing a new contract document, it will modify the existing contract.

Actually it happens frequently across the board with lots of supplies and services - production of supplies, commercial items, IT hardware and software, development, professional services, training, etc.  Generally the scenario is the government awards based upon conservative estimates of work.  The contractor does well and the products and services are well received.  Then the government wants more. 

I’m sure in most cases, business size and much less CAS coverage is overlooked.
 

 

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