Updating Size Standards for NAICS Sector 54 Professional, Technical, and Scientific Services

Submitted by MAS Blogger on Thursday, March 8, 2012 - 3:33 PM

As many of you are probably aware, on February 10, 2012 the Small Business Administration (SBA) issued a Final Rule increasing 37 small business size standards for 34 industries and three sub-industries in North American Industry Classification System (NAICS) Sector 54 Professional, Technical, and Scientific Services. SBA is retaining the current standards for the remaining industries in NAICS Sector 54. The “new” size standards have an effective date of March 12, 2012.

Contractors whose Schedule contracts are assigned one of these updated NAICS codes can take the below action.

Contractors currently listed as a small business under the Schedule contract:

Since you are already small under the contract and your size status would not change due to the increased size standards, there is no reason for you to rerepresent at this time.

Contractors currently listed as other than small business under the Schedule contract:

You can only rerepresent under the following conditions:
1) Within 30 days of a novation agreement; or
2) Within 30 days after a merger or acquisition; or
3) Within 60 to 120 days prior to the exercise of an option.

AND

You now qualify as a small business under the updated size standards. [See FAR 19.301-3]

In the meantime, the Schedules that include the affected NAICS codes will begin the process of refreshing their solicitations to reflect the updated size standards. Once the solicitations are refreshed, existing contracts will be modified through the Mass Modification process to reflect the updated size standards. Rerepresentation mods do not have to wait for the solicitation refresh or Mass Modification in order to be processed. This is because the FAR requires contractors to rerepresent their size in accordance with the size standard that corresponds to the NAICS code assigned to the contract in effect at time of representation and not the size standard listed in the contract.

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North American Industry Classification System

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increase small business size standards

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Comments

Brad deMers

Regarding SBC_07's  question scenerio, here is my assumption: 1. MOBIS contract was awarded as a small business. 2. Option renewal in December 2011 re-reppred as large. 3. Now qualifies as small under new size standards. From my understanding of policy, we will now accept a size re-rep at ANY TIME from a business who was originally awarded as a small business on thier GSA MAS contract then subsequently changed to Large (like the scenerio above). I am just now posting this because I was talking to a co-worker about this subject and suddenly remembered this post and thought I would update my answer. Here is the rationale behind it (Thanks go to Mahruba Uddowla for this excellent interpretation of the FAR): Q. How are small business contractors able to re-represent at any time but large business contractors have to wait for certain conditions?A. FAR <a href="https://www.acquisition.gov/far/current/html/Subpart%2019_3.html#wp1099294">19.301-2</a> covers rerepresentation requirements of small business concerns. This section lists the various times when a small business contractor mustrerepresent; it does not prohibit small business contractors from rerepresenting at other times. FAR <a href="https://www.acquisition.gov/far/current/html/Subpart%2019_3.html#wp1099294">19.301-3</a> covers rerepresentation requirements of large business concerns. This section specifies that while large business contractors are never required to rerepresent, they can choose to rerepresent but only under certain conditions.

Posted 10/02/2012 2:50 PM

SBDC_07

Let me set a scenario:- I'm Company B and have a MOBIS schedule and certified as small business.- I had to renew my option in December 2011, but because of my growth I'm no longer considered SB so I recertify as "other than small"- On March 12th, with the new size standards I could qualify again as small, however, based on the rules as described above I cannot recertify myself until 5 yrs have passed (on my next option) or one of the three conditions are met.If the above is correct, what if my company acquired Company C, that has little to no sales. Wouldn't this trigger a re-certification? and then I can re-certify that I'm a small business and enjoy this status until the end of my option?I understand that the objective of the 3 conditions was to prevent large business to taking advantage of SB opportunities, but in this case it will go the other way around.

Posted 03/28/2012 11:39 AM

Brad deMers

This is just my opinion.  Your GSA CO or SBA may have another opinon.  In accordance with FAR 19.301-3(a) you MAY be able to re-represent your size in accordance with FAR 19.301-2(b)(2). I say "MAY" because usually these conditions are thought of in the context of what has been done to "the contractor" (THEY have have been "acquired").  It is usually not thought of in the context of "the contractor" in question (the one who wants to re-rep) acquiring another contractor. Unless it was a "merger."  All of which would need a legal review. Indeed, the Code of Federal Regulations see no differnece (between being acquired or acquiring) when calculating annual receipts for determining business size.  Something you must also consider when re-representing your business size.    Reference the Code of Federal Regulations § 121.103   How does SBA determine affiliation? and § 121.104   How does SBA calculate annual receipts available <a href="http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;sid=15301f1c1c25fefb1234b3d19340dabc;rgn=div5;view=text;node=13%3A1.0.1.1.17;idno=13;cc=ecfr#13:1.0.1.1.17.1.265.4">here</a>.

Posted 03/28/2012 5:33 PM

MAS Blogger

The "other than small" MAS contractor cannot, and does not, rerep in response to the solicitation refresh. They can only rerep under one of the 3 conditions listed in the article.

Posted 03/19/2012 2:16 PM

kmcfall

In regards to the last paragraph of your post, if a MAS contractor rereps its self as a small (when previously they were other than) in response to the solicitation refresh and they do not meet the conditions noted in 1 - 3, does the original size of the company remain the same until one of the conditions noted in 1 - 3 are present?

Posted 03/19/2012 9:29 AM

MAS Blogger

Thanks for your detailed example Brad. Great explanation. :)

Posted 03/14/2012 2:10 PM

Maureen Duckworth

May I clarify this for my non-contracting officials co-workers?  I think the message is that there are 3 ways to change the business size label on your MAS contract:1) Within 30 days of a novation agreement; or 2) Within 30 days after a merger or acquisition; or 3) Within 60 to 120 days prior to the exercise of an option.  There is some other information about how the solicitations will be updated.  The update of a solicitation does not affect the existing business size label on a contract.

Posted 03/12/2012 5:09 PM

Brad deMers

Maureen Duckworth stated quote "There is some other information about how the solicitations will be updated.  The update of a solicitation does not affect the existing business size label on a contract." This is correct.  A business size IS what it IS as certified on date of offer on a MAS solicitation.  If awarded at the size it certified in its offer, it stays that "business size label" until modified by a size re-representation mod based on the three conditions stated (reference <a href="http://farsite.hill.af.mil/vffara.htm">FAR 52.219-28</a>).  A change in business size standard is not included as one of those conditions. Therefore, a contractor who represented itself as other than small business cannot change its busiess size in the middle of a contract period outside the 3 conditoins. Reference <a href="http://farsite.hill.af.mil/vffara.htm">FAR 19.301-3</a>.The AND part in the original post can be explained by an example.  Company A submitted an offer on MOBIS in January of 2007 for SIN 874-1 NAICS 541611 Size standard $7million.  Average Company A revenue over 3yrs was $8 million.  Company A certified as other than small and was awarded a contract effective May 13, 2007. Following FAR 52.219-28 comany A recertifies within 60-120 days of option.  Company A (knowing SBA may revise size standards for 541611) waits to recertify.  It recertifies on March 13, 2012. Company A's average 3 year revenue has gone up to say $13.9 million.  Based on the new size standard under NAICS 541611 (now $14 million) Company A can now recertify as a small buiness.  I know that all you aked is for is the time and I proceeded to tell you how to build a clock first, but hopefully we all can understand this matter that is definitely not exactly an easy one to understand.

Posted 03/12/2012 7:00 PM

Geri Haworth

So "AND" is significant?  Very few current contractors will meet these criteria - am I interpreting correctly?  Our center is getting a lot of calls and we want to make sure we are giving out proper advice.  Thanks,

Posted 03/12/2012 5:04 PM

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