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Can a Schedule Contractor Be of One Business Size on the Order and a Different Business Size on the Schedule Contract?

Yes. This is possible but only if the Ordering Officer has the Schedule contractor recertify its business size at the task order level.  This would most likely (but not exclusively) occur where the NAICS Code used by the GSA Schedule CO is different than the NAICS Code representing the preponderance of the work on a particular task order.  Recall from the previous blog post that the NAICS Code on the Schedule contract award might not be the same as the NAICS Code used on the task order, for certain Schedules with more than one NAICS Code as shown on the standing solicitation at FedBizOpps. (If you don't know how to find that document, read this.) A different NAICS Code can mean different size standards. Different size standards can mean different business sizes even for the same company.  

Even on a single-NAICS Code-Schedule like Language 736 II, where the Schedule contract and the task order both have the same single NAICS Code, the Ordering Officer could decide to ask the contractor to recertify its business size at the task order level because the contractor was Large when awarded the Schedule contract but is now Small due to: (1) a decrease in average annual gross receipts, (2) a decrease in the number of employees, (3) an increase in the size standard for that NAICS Code, or (4) some combination of the foregoing.  Keep in mind that Schedule contractors keep their business size from one five-year option period to the next unless they are required by their GSA Schedule PCO to recertify business size due to merger, acquisition, or novation.

The general rule is that the business size on the contract is the same as the business size on the order.  FPDS currently takes business size/type(s) from the Schedule contract and applies that same size to the order. As a result, that reporting system enforces this general FAR rule: "Ordering activities should rely on the small business representations made by schedule contractors at the contract level." FAR 8.405-5(a).

SBA size regulations permit recertification at the task order level.  "Where the contracting officer explicitly requires concerns to recertify their size status in response to a solicitation for an order, SBA will determine size as of the date the concern submits its self-representation as part of its response to the solicitation for the order." 13 CFR 121.404(g)(3)(v). (Emphasis added.)  In the Federal Register discussion of that regulation, SBA noted that allowing procuring agencies to request size certifications in connection with particular orders has been upheld by the GAO (CMS Information Services Inc., B-290541, Aug. 7, 2002) and by the Court of Federal Claims (LB&B Associates, Inc., v. U.S., 68 Fed. Cl. 765 (Fed. Cl. 2005). The regulations give ordering officers the discretion to request size certifications for individual orders, but does not require them to do so.

Most ordering agencies I've discussed this issue with believe that size recertification at the task order level is more trouble than it is worth.  Of course, ordering activities should just realize it is not prohibited and there might even be situations (particularly on large orders where the contractor is Large on the Schedule contract but certifies as Small on the order) where it might be worth the effort to try and "fool" FPDS (or attempt to obtained the socioeconomic credit offline, if possible) in order to do something that is permitted by regulation and court/GAO decision but is constrained by the FPDS system.  Please don't ask me what buttons you need to push to make this socioeconomic credit happen. Instead, feel free to see your own agency's system administrator if you feel it's in your agency's best interest to do a size recertification at the task order level.

Also note that it is imprecise to call a concern simply and generically "Small" or "Large" unless you really mean the concern is "Small" or "Large" for every NAICS Code.  That is because business size is always in reference to a particular NAICS Code, rather than a generic size in the abstract.  Some contractors are either "Small" or "Large" for every NAICS Code shown its CCR page.  Other contractors are "Small" for some of those NAICS Codes and "Large" for other NAICS Codes, even though that CCR page may imprecisely indicate the concern generically is of a particular size by showing only one business size for the concern.  A more accurate representation at CCR would show the business size for each of a concern's NAICS Codes. This is why a general statement like "Acme Company is Small" is vague and imprecise while a statement like "Acme Company is Small for NAICS Code "A" ($Y Million), but Large for NAICS Code "B" ($X Million)" actually provides useful information and properly puts business size, which never exists in the abstract,  in the required context of particular NAICS Code(s) and size standard(s).

[NOTE:  Original content created by Dave Clemens.  Edited by Dan Briest on 7/22/11.] 


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