An offeror bidding on a federal contract set-aside for small businesses may challenge another offeror’s representation that it is a small business concern. Such size protests are referred to the Small Business Administration (SBA) area office where the challenged offeror is headquartered. The challenged concern must then establish that it is indeed a small business. Per SBA regulations, if the challenged concern fails to submit a completed SBA Form 355 regarding size determination information or otherwise does not adequately respond to requests for information or size protest allegations in a timely manner, it risks the SBA presuming that the disclosure of the requested information would demonstrate that the concern is other than small. In this regard, the SBA Office of Hearings and Appeals (OHA) has developed a three-factor test to determine whether an adverse inference is appropriate. First, the information the SBA area office seeks must be relevant to an issue in the size determination. Second, there must be a level of connection between the entity being protested and the entity the SBA area office is seeking information from. Third, the request for information by the area office must be specific. If the challenged concern does not provide the requested information and these three factors are met, the SBA may infer that the disclosure of the information would show that the concern is other than small.

The Small Business Administration (SBA) has a longstanding rule that a business that represents itself as small at the time of contract award remains small for the life of that contract, unless the contracting officer (CO) expressly requests recertification. This rule also applies to long-term multiple award contracts (MACs) against which orders may be issued. Thus, it is typically at the CO’s discretion whether to require businesses to recertify their size status for individual orders under long-term MACs. The determination regarding whether the CO required recertification for an individual order is primarily made based on the plain language of the task order solicitation and relevant clauses included in the overarching long-term MAC. A size status recertification is required if the task order solicitation plainly includes language requiring recertification or otherwise asks offerors to verify, in writing, that they are a small business under the applicable North American Industry Classification System (NAICS) code at the time of submitting their task order proposals. Notably, the fact that an order is set aside for small businesses does not, by itself, mean that a size recertification is requested. However, the task order solicitation need not expressly use terms such as “certify” or “recertify” when requesting a recertification when it is clear to the offerors that a representation regarding their size status at the time of task order proposal submission or award is necessary. Similarly, the small business set-aside solicitation need not explicitly state the size standard if it identifies an applicable NAICS code that adequately conveys the required size standard information to offerors.

Procuring agencies have significant discretion when repurchasing products or services after a termination for default under a substitute contract, since the federal statutes and regulations that govern standard procurements do not strictly apply to reprocurements. As the default provision applicable to fixed-price contracts, Federal Acquisition Regulation (FAR) 49.402-6 governs most reprocurements. For commercial products or services purchased through the General Services Administration (GSA) Federal Supply Schedule (FSS) program using FAR Part 8 procedures, FAR 49.402-6 serves only as guidance unless it conflicts with specific commercial item acquisition procedures. Notably, FAR 8.406-4(a)(1) mandates compliance with FAR 12.403 for FSS commercial item acquisitions, which in turn grants the procuring agency all remedies available to commercial buyers when conducting a reprocurement. The government’s preferred remedy after a default termination under the FAR is to acquire similar items from another contractor. The government may reprocure from the next-lowest-priced, qualified offeror as long as there is an ongoing need for the products or services and only a short time has passed between the original competition and the termination. In conducting the reprocurement, the agency must still provide competition to the maximum extent practicable, and the period of performance under the reprocurement must not exceed the term remaining on the terminated contract. Furthermore, for GSA FSS reprocurements, the agency is only required to acquire items similar to those in the original solicitation, not necessarily identical.