On February 24, 2022, the Department of Defense, General Services Administration and National Aeronautics and Space Administration issued a Proposed Rule in order to implement changes that the Small Business Administration (SBA) made to its own regulations in November 2019.
In particular, the Proposed Rule revises FAR Part 19 to clarify three aspects of the SBA’s size standards. First, the Proposed Rule confirms that the SBA determines the size status of a business as of the date that the business submits an initial offer including price. For a multiple-award contract that does not require offerors to include price in their offers, the SBA determines size as of the date of initial offer for the multiple-award contract, whether or not the offer includes price or the price is evaluated. Second, the Proposed Rule specifies that an information technology value-added reseller under NAICS code 541519 that furnishes an end product that it does not manufacture is a small business if it has no more than 150 employees. Third, the Proposed Rule specifies grounds for protesting the status of a HUBZone, women-owned or economically disadvantaged women-owned, or service-disabled veteran-owned small business when the small business is unduly reliant on a small, non-similarly situated entity subcontractor or when a subcontractor performs the primary and vital requirements of the contract.
The Proposed Rule also revises FAR Part 19 in two other respects. It revises FAR 19.504 to clarify that if a multiple-award contract was totally set-aside for a small business then a contracting officer may set aside orders under the contract for any of the small business socioeconomic programs (i.e., 8(a), WOSB, EDWOSB, SDVOSB, & HUBZone small business) provided the “rule of two” and socioeconomic program requirements are met. It also revises FAR Subpart 19.8 to specify that the SBA designates businesses as 8(a) participants in the Dynamic Small Business Search (DSBS) at https://web.sba.gov/pro-net/search/dsp_dsbs.cfm, that this designation appears in the System for Award Management (SAM), and that for 8(a) contracts exceeding 5 years, including options, contracting officers are required to verify in DSBS or SAM that the business is an SBA-certified 8(a) participant no more than 120 days prior to the end of the fifth year of the contract. If the business is not an SBA-certified 8(a) participant at that time, contracting officers must not exercise the option.