Small Business Wins in the House's FY2022 National Defense Authorization Act Amendments

On September 23, the House passed H.R. 4350, the FY2022 National Defense Authorization Act (NDAA). Accompanying the 1,362 pages of legislation were  476 amendments offered by lawmakers. Included in the amendments were several wins for MSGI clients: HUBZone Contractors National Council, GovEvolve, and Montgomery County Chamber of Commerce (MCCC). These amendments are huge win for the small business community and are the result of months of advocacy. 

• Floor #352 - Transfers decisions for HUBZones to OHA. 
• Floor #314 – Clarifies that the HUBZone price preference applies to task orders. 
• Floor #365 – Raises sole source thresholds for all socioeconomic programs from $4/$7.5 to $8/$10 million (does not eliminate option years, this is total over the life of the contract). 
• Floor #26– Raises small business contracting goals. 
• Floor #186 – Creates category management exemptions for tier 0 contracts. 
• Floor #412 –Requires a company to update their small business status in SAM/notify KO’s if status changes within 2 days. 
• Floor #149–Adds cyber counseling capability to SBDCs. 
• Floor #337 – Requires DoD Report impact of CMMC on small businesses. 

Considering the ongoing hardships resulting from the COVID-19 pandemic, adoption of these changes would assist small businesses seeking to succeed in the federal marketplace. In October, MSGI pushed for these amendments to be included in the Senate’s version of the FY2022 NDAA by writing a letter to Senate Small Business Committee Chair, Ben Cardin of Maryland and Ranking Member, Rand Paul of Kentucky. The letter was supported by MSGI clients listed above, as well as the Women Veterans Business Coalition (WVBC), the Small and Emerging Contractors Advisory Forum (SECAF), the Women Construction Owners and Executives (WCOE), and hundreds of independent small businesses across the country. 

Read the Small Business Amendments Support Letter here. 

Access a detailed list of small business amendments in the House FY2022 NDAA here. 

HUBZone Contractors National Council - Cyber Maturity Model Certification (CMMC)

Madison Services Group, on behalf of the HUBZone Contractors National Council, is pleased to announce a huge win for small business contractors, the result of months of advocacy. The Department of Defense (DoD) has released the “Cybersecurity Maturity Model Certification (CMMC) 2.0” – the updated version of the Department’s effort to enhance cybersecurity practices of its federal contractors. Many of the changes made by the DoD come as a result of the Council’s efforts over the past two years to highlight challenges/propose solutions to increase compliance and affordability for small contractors.

Michael Dunbar, President of Ryzhka International, testified on behalf of the Council in a June hearing on CMMC implementation and what it means for small businesses. He highlighted the need for cost transparency, streamlined standards and establishing clear communication on CMMC efforts, amongst others. In response to the hearing, the Small Business Committee Members introduced a bipartisan amendment that was included in the House-passed FY2022 House National Defense Authorization Act (NDAA) that exempts contracts awarded to small businesses classified as tier 0 from category management or successor strategies for contract consolidation.

• Floor #337 – Requires DoD Report impact of CMMC on small businesses. Requires DoD to submit a report on the impact of the Cybersecurity Maturity Model Certification (CMMC) on small businesses within 120 days. The report must include estimated cost burden for each CMMC level, anticipated decrease in number of small businesses as a result of CMMC and how the DoD plans to mitigate the negative effects to small businesses resulting from CMMC. [Reps Phillips (D-MN), Van Duyne (R-TX)] 

Our efforts in elevating the voice of defense industrial base resulted in changes in CMMC 2.0, specifically laid out by DoD to “reduce the burden for small businesses by: streamlining requirements at all levels, eliminating CMMC-unique practices and maturity processes; allowing companies associated with the new Level 1 (Foundational) and some Level 2 (Advanced) acquisition programs that do not involve information critical to national security to perform self-assessments rather than third-party assessments; and providing additional flexibility through the allowance of plan of actions and milestones (POA&Ms) and a waiver process.”

Thank you to all of our members and strategic partners that have added their voice to our efforts, and we look forward to continuing this important policy work through our new Secure Supply Chain Consortium.

Congressional Action in Fall 2021 - What You Need to Know

What's completed: 

Budget Resolution – House and Senate passed. This is the blueprint for the fiscal year and Presidential signature is not required. Important action: Set spending targets for appropriators to do their work.  Required authorizing Committees to report suggested program changes by September 15. 

What’s half completed: 

Infrastructure – Passed by Senate by a wide margin. Needs House action. 

FY22 Appropriations – House has completed 9 of 12 of the bills. Senate has passed 0. A likely scenario is that spending bills will be combined into groups (called minibuses) or one gigantic bill known as the Omnibus appropriations bill. 

What’s not completed: 

Budget Reconciliation– A special bill which can be used once a year to overcome filibusters and requires only a majority vote. It is limited to spending and tax provisions rather than policy only. This bill is the one to watch. Look for many program and tax changes, reflecting the Democratic majority’s priorities. 

Raising the Debt Ceiling- Secretary Yellen warned Congress that the debt ceiling needs be raised in October. Delays have negative consequences for the economy, including consumer confidence. Failure to raise it can result in a default on US fiscal obligations. See her letter to Speaker Pelosi here.

Continuing Resolution- Since appropriations for FY22 are unlikely to be completed by the beginning of the fiscal year (October 1), a continuing resolution must be passed to keep the government operating until the 12 appropriations bills are passed and sent to the President. If a continuing resolution is not passed by October 1, expect a government shutdown. 

National Defense Authorization Act (NDAA) – This annual “must pass” bill determines defense spending for the Fiscal Year. It contains new initiatives, changes in programs and direction for the distribution of funding. The House and Senate will consider this bill when returning to Congress in September. 

How to Follow These Actions 

Federal contracts and grants depend on appropriations levels and program changes that Congress. The timetable for grants are also affected by delays in funding. And, on a personal note, the stock market is responsive to Congressional actions. If you are a client of Madison Services Group, we send out a daily communication, Today in Washington, that follows major bills like those listed above. In addition, you should familiarize yourself with Congressional websites such as appropriations.house.gov, and Congress.gov. Knowledge is power. Get ahead of your competition by tracking Congress and the programs that provide revenue to your business. 

COVID-19 Fatigue – What About All the Other Issues

By Ann Sullivan

WIPP Works in Washington June 2020

The newness of COVID-19 has worn off and, although little attention has been paid to other issues Congress must address, they haven’t gone away. Although congressional staff and Members are working remotely, business is still being conducted. I would be remiss if I did not mention the potential for social justice reform, due to protests over the weekend. However, there has been no federal action as of this writing. Here’s what to expect:

Funding the Government for FY21.The government calendar for funding has not changed. The fiscal year still ends on September 30 and Congress must pass appropriations legislation to continue to fund the government. Although the schedule has been pushed back due to the pandemic, House leadership says it plans to pass all of its appropriations bills by August. As usual, the Senate schedule is less ambitious, but the Senate Appropriations Committee plans to start deliberations in late June. 

Authorizing Defense Department Programs. The National Defense Authorization Act (NDAA) guides every defense program and sets priorities for the following fiscal year. It doesn’t fund the programs—it leaves that to the appropriators but authorizes and recommends the funding levels. Often Included in this bill are changes to small business contracting programs that are deemed important to the defense supplier base. The Senate Armed Services Committee expects to have completed its bill by the end of June/early July. The House Armed Services Committee schedule follows roughly the same timeline.

Infrastructure Funding. In addition to roads, trains and ships, water infrastructure is also on the list to fund and authorize. Although it was initially thought to be a massive recovery initiative, it now appears the Congress may tackle this piece by piece. Either way, a number of the programs expire unless Congress takes action by September 30. 

Tax Extenders. Tax deductions and credits have expiration dates. Unless Congress extends them, they expire. Action is necessary to keep them intact and the list of expiring tax cuts since 2018 is pretty long. The Joint Tax Committee publishes the list here.

Although COVID-19 related actions will continue to be front and center for the Congress, it cannot neglect its other duties. Let’s not forget that there is an election coming in November which includes the entire House of Representatives, 1/3 of the Senate and the Presidency. The Congress, adapting to the ban of large group gatherings, will spend a significant amount of time campaigning for the November elections. In the end, the government still needs to be funded, the need for a strong defense and services taxpayers expect from their government do not go away in a pandemic. Despite the public disheartening partisan rhetoric, the Congress will quietly work together to get things done.  

Four Steps Congress Should Take to Help WOSBs in the FY2021 NDAA

By Elizabeth Sullivan

If you listen to our advocacy team’s monthly updates, you will likely hear us reference the National Defense Authorization Act, or more lovingly known as the “NDAA.” As it remains one of the last “must pass” bills – due to the Constitutional requirement that Congress provides for a common defense – each year presents an opportunity to advocate for changes that will benefit women-owned businesses. So, here is what we think should be included this year: 

1.     Expand investment in women- and minority-owned companies. Currently, women-owned businesses receive around 2.8% of all venture dollars. Due to WIPP’s championship of this issue, Senators Marco Rubio (R-FL) and Maria Cantwell (D-WA) introduced the Women and Minority Equity Investment Act of 2019 (S. 1981), which would allow women-owned contracting firms to take investment by women-owned equity firms and still meet the “51% unconditionally owned and controlled” standard set by SBA to participate in the WOSB/EDWOSB program. Representative Robin Kelly (D-IL) introduced an identical bill in the House (H.R. 3633). The same barriers apply to minority-owned businesses. These bills allow minority-owned federal contracting firms to take investment by minority-owned equity firms.This legislation is groundbreaking on both sides of the equation. It opens up a path for investment in women-owned businesses who are government contractors, as well as strengthens women investors. Women in investment firms tell us that this change in the law would strengthen their ability to secure greater equity positions within their companies and women-owned companies looking for investment will be incentivized to seek out women-owned investment firms. The same holds true for minority investments under this legislation. 

2.     Increase the share of contracts awarded to small businesses. WIPP fought and won sole source authority for the WOSB program in 2015—gaining parity with other federal contracting programs. While the fight has changed in 2019, the drumbeat is the same: parity. Currently, the sole source dollar limits for WOSBs are $4 million and $6.5 million (manufacturing) over the life of the contract. While this might sound like a lot of money, in the $550 billion federal marketplace, $4 million over 5 years is small potatoes. We have also heard from WOSBs that even though agencies are interested in awarding sole source contracts to them, these dollar limits are too small.

A shift in government buying calls for a shift in rules for sole source contracts. As government buying continues to trend toward buying through large vehicles and moving away from direct contracts, the ability for small companies to win sole source awards is more crucial than ever. Increasing the award amounts for sole source contracts is extremely beneficial to the small business contracting community, however, it is equally as important to streamline and simplify rules for awarding these contracts. It is not uncommon to hear from small contractors that are told over and over again by the federal workforce the same thing – awarding a sole source contract is too confusing and/or time consuming. 

WIPP supported H.R. 190, which passed the House and gives all small businesses including WOSBs greater opportunities through sole source contracting. This bill raises the dollar amounts for sole source contracts to $4 million and $7 million to be awarded each year, instead of over the life of the contract. A proposal in the Senate would also raise these thresholds to $8 and $10 million each year. 

With respect to simplification, WOSBs, HUBZones and SDVOSBs require that a contracting officer must justify through market research that not two or more offers at a reasonable price are expected. The contracting community has interpreted this as “you are the only company in the world that performs this work,” leading to exceedingly few sole source awards. While the missions of these programs are all different, one thing is crystal clear – putting these contracting programs on equal footing with respect to this rule would ease the burden for the federal government and the businesses trying to meet its agencies missions.

3.     Give Small Businesses More Runway. You may be thinking wait – I have heard this one before. That’s because a significant WIPP-supported legislative victory was achieved in 2018, giving small firms more “runway” to transition out of the small business set aside program and into full and open competition. The law allows businesses to average revenues over 5 years rather than the previous 3 years for purposes of determining size standards. In fact, the law finally went into effect earlier this month. Despite the expanded time this gives many small contractors, there are some that are still left in the lurch – businesses whose work falls under employee-based NAICS.

These companies face the same challenges – bumping out of their size standards and struggling to compete with billion-dollar companies in the full and open marketplace. Therefore, increasing the length of determination for industries measured based on annual average employees would give small companies a little more runway to succeed when they become midsize companies. Using a five-year standard for all industries this would create parity for small businesses in every industry and promote sustainable growth of small businesses.

4.     Share Best Practices for Contracting with Small Businesses. WOSBs continue to find that agencies are reluctant to use small business programs. Recognizing this challenge, WIPP worked with the Homeland Security and Governmental Affairs Committee to introduce S. 3038, The Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions (PRICE) Act of 2019, which addresses agency utilization of small businesses in the federal marketplace. Introduced by Senators Gary Peters (D-MI) and Joni Ernst (R-IA), this bipartisan bill requires the Director of the Office of Management and Budget (OMB) to convene the existing Chief Acquisition Officers Council (CAOC) to identify and disseminate best practices in non-defense small business contracting in the federal government. The PRICE Act would positively impact the way in which this valuable information is gathered and shared across the federal government, as well as provide increased opportunities for small businesses by educating the acquisition workforce on best practices for using small business programs. 

As we promote these changes, look for action alerts and other ways to engage from our team. Since it is an election year, there will be limited opportunity to advance this legislation – all the more reason why the NDAA is so important. These four changes would go a long way to help the government meet its 5% goal of contract awards to women-owned companies. 

New Year’s Resolutions from WIPP’s Advocacy Team

By Elizabeth Sullivan

It has been two weeks since New Year's Day and you’re not alone if you have you broken most or all of your New Year's resolutions. While we put our personal resolutions aside, when it comes to advocacy, our team has made some we are committed to keeping.  

1.     Untangle the web of new federal cybersecurity requirements for WOSBs. 

2020 is shaping up to be the year of securing the federal supply chain. This may sound dry or mundane, but recent changes truly impact every federal contractor of every size. While we did a deeper dive last year, let me provide some context. Our work does not stop when a bill becomes a law. In fact, the devil is in the details, so providing input during the regulatory process is just as important as the passage of the law (a refresher on the regulatory process can be found here). In addition, remember that a proposed or new regulation is called a “rule.” Major agency actions – all regulatory – require our attention. 

·       Cybersecurity Maturity Model Certification (CMMC) – The final version of this requirement should be published later this month. The CMMC is expected to designate maturity levels ranging from “Basic Cybersecurity Hygiene” to “Advanced.”  While contractors will be required to be certified by an accrediting body, it has not yet been determined. This body is expected to enter into an MOU with the DoD sometime this month. The government has indicated that contractors will be reimbursed for the certification fee through their pricing on contracts to the federal government. However, the current cost is remains unclear. CMMC will eventually be required for anyone doing business with DoD – the certification levels will begin to be included in RFIs starting in June and RFPs sometime in the fall. One important point made by Katie Arrington, DoD’s Chief Information Security Officer for Acquisition and Sustainment, was to never post your CMMC level certification on your website, as hackers will then know the types of security you are employing and target accordingly. Although there are still some factors to be determined, this certification is moving full steam ahead – and compliance strategies will be an important exercise for every federal contractor in 2020.

·       Section 889: Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment– Commonly referred to as “Section 889,” this rule seems like it would have nothing to do with small businesses or most contractors, however, it does. It broadly prohibits federal agencies from using telecommunications or surveillance equipment or services from six Chinese companies or their subsidiaries. Ann took a closer look at the rule here. In step two of implementation, a rule is expected to go into effect sometime this year that prohibits any government contractor from using any components or services from these companies. If you are renewing your SAM profile, you will notice a new question asking if you provide covered telecommunications equipment or services in the performance of any contract or subcontract. This action impacts the entire supply chain, covering all contracts. 

Additionally, WIPP members have aired their frustrations for years on the government’s security clearance processes, both in civilian agencies and at DoD. This “chicken and egg” issue continues to hamper WOSBs and other small contractors from reaching their full potential. We hear you and are working to create policy solutions on these issues.

2.     Urge the Senate to pass the SBA Reauthorization bill. 

WIPP has been working closely with the Senate Committee on Small Business and Entrepreneurship to make necessary changes to programs benefitting entrepreneurs through the Small Business Administration (SBA). The Chairman’s draft contains fifteen changes that, if passed, will be game-changers for women business owners. This includes positive sole source changes for federal contractors and increasing the ability for WOSBs to access capital. Unfortunately, the Committee postponed action on a comprehensive reauthorization bill after failing to agree on proposed regulatory changes contained in the draft legislation. Despite this setback, you should still contact your Senators, urging action. We even have a letter you can easily download and send here. This bill has enormous implications for small and midsize businesses around the country – we’ll be keeping up the drumbeat. One detail to know about this effort is that while it is a new year, it is not a new Congress. The 116^th Congress is in its second session, which means that bills introduced in 2019 are still active in 2020. 

3.     Celebrate and build upon our FY2020 NDAA wins. 

The National Defense Authorization Act (NDAA) is a must-pass bill by Congress – authorizing all of the DoD programs on an annual basis. The 2020 NDAA, passed in December 2019, contained three WIPP supported provisions that positively impact WOSBs. The first is the prompt payment for small business prime contractors and subsequently their subcontractors. WIPP has supported permanently establishing an accelerated payment date since the Office of Management and Budget (OMB) directive expired in 2017, and this provision establishes a goal of 15 days after proper invoice. The second is uncovering small business participation on multiple award contracts that are designated as best-in-class vehicles. As the spend through these vehicles increases, it is critical to have data on WOSB participation. Therefore, the provision requires the SBA to report the dollar amount of contracts awarded to small businesses. WIPP’s third win was to strengthen accountability for subcontractors. The provision implements a new dispute process allowing small subcontractors to bring nonpayment issues to the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU), as well as strengthen the agency’s ability to collect and review data regarding prime contractors' achievement of their subcontracting plans.

4.     Support Congressional women. 

As we all know, it is a Presidential election year. However, the entire House of Representatives and a third of the seats in the Senate are also up for grabs. Electing women to Congress is important, no matter your party affiliation. Currently, 127 women serve in the U.S. Congress – 26 in the Senate and 101 in the House. The women in the Senate have long been a model for avoiding legislative gridlock. They are often the negotiators who are willing to reach across the aisle to find common ground on major pieces of legislation. Women Members are also the cosponsors on legislation important to women entrepreneurs. For example, our bill to increase investment in women-owned federal contractors, The Women and Minority Equity Investment Act of 2019, is championed in the Senate by Senator Maria Cantwell (D-WA) with Chair Marco Rubio (R-FL) and in the House by Representative Robin Kelly (D-IL). 

It is also important to note that the Senate just confirmed a new Administrator to the Small Business Administration, current U.S. Treasurer Jovita Carranza. We are thrilled to work with her again, as she was formerly an SBA Deputy Administrator and championed issues important to women-owned businesses during her tenure. No doubt, other policy priorities will arise as the year moves forward. Although there are many political pressures that threaten to derail our efforts, we remain committed to the bipartisan mission of empowering women entrepreneurs. From the policy team for Women Impacting Public Policy, Happy New Year. Let’s get to work.

SBA Releases a Flurry of Regulations For Small Government Contractors

By: Ann Sullivan

If you’ve read any of my blogs on regulations, you know that regulations are published on Regulations.gov.  You also know that there is a process to take a proposed regulation all the way to the final release.  In case you missed it, regulations are called “rules” in government speak.  

In the past several months, SBA has taken significant actions on contracting policy that affect small government contractors.  They are in various stages—some proposed rules, some finalized.  Since this has been difficult to keep track of, below is a summary and status of the actions federal contractors should be following.  Most of our summaries have been prepared by the law firm PilieroMazza because we couldn’t have said it better.

1.   SBA Adopts a Five-Year Calculation Instead of the Current Three-Year Size Calculation for Revenue Based Size Standards. Effective January 6, 2020. Final Rule.

·     This regulation implements a change in the law through legislation known as the Small Business Runway Extension Act passed in 2018.

2.   Changes to the HUBZone Program. Effective December 26, 2019. Final Rule.

Key changes to the HUBZone Program include:

·     An individual will continue to be treated as a HUBZone resident if that individual worked for the firm and resided in a HUBZone at the time the concern was certified or recertified as a HUBZone—even if the area where the individual lives no longer qualifies as a HUBZone or the individual has moved to a non-HUBZone area; HUBZone firms will only be required to certify on an annual basis, meaning such concerns will no longer be required to expressly qualify as a HUBZone at the time of each offer for a HUBZone contract and award; for compliance purposes, HUBZone firms must maintain at least 20% HUBZone residents as employees when performing on HUBZone contracts, or SBA will propose the firm for decertification. 

·     HUBZone firms have an affirmative duty to notify SBA if they fall below the 20% attempt to maintain the standard; when a company buys an office located in a HUBZone or enters into a long-term, 10-year lease for such office space, intending the space to be its principal office, the concern will be able to meet the principal office HUBZone criterion for a period of at least 10 years—even if at some point after the property is purchased or leased, the office location no longer qualifies as a HUBZone.  The idea behind this rule is that the HUBZone program should incentivize and reward companies that invest in HUBZones.

3.   Implementation of Changes Contained in FY2016 and FY2017 NDAA and the RISE Act. Effective December 30, 2019. Final Rule.

Subcontracting Plans

·     Consistent with the 2017 NDAA, the Rule provides that it will be a material breach of contract when a contractor or subcontractor fails to comply in good faith with its subcontracting plan requirements, including failing to provide reports and/or cooperate in studies or surveys to determine the extent of compliance.  The Rule provides a number of examples of what constitutes a failure to make “good faith” efforts, including, among others, (1) failing to timely submit subcontracting reports and (2) failing to pay small business subcontractors in accordance with the terms of the contract.  According to SBA, the examples set forth in the Rule are not intended to be inclusive and factors beyond those identified in the Rule may be considered in determining whether good faith efforts were made. The Rule also provides that failure to make a good-faith effort may be considered in any past performance evaluation of the contractor.

·     With respect to subcontracting plans, the Rule also requires other than small prime contractors with commercial subcontracting plans to include indirect costs in their subcontracting goals.

Small Business Contracting in Disaster Areas

·     As provided in the RISE Act, SBA is establishing contracting preferences for small business concerns (“SBC”) located in disaster areas and will provide agencies with double credit for awards to such concerns.  SBA will use the existing Federal Acquisition Regulation definitions to provide that an agency will receive credit for an “emergency response contract” awarded to a “local firm” that qualifies as an SBC under the applicable size standard for a “major disaster or emergency area.”  

·     According to the Rule, a concern is “located in a disaster area,” if, during the last twelve months, it had its main operating office in the area and that office generated at least half of the firm’s gross revenues and employed at least half of the firm’s permanent employees.  The Rule provides a number of factors that SBA will consider if the firm does not meet the foregoing criteria in order to determine whether the firm resides or primarily does business in a disaster area.

NMR Size Standard Does Not Apply to ITVAR Procurements

·    The Rule amends the NMR to expressly state that a firm may qualify as an SBC to provide manufactured products or other supply items as a nonmanufacturer if, among other things, it does not exceed 500 employees “(or 150 employees for the Information Technology Value Added Reseller exception to NAICS Code 541519, which is found at § 121.201, footnote 18)”.  According to SBA, because contractors under the ITVAR exception are non-manufacturers, it would make no sense for SBA to retain a 150-employee size standard if concerns could also qualify under the NMR 500-employee size standard.

Allowing a Set-Aside Within a Set-Aside

·     The Rule provides contracting officers the authority to set aside orders for a socio-economic small business program (e.g., 8(a), HUBZone, SDVO, WOSB) under a multiple award contract (“MAC”) awarded as a generic small business set-aside.  This is significant because although SBA has considered implementing such a rule in the past, it has chosen not to, in part because it was concerned that such a rule would unfairly deprive SBCs of an opportunity to compete for orders issued under their MACs. 

4.   Mentor/Protégé, Joint Ventures and 8(a) Changes. Proposed rule. Status: Public comment period ends January 17, 2020.

Mentor-Protégé Programs

The proposed rule would:

·     Merge the 8(a) Mentor-Protégé Program into the All Small Mentor-Protégé Program; clarify eligibility criteria for proposed mentors and request comments on whether mentors should be restricted to mid-sized firms; provide flexibility for mentors with protégés with principle places of business in Puerto Rico; provide relief from the two mentors over the life of a protégé rule; and; provide generally that protégés should be performing work under the North American Industry Classification System (NAICS) code used to qualify for the program.

Joint Ventures

The proposed rule would:

·     Eliminate joint venture approval requirements for competitive 8(a) contracts, but not sole source awards; eliminate the “three in two” rule; disallow substitution of joint venture partners who exceed the size standard for long-term contracts prior to recertification; and allow joint ventures to be populated with FSOs and provide guidance to agencies on when to allow joint ventures to bid on contracts requiring a clearance.

Multiple-Award Contracts (MAC)

The proposed rule would:

·     Require contracting officers to assign the most appropriate single NAICS code to each order under an MAC, whether for a supply or a service to ensure compliance with the non-manufacturer rule, requiring that each NAICS code be included in the underlying MAC; require an offeror to certify as to size and status in order to qualify at the time it submits its initial offer including price for an order under an UNRESTRICTED MAC, except for orders or BPAs issued under an FSS contract; require that, where the socio-economic status is first required at the order level, firms must qualify at that time; and permit size and status protests where the underlying MAC was unrestricted, except for BPAs and orders issued under an FSS schedule.

Certification

Self certification

·     The proposed rule would allow a prime to rely on the self-certification of its subcontractor, provided the prime does not have a reason to doubt the certification.

          Recertification

·     The proposed rule would clarify that if a party to a joint venture becomes acquired or merges, only that partner (and not the non-affected partner) must recertify in order to qualify the joint venture to recertify; a firm that mergers between proposal submission and award does not qualify for award if it could not or did not recertify, though size protests are permitted; and tribal entities are not required to recertify where ownership changes but the firm is owned to the same extent (i.e. 51%) by the ultimate entity.

8(a) Program

The proposed rule would:

·     Define “follow on contract” for purposes of retaining requirements in the program; loosen the prohibition on immediate family members owning 8(a) firms; allow for certain changes of ownership to occur without prior SBA approval; clarify SBA policy on voluntary withdrawals and early graduations from the program; and under some circumstances, allow firms to seek and obtain a multiple contract waiver from the sole-source restrictions for failure to comply with the business activity targets where certain extenuating circumstances exist that apply to multiple contracts.

Small Business Rules

The proposed rule would:

·     Require that mixed contracts include any combination of services, supplies, or construction though construction was inadvertently omitted from the proposed rule; require that contracting officers consider past performance of first-tier subcontractors for certain bundled or consolidated contracts and for MACs over a certain dollar threshold; clarify that affiliation may be found under the newly organized concern rule where both former and current officers, directors, principal stockholders, managing members, or key employees of one company organize a new company in the same or a related industry; and request comments on how the non-manufacturer rule should be applied to multiple item procurements where one or more of the items are subject to a class waiver.