If you are a prime contractor with a small business subcontracting plan, you may wonder “when” a small business subcontractor should render its size representation, and what are the subcontractor’s obligations to rerepresent its size status, such as after a merger or acquisition. Both the SBA size regulations and the FAR are clear that a subcontractor’s representation of its size status at the time it submits its offer for the subcontract governs the subcontractor’s size status for the subcontract. Thus, subcontractors’ size representations rendered at the time it submits its offer to the prime contract govern their size status for purposes of the prime contractor’s ability to take small business subcontracting credit for subcontracts issued to the subcontractor.
Additionally, neither the SBA size regulations nor the FAR affirmatively require a subcontractor to make a rerepresentation of its size after undergoing a merger or acquisition, even though a merger or acquisition of the prime contractor may otherwise trigger the prime contractor’s obligation to rerepresent its size status to the prime contract’s contracting officer. Absent a term or condition in the underlying subcontract agreement that requires such a rerepresentation, subcontractors are not otherwise required to rerepresent their size status to the prime contractor after undergoing a merger or acquisition. The prime contractor is able to rely on the subcontractor’s small business size representation until another representation of size is required. Additionally, both the SBA size regulations and the FAR limit the liability of a prime contractor that relies in good faith on the small business size representations made by its subcontractor.
If you want to learn more about recertification and when you may need to rerepresent your company’s size or status to the government, consider attending PilieroMazza’s free webinaron August 16, 2017, during which my colleague, Megan Connor, and I will demystify the recertification rules.
About the Author: Katie Flood is counsel with PilieroMazza in the Government Contracts Group. She may be reached at [email protected].