Representation by the offeror
Offerors must accurately and in good faith represent their small business status in writing at the time of initial offer, with strict SBA oversight and significant penalties for misrepresentation.
Overview
FAR 19.301-1 outlines the requirements for offerors to represent their small business status when bidding on federal contracts. Offerors must certify in good faith that they meet the applicable small business size standard for the NAICS code(s) identified in the solicitation, including for multiple-award contracts with multiple NAICS codes. Joint ventures must also meet specific SBA requirements to qualify as small businesses. Representations must be made in writing at the time of initial offer, including for basic ordering agreements and blanket purchase agreements. The regulation clarifies that a business's small status at the time of initial offer generally applies to subsequent orders, but rerepresentation may be required under certain circumstances. The contracting officer must accept the offeror's representation unless challenged or questioned, in which case the SBA will make a binding determination. Misrepresentation of small business status can result in significant penalties under SBA regulations.
Key Rules
- Small Business Representation
- Offerors must certify they meet the size standard for the solicitation's NAICS code(s) and have not been found otherwise by the SBA.
- Joint Venture Eligibility
- Joint ventures must comply with SBA rules and all parties (or the protégé in a mentor-protégé JV) must qualify as small.
- Written Representation Requirement
- Size and socioeconomic status must be represented in writing at the time of initial offer, including for BOAs and BPAs.
- Order Eligibility
- Offerors must be small at the time of order award for BOAs/BPAs and at initial offer for HUBZone awards.
- Multiple-Award Contracts
- Small status at initial offer applies to all orders under the contract or relevant portion/category.
- Challenge and SBA Determination
- Representations are accepted unless challenged; SBA decisions are binding.
- Penalties for Misrepresentation
- SBA or the agency may impose penalties for misrepresentation, per specific CFR sections.
Responsibilities
- Contracting Officers: Must obtain and accept written representations unless challenged, refer disputes to SBA, and enforce SBA determinations.
- Contractors: Must accurately represent size and status in good faith, comply with SBA rules for joint ventures, and maintain eligibility throughout the process.
- Agencies: May initiate action if SBA declines to penalize misrepresentation; must follow SBA and FAR procedures for challenges.
Practical Implications
- Ensures only eligible small businesses receive set-aside awards and related benefits.
- Contractors must be diligent in understanding and certifying their size status, especially for joint ventures and multiple-award contracts.
- Misrepresentation can lead to severe penalties, including loss of contract and legal consequences.