By: Hopewell Darneille
Happy New Year! The start of a new year is the time for New Year’s Resolutions. Here are several we strongly urge you to follow-through on early in 2019.
1. Reassess Your (and Any Subcontractors’) Small Business Size Status: Most companies operate on a calendar year for tax reporting purposes. For such companies the start of a new tax year, and the end of the prior year, means a change and forward adjustment of what has been the three-year period used to calculate the company’s average annual receipts (AAR) for size determination purposes. (See our prior blog article on this topic here). Thus, effective January 1, 2019, companies that have been calculating their size based upon 2015-17 receipts are required, for the first time, to start using 2016-2018 receipts. Obviously, and depending upon the company’s receipts last year (tax year 2018) vs. 2015, this change could alter a company’s size status eligibility. In addition, late last year President Trump signed into law the Small Business Runway Extension Act (Pub. L. No. 115-324), changing the former three-year period to five years. SBA is taking the position that this change is not presently effective, and must await changes to SBA’s size regulations, which SBA says it is drafting. The historical three-year AAR period therefore remains in effect for now. However, this will change in the coming months – possibly quickly if SBA issues an Interim Rule implementing the change effective immediately upon issuance of such Interim Rule. This change will mean that companies will need to consider 2014-2018 receipts, which obviously could further change a company’s size status. A size status review thus is particularly important this year, and should consider the company’s size under both standards and the implications of any differences vis-à-vis any contemplated bids and proposals. This is necessary to ensure that future size certifications are correct when made, and consider the implications of these changes – both present and pending – on the company’s size eligibility. Companies for whom the changed time period will make a difference will need to carefully re-check the status of SBA’s rulemaking before making any new size certifications. Please note that this review needs to consider each individual NAICS Code under which your company is listed or considering bidding. While especially important for small businesses, a size status review also is important for large businesses with respect to any current or proposed small business teaming partners or subcontractors.
2. Review and Update Your SAM Listing: Once you have completed your size status reassessment, you need to review and update your listings on the Government’s System for Acquisition Management (SAM), at www.SAM.gov. This is necessary both (1) to ensure the current accuracy of the listed information, and (2) if you are a small business, to maintain and continue your company’s small business status. Please remember that information on SAM is deemed to be a representation and certification by you as to the current accuracy of the posted information, and is required to be updated whenever there is a material change in any of the reported information, including your company’s size status. Both the company and you individually can be held liable for any inaccurate information. Moreover, at least annual updating is required, or a small business will lose and be unable to claim small business size status until updated. As discussed previously here, effective October 1, 2018, all offerors, including joint ventures, are now required to be registered in SAM at the time of initial offer submission.
3. Review and Update Your Dynamic Small Business Search (DSBS) Listing: The start of a new year is also a good time, if you are a small business, to review, and update as necessary, your company’s listing in SBA’s DSBS, as well as the listings of any joint ventures to which your company is a member. This is a primary source for government agencies, and you need to ensure that your listings are accurate, up-to-date and fully reflect any new information that might help you get new work. In addition to ensuring accuracy as to your current address, phone numbers, and size and any socioeconomic status representations, be sure to update the listings to include any new performance history, and new professional and industry certifications, and make sure that your keywords are comprehensive, so as to make it easy for contracting specialists to find you. You might also want to check the listings of your key competitors to see how your listings stack up, and whether other changes might enhance your competitive status.
4. Review and Ensure the Accuracy and Currency of Your Past Performance Information: The start of a new year also is a good time to review the accuracy and currency of your past performance information in the Contractor Performance Assessment Reporting System (CPARS), Past Performance Information Retrieval System (PPIRS) and elsewhere, so that you can initiate efforts to correct and update this information, if needed, in advance of future procurements where such information might be key to your competitive standing and award eligibility. Once a procurement comes down to the critical evaluation and award stages, it is usually too late to impact performance ratings. This is particularly true as to missing past performance evaluations, which take time to be prepared and go through the comment and review process. If you have performed well under one or more contracts during contract performance years that ended in the past year, you should ensure that CPARS evaluations have been performed and entered, documenting your good performance, so that you can claim, and agencies can give you, credit in any new procurement. Acting now also will ensure that you have an opportunity to reply to and explain any negative comments.
5. Update Your Employment Policies, Handbooks, Postings and Subcontract Flow-Downs: It is also good at the start of each year to review and update your ethics and compliance programs, as well as your employment policies, handbooks, postings and subcontract flow-down clauses. While the past year was slow in terms of new Executive Orders and implementing Department of Labor and FAR regulations, there still have been some important changes, including the consolidation of Service-Disabled Veteran-Owned Small Business (SDVOSB) qualification and verification under the auspices of the Small Business Administration (SBA), implementation of GAO’s new Electronic Protest Docketing System (EPDS) and $350 bid protest filing fee, starting May 1, 2018 (discussed here), increased emphasis on Cybersecurity safeguarding and reporting, and the increased $10.60 minimum wage effective January 1, 2019 (discussed here), just to name a few.
There certainly are many other good resolutions you should consider, including keeping current on new developments. 2019 is going to be very busy, as Congress and the President resolve the current partial Government shut-down, SBA moves forward with proposed changes to the HUBZONE and small business programs, GSA moves forward with its proposed unification of the Federal Supply Schedules, and the FAR Council and various agencies move forward with the various not yet implemented changes mandated in the National Defense Authorization Acts over the past couple of years. However, taking the five actions listed above will position you well to move forward and succeed in 2019.
Hopewell Darneille is responsible for the contents of this Article.
© Jackson Kelly PLLC 2019