Annual Recertification Unlikely A proposal to require GSA schedule contractors to recertify their small-business status every year appears to have sunk under the weight of widespread opposition from inside and outside the government. The Small Business Administration proposed in April that contractors on GSA schedules or other multiple-award contracts recertify annually that they still qualify as small under SBA size standards. A wide range of government agencies and businesses denounced the proposal in public comments, and it has not been heard from since. David Drabkin, GSA’s senior procurement official, said SBA “can’t get to a final rule…because there’s a lot of discussion about what the right answer is.” He added that he doesn’t think recertification every year or every two years is the right answer. At the Coalition for Government Procurement’s Oct. 29 conference in Arlington, VA, he said GSA and SBA hope to come up with a final rule next year. GSA has already ordered schedule contractors to recertify every five years, when contract options are exercised. Under the old rule, a company that was small when it received a schedule contract could continue to claim small-business status on options lasting up to 20 years. The General Accounting Office reported in May that the recertification loopholes allowed thousands of companies to claim small-business status after they had outgrown size standards or had been acquired by a large business. The investigators found that more than one out of 10 companies receiving contracts as a small business also received other contracts on which they were classified as large. (SAA, 5/16) As a result, GAO said, the government is overstating its awards to small firms to an unknown extent. SBA says it now requires companies that register on its PRO-Net database of small firms to update their listings every year and to certify that they still meet small-business size standards. In addition, a company is required to certify whether it is large or small every time it bids on a new contract. Small-business certification allows companies to receive set-aside contracts and allows agencies to count those awards toward their small-business goals. GSA launched a new record-keeping system this fall, upgrading its Federal Procurement Data System to provide more accurate information about awards to small firms and those in other socioeconomic categories. FPDS reported that small businesses received 22.8% of prime contract dollars in 2002, but GAO’s lead investigator said the figures were “not right.” The drive for annual recertification was led by Angela Styles when she was OMB’s procurement policy chief. Styles said her goal was to expand the government’s small-business supplier base and provide “more opportunities to real small businesses.” (SAA, 5/2) Since Styles left the administration in September, opponents of the rule seem to have the upper hand. Businesses that oppose annual recertification argued that it would penalize firms for growing. Federal agencies opposing the rule, including the Defense Department, said annual recertification would hamper their acquisition planning because they could not know from year to year which of their suppliers would be classified as small. SBA is proposing no change in regulations that allow a small firm to be awarded options on an individual contract (outside GSA schedules and GWACs) without recertifying its eligibility under size standards. A company that no longer qualified as small would not be kicked off a GSA schedule or GWAC, but buyers would not get small-business credit for purchases from that company.