Advancing Small Business Growth

By Ariana Billingsley, SBTDC/PTAC Counselor at East Carolina University

On December 26, 2013, the president signed into law the National Defense Authorization Act for Fiscal Year 2014, also known as FY14 NDAA. The FY14 NDAA includes several significant procurement-related reforms and changes, most of which are included, as usual, in “Title VIII—Acquisition Policy, Acquisition Management, and Related Matters” of the Act. Of particular interest to small business is section 1611 titled “Advancing Small Business Growth”.

Section 1611 mandates the Department of Defense (DoD) to include a clause in each covered contract awarded by DoD. This clause will require the contractor to acknowledge that acceptance of the contract may cause the small business to exceed the applicable small business size standard for the industry concerned and as a result the contractor may no longer qualify as a small business concern for that industry. A “covered” contract within the context of this rule means a contract that was awarded to a qualified small business concern, as defined in section 3(a) of the Small Business Act, with an estimated annual dollar value that will exceed:

  • the small business size standard (if expressed in dollar value) for the North American Industry System (NAICS) code assigned by the contracting officer; or
  • exceed $70,000,000, if the small business standard is expressed in number of employees, for the NAICS code assigned by the contracting officer.

Section 1611 further stipulates that new language shall be added to the DFARS (Defense Federal Acquisition Regulation Supplement) to encourage these companies to develop the capabilities and characteristics typically sought by DoD from contractors that are competitive as other than small businesses.

To this end, small business contractors may seek out the training and counseling services available from the Procurement Technical Assistance Program (PTAP). The PTAP, through its network of over 300 Procurement Technical Assistance Centers located across the United States as well as the territories of Puerto Rico and Guam, offers a wide range of Government contracting assistance. The PTAP is administered by the Defense Logistics Agency and funded through cooperative agreements between DoD and state and local non-profit entities.

To incorporate this guidance, on November 6th 2014, DoD proposed to revise the DFARS by revising 212.301(f) and adding a new section 219.309 to “Solicitation provisions and contract clauses”. Comments on this proposed new clause to DFARS are due to DoD by the beginning of January 2015. After all comments are submitted, DoD will evaluate and issue a final rule and changes to DFARS.

So, what does this all mean to you as a small business concern? You should carefully review clauses included in your solicitation and identify a covered contract. Once you decide on submitting a proposal on that contract you should consider discussing with your local PTAC, if you are not already working with one. Are you ready to compete in a “other than small business” government contracting arena?

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