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On December 8, 2005, the United States Court of Federal Claims issued its decision in LB&B Associates v. United States, 68 Fed. Cl. 765 (2005), making it clear that the Air Force was entitled to require a subcontractor to recertify its size when certain conditions were met.  In May 2006, the Air Force issued written guidance clarifying its understanding of the implications of the LB&B decision.

Judge Nancy Firestone concluded in LB&B that the Air Force had the authority to require a subcontractor to recertify its size as of the offer date specified in a solicitation for a small business set-aside task order, even though the firm had qualified as a small business when it was among firms selected for the underlying indefinite delivery, indefinite quantity (“ID/IQ”) contract in 2001.  Judge Firestone held that “the [Federal Acquisition Regulation] provides tremendous discretion to contracting officers in administering ID/IQ contracts ….”  

Because the small business community had expressed concern over the uncertain implications of LB&B, the Air Force recently issued a Guidance Memorandum.  In the memorandum, two senior acquisitions officials emphasized that the “ruling should not be interpreted as precedence requiring recertification prior to awarding a delivery order, task order, or the exercise of an option . . . .  This case stands only for the proposition that under appropriate circumstances, the Contracting Officer retains the discretion to request re-certification before the award of a delivery order, task order, or the exercise of an option.” 

However, the Guidance Memorandum notwithstanding, the fact remains that a business that had qualified as a small business for the award of an FSS contract may be required by the procuring agency to re-certify its status when it seeks award of a task or delivery order under that contract. 

This update is published by Venable LLP. Venable publications are not intended to provide legal advice or opinion. Such advice may only be given when related to specific fact situations. © Copyright by Venable LLP 2006.