What is a “Small Business” Under the Army’s $7 Billion Renewable Energy RFP?

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As the October 5, 2012 deadline looms for interested parties to submit proposals in response to the Army’s RFP for Renewable and Alternative Energy there remains a great deal of confusion as to the details of the “small business” eligibility requirements. As interested parties know, this is a vital issue in the context of this RFP. The Army intends to reserve substantial numbers of task orders for small businesses, including through a variation on the “Rule of Two” in the task order process. Large businesses are required to develop not only Small Business Subcontracting Plans, but also Small Business Participation Plans including detailed information documenting their teaming agreements with small businesses. Utilization of small business is one of the enumerated evaluation criteria set forth in the RFP.

Understanding whether your small business or small business teaming partner meets the SBA definition of a “small business” is vital, not only as a matter of eligibility for award, but because of significant new anti-fraud provisions that apply to companies holding themselves out as small businesses. Among other things, these new small business integrity provisions establish that a company that submits an offer in response to a small business set-aside procurement or that represents that it is small on government databases and websites, is making a deemed “certification” that the company is in fact a small business. In addition, by law the presumed loss to the government associated with a mis certification of size status is deemed to be the total value of any small business contract awarded, meaning that damages for violating these provisions could escalate to three times the total value of the contract if a violation of the False Claims Act is established. These new laws apply to both prime and subcontracts. The stakes are undeniably high.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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