In one of its first rulings interpreting the Small Business Jobs Act (“the Act”), the Small Business Administration’s (“SBA”) Office of Hearings and Appeals (“OHA”) curtailed the potential reach of the Act’s deemed certification provisions.

On January 28, 2014, in the Size Appeal of TISTA Science and Technology Corporation (“TISTA”) (Docket No. SIZ-2013-11-04-139), OHA ruled that the Act’s deemed certification provisions do not apply to proposals for task orders under FSS contracts. Longstanding SBA regulations allow contracting officers to determine whether or not to require an offeror to certify its size status when submitting proposals for set aside task orders under long-term contracts. However, the 2010 amendments to Section 632 of the Act specified that “submission of a bid or proposal for a Federal…contract…[that is] set aside, or otherwise classified as intended for award to small business concerns” would be deemed “affirmative, willful, and intentional certifications of small business size and status.”

In the TISTA size protest, the awardee was size eligible at the time it received its FSS contract in 2008, but exceeded the size standard at the time it submitted its proposal for a task order award in 2013. At issue in the protest was whether the Act’s deemed certification provisions made the awardee’s 2013 task order proposal a deemed certification of size eligibility.

Citing the Federal Acquisition Regulation (“FAR”) definition of contract that included orders, the protester contended that the Act covered proposals for task orders because the FAR includes “orders” in the definition of “contracts” at FAR § 2.101. OHA disagreed, and ruled that Congress did not intend the Section 632(w)(2) deemed certification rule to cover task orders based on the language of the statute, and the potential conflict with other SBA regulations.

But did Congress intend this outcome? The converse of OHA’s rationale is also true: If Congress intended to exclude task order proposals from the deemed certification rule, it could have easily done so, and it is possible to read the deemed certification provisions in a way that does not conflict with the existing regulations. Congress may need to revisit the language to clarify its intention.

The federal government increasingly uses task orders to contract for goods and services—recent estimates place the volume of such activity between $55-$90 billion per year, and growing. OHA’s interpretation maintains the status quo and allows businesses that have grown to be other than small under a long-term contract to nonetheless compete for task orders set aside for small business without concern that the deemed certification provision might apply to their task order proposals.