Novation question

Steward said:

Here is the question, can company A request the Government to grant 8(a) and Hubzone status to the IDIQ which was originally won as a regular SB?

The question doesn't make sense. An offeror or contractor has a small business status--not a contract.

Apologies, please allow me to try and rephrase.

Agency XYZ competed a multi-award IDIQ, specifically with groupings of awards (Regular Small business, 8(a) pool, Hubzone pool, etc) 

Company A acquired a division of company B which included the novation of an IDIQ award that was awarded in the competition as part of the regular small business pool.  Since company A also holds 8(a) and hubzone socio statuses, may they request the novated IDIQ to be modified to also reflect 8(a) and Hubzone so that company A may compete for those additional requirements being competed on the additional pools?

Note: When the contract was novated, the modification only indicated a name change but not that the contractor certifies and is able to be added to the other "pools."

You can certainly ask to compete in the 8(a) and HUBZone pools.

Right, you can ask.

The previous owner of the contract competed for and won in the small business grouping or pool.  So now that the contract is novated to you (also a small business), you can be considered for task orders for the same grouping or pool.  To me, neither you nor the contract's previous owner competed for or won in the 8(a) or HUBZone groups or pools, so if you asked me, I would lean towards saying NO as a first-blush response.  I might ask you to cite an authority to non-competitively modify your contract and non-competitively place you in the 8(a) and HUBZone pools, and I would fairly consider your response in making my decision.

Greatly appreciate the sanity check.  It felt like an odd rabbit hole to chase, thanks again!

You're welcome.  But don't let me stop you from chasing that rabbit.  Your contracting officer might give a different answer than me.

Steward said:

Apologies, please allow me to try and rephrase.

Agency XYZ competed a multi-award IDIQ, specifically with groupings of awards (Regular Small business, 8(a) pool, Hubzone pool, etc) 

Company A acquired a division of company B which included the novation of an IDIQ award that was awarded in the competition as part of the regular small business pool.  Since company A also holds 8(a) and hubzone socio statuses, may they request the novated IDIQ to be modified to also reflect 8(a) and Hubzone so that company A may compete for those additional requirements being competed on the additional pools?

Note: When the contract was novated, the modification only indicated a name change but not that the contractor certifies and is able to be added to the other "pools."

Have you asked the SBA if Company A with the new division is still considered an 8(a) and a HUBZone?  I say this noting that it is they the SBA that have the authority to certify Company A's status.  Taking on a new division of another company could tip the scale as to status for either program.

You're right, Carl.  Or, if the contracting officer decides to ask for re-certification (either for the contract or for a task order opportunity), the contractor might be out in the cold.  It might be better for the contractor to keep its head down and be happy to compete in the small business lane, without appearing greedy and trying to get into other lanes.

I think there are a couple of similar past incidents where a business was acquired by another company.  The new companies were allowed to compete under the status of the old.  That lasted until the ordering COs asked companies to identify/verify status with their submissions.

Thank you everyone for all of the insights.  Company A even after acquiring the division still holds the socio statuses (8(a) and hubzone).  Was hoping the Contracting Officer would side with increasing competition by allowing additional pool access.

For info, the request was denied by reason of the Government did not plan on adjusting bidder pools.  However, with recertification on the IDIQ coming up next year (IDIQ is a base of 5 years with one 5 year option), I am curious to see if company A is able to certify into the other pools since they will still be both 8(a) and Hubzone.

To the OP,  You will need to speak with the SBA 8(a) and HUBZone offices as both of those organizations have very specific requirements for their programs.  The novation means that the newly formed company has to recertify for the HUBZone program (13 C.F.R. § 126.619(3)) and for the 8(a) program (13 CFR § 121.404(g)(1)). The Contracting Officer may or may not be familiar with those requirements.

Under some GWACS (Like SEWP) the hubzone (or SDVO etc.) pools are run as a separate competition, so a novation will not get you in a pool that wasnt competed for.  While the "new company" may be hubzone, it didnt compete for a hubzone award. Best case is that if awarded, an agency would get the social economic credits. But its hard to see a scenario where the government would grant a contract for something a company didnt compete for.