Recertification of Size Status

Recertification of size status is the regulatory requirement under 13 CFR 121.404 and FAR 52.219-28 for a small business prime contractor to re-verify and formally certify that it still meets the applicable SBA size standard at defined contract milestones, particularly when a contract has a total length exceeding five years.

What is Recertification of Size Status?

When a small business wins a federal set-aside contract, it certifies its size status as of the date it submits its offer. Size status is not locked permanently at that moment. FAR clause 52.219-28 (Post-Award Small Business Program Rerepresentation) requires recertification in three situations: (1) upon a merger or acquisition affecting the contractor; (2) within 30 days after the contracting officer exercises an option on a contract that has been active for more than five years, including options; or (3) when the contracting officer explicitly requests recertification.

If a contractor recertifies as "other than small" (i.e., it has grown above the applicable size standard), the agency may no longer count the contract toward its small business prime contracting goals going forward. The contractor does not lose the existing contract, the work may continue, but the agency cannot credit subsequent option year spending toward small business goal attainment. For some programs such as the 8(a) program, the consequences of recertifying as other-than-small during an active contract are more significant and program-specific.

Recertification is measured using the same three-year average revenue or 12-month average employee count methodology as initial certification, but the measurement is taken as of the date the recertification is submitted, not as of the original award date. Organic growth, acquisitions, and new affiliations (including subcontracting arrangements that trigger affiliation) can all cause a previously-small firm to exceed its size standard.

Why Recertification Matters for Government Contractors

Growing small businesses face a strategic inflection point when they approach their size standard thresholds. Understanding when recertification is triggered allows firms to plan their growth trajectory and pipeline mix proactively. A firm that knows it will recertify as large on an option exercise can shift its capture strategy toward unrestricted competitions and vehicle-holder positions on large multiple-award contracts, avoiding the gap that often occurs when firms "size out" without a transition plan.

Example

A cybersecurity firm won a five-year SDVOSB set-aside IDIQ in 2020 with revenues of $22M, well below the $34M NAICS 541512 size standard. By 2025, organic growth and two acquisitions have brought the firm's three-year average revenue to $41M. The contracting officer exercises Option Year 5, triggering the recertification requirement under FAR 52.219-28. The firm must certify as "other than small." The agency can no longer count Option Year 5 spending toward its SDVOSB goals, but the firm continues performing the work.

Frequently Asked Questions

Does recertifying as large cancel the existing contract?

No. Recertifying as other-than-small does not cancel an active contract or require the contractor to stop work. The government is generally permitted to continue ordering under the contract. The impact is primarily on the agency's ability to count the spending toward small business goals and, in some cases, the contractor's eligibility for new task orders on set-aside vehicle pools. Firms should review the specific contract terms, as some set-aside IDIQs have pool-specific rules about task order eligibility after recertification.

Does a merger or acquisition automatically trigger recertification?

Yes. FAR 52.219-28 requires that a contractor notify the contracting officer and recertify size status within 30 days after a merger or acquisition affecting the contractor. This is a mandatory obligation independent of the five-year option cycle. Failure to notify and recertify can constitute a false certification and expose the contractor to False Claims Act liability if the firm continues to receive set-aside benefits after becoming ineligible.

Can a firm that has recertified as large later recertify back to small?

Yes. Size status is measured at the time of each certification. If a firm's revenues subsequently decline below the size standard (due to revenue loss, changes in affiliation, or updated size standards), it may again certify as small on future solicitations and on recertification obligations where the current measurement shows compliance. However, misrepresenting size at any point in this cycle carries serious legal consequences.

Does recertification apply to subcontractors?

The post-award recertification requirement under FAR 52.219-28 applies to prime contractors. Subcontractors do not have a parallel FAR clause requiring them to recertify size status mid-contract. However, if a prime contractor uses a subcontractor's similarly-situated status to satisfy limitations-on-subcontracting requirements, and the subcontractor later loses its certification, the prime should reassess its compliance posture for those limitations.