MULTIPLE NAIC’S CODES, OTHER CHANGES, COMING TO SCHEDULE CONTRACTS
GSA Multiple Award Schedule contracts will be awarded under separate NAIC’s codes where needed, according to GSA, pursuant to a final rule being incorporated now into all MAS contracts. Similarly, federal agencies will be required to list all applicable NAIC’s codes when issuing a Schedule task order if the task has a scope of work that crosses beyond one NAIC’s classification. This could lead to a reduction in “NAIC’s code shopping” where both industry and government representatives look for a way to set-aside a piece of work for a particular small business. Contractors may want to adjust their NAIC’s listings so that they include all applicable goods and services the company provides. Contractors may also note that these changes have been promised for some time. They now, however, have a specific effective date of October 1, 2022, the date by which federal IT systems are thought to be capable of operating under the new rules. Contractors may be classified as both small and large businesses, depending on the applicable NAIC’s code. Task orders with multiple NAIC’s codes may cause confusion if they are totally set aside for small businesses, an important factor contractors must consider when discussing potential acquisition approaches with federal prospects. Significantly, Schedule task orders below the Simplified Acquisition Threshold (SAT) will not be set-aside for small businesses. While the FAR Council received several recommendations on this matter, they determined that the Small Business Act allows only for the ability to set-aside specific task orders, but contains no mandate to do so. The Council pointed out that recent case law, including the landmark Kingdomware decision, is based on other statutes. Schedule contractors can expect continued activity on this issue, however, as small business groups push for mandatory set-asides under the SAT whenever the “rule of two” in FAR 19 is met. Other changes coming to Schedule contracts include updates to Service Contract Act wage determination rates and fourth party logistics capabilities that are primarily of interest to companies offering commodity-type contracts.