A recent decision at the Small Business Administration (SBA) Office of Hearings and Appeals (OHA) shows that reasonable suspicion doesn’t warrant the sustaining of a size protest. There must be specific facts to back up an assertion that an awardee is “other than small.” And a protestor has to come up with them fast.
In Size Appeal Of: Phoenix Environmental Design, Inc., Appellant Re: Thornwell Warehouse Association, Inc., an unsuccessful offeror filed a size protest against the awardee of a U.S. Fish and Wildlife Service small business set-aside contract, alleging that the awardee was “other than small” under the applicable NAICS code. (SBA No. 5591, September 10, 2014). The protestor’s reasoning wasn’t based on concrete evidence, but rather logical reasoning – because the awardee had three locations and 180 shareholders, it was likely other than small. As stated in the size protest, “[The Protestor] believes that once [the Awardee] sends in a completed SBA Form 355, Completed IRS Form 4506-T, tax returns[s], and all applicable evidence that it is a small agricultural cooperative…SBA will determine that [the Awardee] is ‘other than small’ because their members are not small businesses.”
On June 30, 2014, the size protest was denied at the SBA Area Office because it was “non-specific” in accordance with 13 CFR 121.1007. There were no specific facts presented which brought into question the Awardee’s ability to qualify as small for the 500 employee size standard under the applicable NAICS code.
In affirming the denial of the size protest, on September 10, 2014 the SBA OHA noted that the protestor had offered no evidence, or reason to believe, that any of the awardees’ members exceeded the size standards associated with their primary industries. Rather, the protest called for the investigation of the issue, and was therefore non-specific under the meaning of 13 CFR 121.1007. Because size protests must be specific, the SBA Area Office properly dismissed the protest. The SBA OHA also noted that while the protestor had submitted additional evidence at the appeal level, it could not be considered because it had not been presented to the SBA area office.
This is an interesting decision because it illustrates the difficulty in pursuing a size protest after an award is issued. Under the regulations set forth at 13 CFR Part 121, a size protest must be filed within five business days of receiving a Notice of Unsuccessful Offer. If a contractor wishes to protest an award to another business on the basis that the latter is “other than small,” it must point to concrete, specific reasons.
The lesson here is simple – do your homework before lodging a size protest, and do it fast.
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