GAO Protests: VA Awards Set-Aside to Self-Certified Large Company

“So, are you a small business?”  “Nope.”  “Great.  How would you like a small business set-aside contract?”  “Umm, sure, okay.”

The dialogue above is fictional (and its lack of quality demonstrates why I am a government contracts lawyer, not a Hollywood screenwriter), but it could have occurred in relation to a recent Department of Veterans Affairs procurement.  In that case, a company self-certified that it was not small.  Despite the certification, the VA awarded the company a small business set-aside contract.

Not surprisingly, the GAO had something to say about it.

The GAO’s decision in GAO Protest of Tipton Textile Rental, Inc., B-406372 (May 9, 2012) involved a VA procurement for commercial laundry services.  The solicitation was originally issued as unrestricted, but the VA subsequently issued an amendment changing the procurement to a small business set-aside.

Linen King, LLC, an Oklahoma company, submitted an offer.  In its offer, Linen King checked the box certifying that it was not a small business.  Incredibly, the VA awarded the contract to Linen King, despite its representation that it was not small.  A competitor filed a GAO bid protest challenging the award.

If ever there was a GAO protest calling for quick corrective action–that is, an acknowledgment by the procuring agency that the award decision was flawed, and a voluntary correction of its mistakes–it was this one.  After all, the VA had just handed a small business set-aside contract to an avowedly large company.  Instead, the VA fought the protest, arguing that Linen King had made a “common mistake” by incorrectly certifying itself as large.  The VA also contended that the contracting officer had reasonably awarded Linen King the contract because a CCR profile for a company with a similar named based in Missouri stated that the company was small.

The GAO made short work of the VA’s justifications.  It noted that the CCR conspicuously states that it is not to be used for representations and certifications, and questioned why the VA had relied on the profile of a company based in another state.  In addition, the GAO didn’t buy the argument that the solicitation’s check-the-box feature was somehow confusing, noting that the same certification form “is used in essentially every federal contract solicitation,” and that Linen King apparently was not “confused” by the other questions it accurately answered, such as whether it was a service-disabled veteran-owned small business.

In sum, the GAO held, the VA “had no reasonable basis” to believe that Linen King was an eligible small business “since its quotation unambiguously represented precisely the opposite.”  The GAO sustained the protest.

Who knows what really happened behind the scenes here.  The bottom line is that Linen King expressly self-certified as not small, so it should not have received a small business set-aside contract.  And after the GAO sustained the protest, that is exactly what should happen.

 

 

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