If your small business competes on an unrestricted (aka “full and open”) solicitation, you probably don’t submit a small business subcontracting plan. After all, small businesses are typically exempt from the subcontracting plan requirement, so why do the extra paperwork (and potentially foreclose subcontracting opportunities with large businesses?)
However, even on unrestricted procurements, you must be careful to forego a subcontracting plan only if you are actually small under the NAICS code assigned to the procurement. Otherwise, you could end up losing a contract, as one unfortunate contractor discovered in eTouch Federal Systems, LLC, B-404894.3 (Aug. 15, 2011), a GAO bid protest decision.
The eTouch Federal Systems bid protest involved an unrestricted IRS solicitation for web portal services. Under the solicitation, small business participation was one of four technical evaluation facts. eTouch, which identified itself as a small business in its proposal, did not submit a subcontracting plan.
The IRS originally awarded the contract to eTouch. However, a competitor filed a size protest with the SBA, and the SBA held that eTouch was not a small business for purposes of the procurement.
After the SBA’s decision, the agency cancelled eTouch’s award and re-evaluated eTouch’s proposal. Not surprisingly, because eTouch had not submitted a subcontracting plan, the evaluators found eTouch’s proposal unacceptable, and ended up awarding the contract to the competitor. The GAO upheld the agency’s decision, leaving eTouch without its contract.
One final question you may be asking yourself—can a competitor really file an SBA size protest on an unrestricted procurement? Yes. A competitor (even a large business competitor) can file a size protest on an unrestricted procurement if the awardee has identified itself as small. So, next time you bid on a full and open contract, don’t self-certify as small until you satisfy yourself that your company falls beneath the size standard applicable to the procurement—just like you would for a set-aside contract.