No Competitor Size Protests of 8(a) Sole Source Awards, Says SBA OHA

The SBA’s regulations do not allow an 8(a) company to file a size protest challenging the award of an 8(a) sole source contract to a competitor.

In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that size protests relating to 8(a) sole source awards can be filed by contracting officers or the SBA itself–but not by competitors.

OHA’s decision in Size Appeal of GovSmart, Inc., SBA No. SIZ-5894 (2018) involved a Navy procurement for commercial off-the-shelf firmware, software license renewals and hardware maintenance.  The Navy awarded the work to Cypher Analytics, Inc. d/b/a Crown Point Systems, using an 8(a) sole source purchase order.

Shortly after the award, another 8(a) company, GovSmart, Inc., filed a size protest.  GovSmart contended that Crown Point was ineligible because it was violating the ostensible subcontractor affiliation rule.

The SBA Area Office issued a size determination dismissing GovSmart’s size protest for lack of standing.  The SBA Area Office said that because the award was an 8(a) sole source, GovSmart was not permitted to protest under SBA’s size protest regulations.  GovSmart then appealed the decision to OHA.

OHA wrote that SBA’s size protest regulations, at 13 C.F.R. 121.1001, specifically identify who may request a size determination in connection with an 8(a) sole source award.  The list includes “[t]he Participant nominated for award of the particular sole source contract,” “[t]he SBA program official with authority to execute the 8(a) contract or, where applicable, the procuring activity contracting officer who has been delegated SBA’s 8(a) contract execution functions,” or “[t]he SBA District Director in the district office that services the Participant, or the [SBA] Associate Administrator for Business Development.”

Notably missing from the list: 8(a) competitors.

Although GovSmart contended that it, too, was “nominated” for the 8(a) contract but ultimately unsuccessful in receiving it, OHA pointed to 13 C.F.R. 124.517, which states that “[t]he size status of an 8(a) participant nominated for an 8(a) sole source contract may not be protested by another 8(a) participant or any other party.”  Thus, “given that Crown Point clearly was nominated for the instant 8(a) sole source award, [GovSmart] cannot pursue a size protest against Crown Point, regardless of whether [GovSmart] also may have been nominated.”

OHA denied GovSmart’s size appeal.

Size protests are an important part of the government’s size and socioeconomic preference systems, but they have their limits.  As the GovSmart case demonstrates, an 8(a) company cannot file a size protest challenging the award of an 8(a) sole source contract to a competitor.