The SBA Office of Hearings and Appeals is an appellate forum and lacks jurisdiction to hear initial size protests.
As explained in a recent SBA OHA decision, size protests must be filed with the relevant Contracting Officer, who then refers the matter to the appropriate SBA Area Office. Only after the SBA Area Office issues a size determination does OHA have jurisdiction to consider a size appeal.
OHA’s decision in Size Appeal of Latvian Connection, LLC, SBA No. SIZ-5734 (2016) involved a State Department solicitation for the purchase of TACMED Medical Course equipment. The solicitation was set aside for small businesses under NAICS code 334510 (Electromedical and Electrotherapeutic Apparatus Manufacturing), using the FedBid reverse auction system.
After reviewing bids, the State Departments announced that US21, Inc. was the awardee. Latvian Connection, LLC then attempted to file a size protest directly with OHA. Latvian Connection sent OHA a message stating:
Dear Office of Hearings and Appeals:
[Latvian Connection] files this size protest against US21 INC. for its award of [the State Department Contract] . . . US21 INC do not hold the NAICS 33451 . . . We believe that 2 other bidders that have been redacted are also ineligible bidders . . . 3 of these companies bid 2 are redacted from my view.
Latvian Connection attached various supporting documents, such as the solicitation and FedBid posting, to its size protest.
OHA wrote that it “is an appellate forum that hears appeals of size determinations rendered by SBA Area Offices.” As such, “OHA has no authority to issue size determinations in the first instance.” OHA continued:
Here, [Latvian Connection] does not provide the required copy of, or even reference, an SBA area office size determination on US21. Further, it is obvious that [Latvian Connection] meant to file a size protest against US21, the then-intended awardee. Both the Federal Acquisition Regulation (FAR) and SBA’s regulations governing the size determination program require that an interested party seeking to challenge an offeror’s eligibility as a small business must file a size protest with the contracting officer, who will then refer the protest to the appropriate SBA area office for a size determination. This procedure clearly was not done, and as a result, there is no size determination to appeal.
OHA dismissed Latvian Connection’s attempted size protest.
For government contractors, it’s easy to become confused about what forum has jurisdiction over which aspects of the procurement process. As OHA explained in Latvian Connection, OHA doesn’t have jurisdiction over initial size protests; its jurisdiction in size matters is limited to considering appeals of size determinations issued by SBA Area Offices.
The Latvian Connection case is notable in one other respect: Latvian Connection’s assertion that US21 did not “hold” the NAICS code assigned to the solicitation. Presumably, Latvian Connection meant that US21 did not list this NAICS code on its SAM profile.
For the most part, contractors themselves are responsible for the NAICS codes listed on their SAM profile, and ordinarily can add or delete them as they see fit. It is a common misunderstanding, but barring a specific solicitation requirement, a contractor need not list any specific NAICS code on its SAM profile to be awarded a contract. Unless the State Department solicitation required the awardee to list NAICS code 334510, the State Department could validly award the contract to US21, even if this code wasn’t listed on its SAM profile.