When the SBA evaluates a size protest, it need not obtain and consider “outside sources” of information–that is, information that is not provided by the protester or the protested business.
A recent decision of the SBA Office of Hearings and Appeals highlights the need for a size protest to include specific, detailed information about why the protested firm is alleged to be “other than small.” If the protester does not include information from outside sources, the SBA is not required to seek out such information on its own.
OHA’s decision in Size Appeal of Wescott Electric Company, SBA No. SIZ-5691 (2015) involved a GSA solicitation for the replacement of a power supply system. The solicitation was issued as a small business set-aside under NAICS code 238210 (Electrical Contractors and Other Wiring Installation Contractors).
After evaluating competitive proposals, the GSA announced that Innovative Support Solutions, Inc. was the apparent successful offeror. An unsuccessful competitor, Wescott Electric Company, then filed a SBA size protest. Wescott contended that ISS was affiliated with its subcontractor under the common management, newly organized concern, and ostensible subcontractor affiliation rules.
ISS responded to the size protest. As required by the SBA, ISS provided a copy of its proposal, a completed SBA Form 355, a sworn declaration from its President, and other documents.
After reviewing ISS’s response, the SBA Area Office issued a size determination finding ISS to be an eligible small business. The SBA Area Office found that ISS was not affiliated with its subcontractor under the common management, newly organized concern, or ostensible subcontractor rules.
Wescott filed a size appeal with OHA. In its size appeal, Wescott complained that the SBA Area Office’s analysis “seems to have been restricted to available records on hand and obtained from [ISS and its subcontractor] as opposed to other outside sources.” Wescott contended that the SBA Area Office “failed to uncover and consider relevant information that would have shown the affiliation” between the companies. In addition to arguing that the SBA Area Office should have independently uncovered outside evidence of affiliation, Wescott asked OHA to consider new evidence that had not been submitted to the SBA Area Office, including records from SAM and the Federal Procurement Data System–Next Generation.
OHA first addressed Wescott’s attempt to introduce new evidence. OHA wrote that its review “is based upon the evidence in the record at the time the Area Office made its determination.” As a result, “evidence that was not previously presented to the Area Office is generally not admissible and will not be considered by OHA.” In this case, “all of the new evidence [Wescott] seeks to admit was available to [Wescott] at the time of the protest, and [Wescott] offers no rationale as to why this information could not have been provided to the Area Office.” OHA excluded the new evidence from consideration.
OHA then turned to Wescott’s legal argument–namely, that the SBA “faiiled to uncover information from ‘outside sources’ which might have shown that ISS is not a small business.” OHA wrote that this argument “reflects a misunderstanding of the legal process governing size protests and size determinations.”
OHA explained that, under the SBA’s size protest regulations, the SBA Area Office will base its decision “primarily on the information supplied by the protester or the entity requesting the size determination and that provided by the concern whose size status is at issue.” In this case, “the Area Office was not required to, and did not, expand the scope of its review beyond the issues raised by [Wescott].” OHA denied Wescott’s size appeal.
The Wescott Electric Company size appeal is a good reminder that prospective size protesters must put their best foot forward in the initial protest. The SBA Area Office generally is not required to address issues that are not raised in the size protest, nor is the Area Office typically required to obtain outside information to evaluate the protest. Where information exists at the time of the protest–like the SAM and FPDS-NG data at issue in Wescott Electric Company–it is up to the protester to provide it. If the protester doesn’t do so, it runs the risk that the information simply won’t be considered.
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