Can a contractor file an SBA size protest alleging so-called “ostensible subcontractor” affiliation, without knowing the identity of the subcontractor in question?  Yes.  According to the SBA Office of Hearings and Appeals, a size protest should not be dismissed as “non-specific” just because it alleges ostensible with an unknown subcontractor–or a “mystery subcontractor,” if one is inclined to be a bit more dramatic.

The SBA OHA decision in Size Appeal of C2G Ltd. Co., SBA No. SIZ-5294 (2011)  involved a Defense Logistics Agency set-aside procurement for maintenance and repair work.  The agency identified a company named BCOG Equipment Services as the apparent successful offeror.

C2G filed a size protest, stating that BCOG was a new entity, had no experience or past performance, and must be relying upon another company to perform the contract.  However, C2G did not know the identity of any of BCOG’s subcontractors, so could not name any alleged ostensible subcontractor in its SBA size protest.

The SBA’s Area Office dismissed the size protest as insufficiently specific under 13 C.F.R. 121.1007(c), a regulation requiring size protests contain sufficient detail to enable the protested business to understand the basis upon which its size is challenged and intelligently respond.  C2G appealed to SBA OHA, and SBA OHA reversed the Area Office’s size determination.

SBA OHA wrote that the size protest provided sufficient information for BCOG to understand the basis of protest—namely, that it was a new, inexperienced company and was unduly reliant upon a subcontractor.  As for the identity of the subcontractor, OHA noted “the nature of the allegation does not require that a specific affiliate be identified in order for the challenged firm to meaningfully respond.”  Rather, BCOG was already aware of its own subcontracting plans, and could use its proposal to rebut the allegation.

In addition, SBA OHA noted that a small business must file a size protest within the tight five-day limit set by regulation.  If it is forced to wait to file the size protest until after it learns the identity of the subcontractor, it might be too late to meet the timeliness requirement.

OHA’s decision in C2G Ltd. Co. means that if a small business loses a set-aside competition to an inexperienced firm, or if it has another good reason to believe that a competitor could not have won a small business set-aside contract without substantial help from a subcontractor, the small business may be able to file a SBA size protest contending that the competitor violated the ostensible subcontractor rule—even if the competitor’s teammate is a “mystery subcontractor.”