An unsuccessful offeror lacked the ability to file a valid SBA size appeal involving the size status of a competitor, because the unsuccessful offeror was eliminated from the competitive range–and its elimination had been upheld in a GAO bid protest decision.

In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that an offeror that cannot possibly be awarded the contract ordinarily lacks standing to file a size appeal.

OHA’s decision in Size Appeal of Straughan Environmental, Inc., SBA No. SIZ-5767 (2016) involved a NASA solicitation for environmental consulting services.  The solicitation was set aside for small businesses under NAICS code 541620.

Straughan Environmental, Inc. submitted a proposal.  After evaluating initial proposals, NASA established a competitive range, which did not include Straughan.  Straughan filed a GAO bid protest challenging its exclusion from the competitive range.  The GAO denied Straughan’s bid protest.

NASA subsequently announced that Integrated Mission Support Services, LLC, an SBA 8(a) mentor-protege joint venture, was the apparent successful offeror.  After learning of the award to IMSS, Straughan filed an SBA size protest.  The SBA Area Office ultimately found IMSS to be an eligible small business.

Straughan then filed a size appeal with SBA OHA.  In response, IMSS filed a motion to dismiss.  IMSS argued that, because Straughan had been eliminated from the competitive range, it was ineligible for the contract.  Accordingly, IMSS contended, Straughan was not adversely affected by the size determination finding IMSS to be a small business, and lacked standing to file a valid size appeal.

OHA agreed with IMSS.  OHA wrote that under its regulations, “any person adversely affected by a size determination” may file a size appeal.  In previous cases interpreting this regulation, OHA has held that an appellant ordinarily must be “an otherwise eligible small business offeror on the procurement.”  OHA explained:

The rationale behind this policy is that, if an otherwise eligible small business offeror were to prevail on its appeal, there is a chance it could ultimately be awarded the contract.  This possibility is what causes an unsuccessful offeror to be adversely affected by a size determination favorable to a rival.

In this case, Straughan “is not an otherwise eligible small business offeror on this procurement because NASA excluded [Straughan’s] proposal from the competitive range, and GAO affirmed this result by denying [Straughan’s] bid protest challenging its elimination from the procurement.”  Straughan “cannot be awarded the contract, regardless of whether it prevails on appeal at OHA.”  Therefore, Straughan “is not adversely affected by the instant size determination and lacks standing to bring this appeal.”

OHA dismissed Straughan’s size appeal.

An unsuccessful offeror’s standing to file a size protest or size appeal is relatively broad; unlike in some GAO bid protests, the protester or appellant need not demonstrate that it was next in line for award.  But, as the Straughan Environmental size appeal demonstrates, standing to file a size appeal is not unlimited.  Where, as in Straughan Environmental, the putative appellant was excluded from the competitive range, the appellant ordinarily will lack standing to file a size appeal.