Category Archives: SBA Size Protests

Family Relationship, Plus Revenues & Subcontracts, Caused Affiliation, Says SBA OHA

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A small business was affiliated with companies owned by the business owner’s father and siblings, based on the family relationship and the companies’ ongoing history of doing business together.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the small business had not successfully rebutted the regulatory presumption that companies owned by close family members are affiliated, because the small business had earned substantial revenues from the alleged affiliates, and intended to issue a subcontract to both affiliates with respect to the procurement at issue.

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Ostensible Subcontractor Rule: Size Determined as of the Date of Final Proposal

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For the purposes of the ostensible subcontractor rule, a firm’s small business size is determined as of the date of final proposal revisions.

As demonstrated in a recent SBA Office of Hearings and Appeals decision, any changes to the relationship between the prime contractor and subcontractor made after the date of final proposal have little to no bearing in determining compliance with the ostensible subcontractor rule.

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SBA OHA: 42%-49% Of Revenues Did Not Create Economic Dependence Affiliation

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A small business was not affiliated with its largest customer under the SBA’s economic dependence affiliation rule, even though the small business earned as much as 49% of its revenues from the alleged affiliate–and even though the small business’s SEC Annual Report stated that the small business was dependent on its customer.

SBA OHA’s decision indicates that receiving less than 70% of revenues from an alleged affiliate may not, absent other indicia of affiliation, establish affiliation under the economic dependence rule.

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GSA Schedule BPA Awards: Size Status Ordinarily Is Based On Underlying GSA Schedule Contract

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When a small business submits an offer for a Blanket Purchase Agreement issued against a GSA Schedule contract, the offeror does not automatically recertify its size.  Rather, a new regulation effective December 31, 2013 provides that an offeror’s size status for a BPA issued against a GSA Schedule ordinarily is determined by looking to the offeror’s self-certification for the underlying GSA Schedule contract.

In a recent size appeal decision, the SBA Office of Hearings and Appeals relied, in part, on the new regulation to find that an offeror had not recertified its small business status by submitting a quotation for a BPA to be issued against the offeror’s GSA Schedule contract.

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SBA OHA: No Automatic Size Recertifications For GSA Schedule Task Orders

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Submitting a proposal for a GSA Schedule task order does not result in an automatic recertification of the offeror’s size.

In a recent size appeal decision, the SBA Office of Hearings and Appeals rejected the argument that an offeror recertifies its size merely by submitting a proposal for a GSA task order.  Instead, a firm’s size for purposes of a GSA Schedule task order competition is determined based on the underlying GSA Schedule contract, unless the procuring agency requires recertification for the task order.

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SBA Size Protests: COs Not Required To Assist Protesters

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Contracting Officers are not required to assist potential protesters by furnishing them with information to use in SBA size protests.

According to a recent size appeal decision of the SBA Office of Hearings and Appeals, the SBA properly dismissed a size protest for lack of support, notwithstanding the protester’s allegation that the Contracting Officer had failed to provide information needed to support the size protest.

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SBA OHA: Small Business Size Not Measured By Profits

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A firm’s small business size status for federal procurements is measured by the firm’s revenues, not by its profits.

As the SBA Office of Hearings and Appeals explained in a recent size determination, measuring small business status by reference to profits would allow some very large companies to qualify as “small.”

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