GAO: Large Business Can’t Protest Set-Aside Award

A large business lacked standing to protest an award made under a small business set-aside solicitation, according to a recent GAO bid protest decision.

In Creative Computing Solutions, Inc., B-408704, B-408704.2 (Nov. 6, 2013), the GAO dismissed a bid protest filed by a large business, finding that the protester would not be in line for award even if the protest was sustained.

The Creative Computing Solutions GAO bid protest decision involved a Department of Homeland Security acquisition for compliance support services.  To obtain the services, the DHS issued a request for quotations under the GSA Schedule.  The RFQ was set-aside for small businesses. The GSA stated in an amendment that it was requiring offerors to certify as small as of the time of proposal submission.

Computer Computing Solutions, Inc. submitted a quote.  CCSI did not include a certification of its small business size with its quote.  Rather, CCSI stated that its quote was based on its underlying GSA Schedule 70 contract, which had been awarded to CCSI as a woman-owned small business.

After evaluating quotes, the DHS awarded a blanket purchase agreement to KnightPoint Solutions, Inc.  CCSI subsequently filed a GAO bid protest, challenging the evaluation of quotations and the source selection decision.

The DHS moved to dismiss the protest.  The DHS pointed out that CCSI had not self-certified as a small business in response to the RFQ.  Further, CCSI’s SAM profile indicated that CCSI was not a small business under the applicable NAICS code.  The DHS argued that because CCSI was not a small business, it was ineligible for award, and thus lacked standing to file a bid protest.

The GAO wrote that under its Bid Protest Regulations, “only an interested party may maintain a protest.”  An interested party, in turn, “is an actual or prospective bidder or offeror whose direct economic influence would be affected by the award of a contract, or the failure to award a contract.”  Accordingly, “[w]here a firm would not be in line for award in the event its protest is sustained, that firm lacks the direct economic interest necessary to maintain a protest.”

In this case, the GAO wrote, there was “no doubt” as to CCSI’s size status. The GAO stated that “CCSI characterizes itself–and indeed as certified its size status–as a large business for purposes of the applicable NAICS code under which this acquisition was conducted.”  The GAO determined that CCSI “would be ineligible for award of this BPA should its protest be successful.  It follows that CCSI is not an interested party for purposes of maintaining its protest.”  The GAO dismissed the protest.

So what became of CCSI’s argument that it was entitled to rely on the WOSB certification from its underlying GSA Schedule Contract?  That argument sounds plausible, since current SBA regulations state that because a BPA is not a contract, an offeror’s size is not to be determined as of the date of its quote for a BPA.

However, the GAO held that this portion of CCSI’s argument was untimely; had CCSI wished to challenge the size certification requirement, it was required to do so as part of a pre-award protest.  Having failed to raise the issue before the due date for proposals, CCSI was stuck with the RFQ’s recertification requirement, and could not rely on its underlying GSA Schedule certification.

In my opinion, because the SBA has exclusive authority to determine an offeror’s small business status in connection with a procurement, the GAO should tread carefully when it comes to dismissing protests on the basis of the protester’s size, at least in the absence of a formal SBA size determination.  (In this case, the SBA submitted a letter stating that CCSI appeared to be large, but CCSI did not appear to be afforded the benefit of a formal size determination).  For this reason, it is unclear to what extent the Creative Computing Solutions decision will serve as precedent in future cases, but that is cold comfort to CCSI, which had its protest dismissed on the basis of its apparent “large” status.

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