A contractor was eligible for award of a small business set-aside task order because the contractor was “small” as of the date of its task order proposal–even though the contractor outgrew the size standard by the time the task order was awarded.
In a recent bid protest decision, the GAO held that a contractor may qualify for the award of a set-aside task order based on the date of its initial proposal, even in cases where the agency is prohibited from taking small business credit for the award.
The GAO’s decision in Research and Development Solutions, Inc., B-410581.2 (Jan. 14, 2015) involved a Navy task order solicitation for technical and engineering services. The solicitation was issued as a small business set-aside under the SeaPort-e IDIQ contract vehicle.
The solicitation stated that each offeror’s size status would be based on its self-certification for the underlying SeaPort-e IDIQ contract. The solicitation also provided that the Contracting Officer would consider the prospective awardee’s size status before making an award.
ICI Services Corp. submitted a proposal before the solicitation’s due date of August 30, 2013. At the time ICI submitted its proposal, it was self-certified as a small business under its SeaPort-e contract.
A lengthy evaluation and discussion period followed. On January 15, 2014, ICI amended its self-certification for its SeaPort-e IDIQ contract, and recertified as a large business. In September 2014, the Navy awarded the task order to ICI.
Research and Development Solutions, Inc., an unsuccessful competitor, filed a GAO bid protest. RDSI alleged, in part, that it was improper for the agency to award the task order to ICI because ICI was not self-certified as a small business for the SeaPort-e contract at the time of award.
RDSI pointed to a SBA regulation, 13 C.F.R. § 121.404(g)(3). That regulation provides, in relevant part, that a contractor on a “long term” contract of more than five years must recertify its size prior to the conclusion of the fifth year. If the contractor recertifies as large, “the agency can no longer count the options or orders issued pursuant to the contract, from that point forward, towards its small business goals.” RDSI contended that it was improper for the Navy to award ICI a small business set-aside task order in a circumstance where the Navy was prohibited from taking small business credit for the award.
Because the protest concerned a size issue, the GAO sought the SBA’s input. In comments filed with the GAO, the SBA stated that ICI’s size status was to be determined at the time that it submitted its proposal for the task order competition, not at the time that it was issued the task order.
The GAO agreed with the SBA, writing:
While section 121.404(g)(3) prohibits the agency from counting ICI’s task order award towards the Navy’s small business goals, the provision does not, contrary to the protester’s argument, require that the agency also find ICI ineligible for award. Rather, the question of whether ICI was eligible for award in this context is distinct from the question of whether the agency should count (i.e., take credit for) that award towards its small business prime contracting goals.
The GAO concluded, “the Navy properly found, notwithstanding ICI’s subsequent recertification as an other-than-small business, that the awardee was eligible to receive the task order here, because ICI was certified as a small business as of the date that it submitted its initial proposal.” The GAO denied RDSI’s protest.
The question of when a contractor’s size status is to be determined is often critical to the question of whether that contractor qualifies as “small” for purposes of a particular solicitation. As the Research and Development Solutions, Inc. decision demonstrates, a contractor need not be small at the time a set-aside task order is awarded, so long as the contractor qualified as small when it submitted its proposal.