Debriefings and SBA Size Protests: Sorry, No Extension

Posted on December 9, 2011 by Steven Koprince

Today’s public service announcement comes to us courtesy of the SBA Office of Hearings and Appeals. Here it is: asking for and receiving a debriefing does not extend the deadline to file a SBA size protest. Asking for a debriefing may extend the time frame for filing a GAO bid protest but does not extend the five-business-day period for filing a SBA size protest.

Case in point: the decision of SBA OHA in Size Appeal of Garco Construction, Inc., SBA No. SIZ-5308 (2011). In that case, a small business learned of award to a competitor on September 26, but waited until after it received its debriefing on October 21 to file its SBA size protest. The small business argued that its size protest should be considered timely, because it has no knowledge of the grounds of protest until after the debriefing.

Nice try. SBA OHA made short work of this argument, stating “that a protester did not learn of the grounds for its protest until the debriefing is no basis for extending the deadline for filing a protest.” SBA OHA held that the SBA Area Office had properly dismissed the size protest as untimely.

And that concludes today’s public service announcement for small government contractors. As they say on NBC, “The More You Know.”

SBA Affiliation Rules and Family Matters: OHA OK’s Minor Business Dealings

Posted on December 7, 2011 by Steven Koprince

When it comes to the SBA affiliation rules, it’s a good idea to keep Steve Urkel in mind. Why remember this lovable suspender-wearing nerd? Well, because in the SBA affiliation world, “family matters.”

Okay, bad joke. But hold the rotten tomatoes, because I have a point here. In my experience, one of the most common ways small businesses find themselves with an SBA affiliation problem is through family relationships. Many small government contractors are surprised to learn that the SBA presumes that firms controlled by close family members are affiliated due to a supposed “identity of interest” between the family members. For example, if you control Company A and your spouse controls Company B, the two firms are presumed affiliated for SBA size purposes, and you must rebut the presumption (not an easy task) to avoid affiliation.

In some prior size appeal cases, the SBA Office of Hearings and Appeals held that two firms controlled by family members could not rebut the presumption if the companies had any business dealings whatsoever. However, in a commonsense decision—albeit one creating a bit of a gray area—SBA OHA recently held that two companies controlled by family members are not necessarily affiliated just because they have minor business relations.

GAO Protesters: Take Comments on the Agency Report Seriously (or Go Home)

Posted on December 7, 2011 by Steven Koprince

The GAO bid protest process involves more than just the initial protest itself. After the protest is filed, the agency has the opportunity to take so-called “corrective action,” essentially conceding victory to the protester. But if the agency elects to fight the protest, and produces an agency report countering the protester’s arguments, the ball is back in the protester’s court.

The GAO expects a protester to file a detailed response (called “comments” in GAO protest parlance) to the agency report. Fail to file comments, and the GAO will dismiss the protest. But, as demonstrated in the GAO’s decision in Ross Technologies, Inc., B-405266.2 (Dec. 7, 2011), if the comments do not address the arguments in the agency report, it may be no better than not filing them at all.

The VA’s SDVOSB Database and GAO Protests: Be Verified, Or Go Home

Posted on November 28, 2011 by Steven Koprince

If a service-disabled veteran-owned small business has been denied verification for the U.S. Department of Veterans Affairs’ Vendor Information Pages database, it cannot file a bid protest with the GAO challenging the VA’s award decision on a VA SDVOSB set-aside procurement—even if the company has a request for reconsideration pending with the VA’s Center for Veterans Enterprise.

So says the GAO in MICCI Imaging Construction Company, B-405654 (November 28, 2011), a decision in which the GAO held that a company that has been denied verification lacks “standing” to pursue a GAO bid protest of a VA SDVOSB set-aside to a competitor. Translating the legalese, the GAO’s message to non-verified companies is, “don’t waste our time.”

SBA Affiliation Rules, the Passive Investor, and Weekend at Bernie’s

Posted on November 21, 2011 by Steven Koprince

Remember Weekend at Bernie’s, the 1980s comedy about a couple of young corporate employees who pretend their murdered boss is still alive? (Random note: did you know that they made a Weekend at Bernie’s 2 in 1993? Neither did I, until I was writing this post).

What does Bernie have to do with the SBA affiliation rules? In the movie, Bernie appears to control his company—even though he is not exactly in a position to make executive decisions. Like Bernie, in the SBA’s eyes, a person can be deemed to control a company, even if he or she does not actually exercise any power. The decision of the SBA Office of Hearings and Appeals in Size Appeal of BR Construction, LLC, SBA No. SIZ-5303 (2011) shows that SBA affiliation problems can arise when bylaws and operating agreements contain certain provisions that the SBA will find give legal control to a minority owner, even if that minority owner, in practice, acts as a passive investor.

Subcontractor’s Provision of Bonds OK with GAO—But Watch Out for Affiliation

Posted on November 14, 2011 by Steven Koprince

Small prime contractors often have difficulty securing necessary bid, performance and payment bonds for federal government contracts–especially in the construction industry, where payment and performance bonds are typically required. Not surprisingly, small primes often turn to their larger subs to secure the necessary bonding.

A small prime’s reliance on its subcontractor for bonding was recently put to the test in a GAO bid protest. Fortunately for small primes everywhere, in Shaka, Inc., B-405552 (Nov. 14, 2011), the GAO held that the subcontractor’s role in the bond process did not render the bond defective. But small primes and their large subcontractors shouldn’t pop the champagne for a celebration, because subcontractor bonding assistance can still increase the risk of ostensible subcontractor affiliation.

SBA OHA OK’s “Mystery Subcontractor” SBA Size Protests

Posted on November 3, 2011 by Steven Koprince

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.