The SBA Office of Hearings and Appeals does not have jurisdiction to review a contracting officer’s decision not to set aside a procurement for small business.

In a recent decision, SBA OHA dismissed a contractor’s contention that the procuring agency should have set aside a procurement for small business–and rejected the contractor’s underlying legal argument, as well.

SBA OHA’s decision in NAICS Appeal of Latvian Connection, LLC, SBA No. NAICS-5534 (2014) involved an Air Force solicitation seeking a contractor to repair condensation leaks at an Air Force facility in Qatar.  The Contracting Officer designed the solicitation with NAICS code 236220 (Commercial and Institutional Building Construction), but did not set aside the procurement for small businesses.

Latvian Connection, LLC filed an appeal with SBA OHA.  Latvian Connection contended that NAICS codes are “used exclusively” for small business set-aside solicitations, and that the Air Force’s use of a NAICS code indicated that it intended to issue a set-aside.  Latvian Connection acknowledged that the remainder of the solicitation did not specify that it was a small business set-aside, and requested that SBA OHA overturn the Contracting Officer’s decision not to set aside the procurement.

Citing previous cases involving similar matters, SBA OHA wrote “[i]t is well settled . . . that OHA has no jurisdiction to review a contracting officer’s decision not to set aside a procurement for small business.”  SBA OHA held that “this appeal is beyond OHA’s jurisdiction and must be dismissed.”

Before formally dismissing the appeal, SBA OHA noted that “the premise of [Latvian Connection’s] argument is also flawed.”  SBA OHA pointed out that under the FAR, “contracting officers are instructed to include a NAICS code in solicitations above the micro-purchase threshold.”  Additionally, “SBA regulations similarly indicate that NAICS codes are assigned even to full and open procurements.”  Therefore, “the mere fact that the CO designated a NAICS code for this procurement does not establish that a small business set-aside must have been intended.”

Jurisdiction over various areas of federal procurements can be confusing.  As the Latvian Connection case demonstrates, even though the matter involves small business, SBA OHA lacks jurisdiction to review a Contracting Officer’s set-aside decision.  Rather, such challenges are part of the bid protest process, and the GAO’s case law demonstrates that it will take jurisdiction (provided, of course, that the protest is timely and meets the GAO’s other jurisdictional requirements).