SBA Size Protest Allegations: Use ‘Em Or Lose ‘Em

SBA size protests should include all of the reasons why the protester believes the protested company is not small.  If the protester omits an allegation from its SBA size protest, the allegation may be lost forever, even if the protester files a SBA size appeal.

One protester recently learned this lesson the hard way.  On appeal before the SBA Office of Hearings and Appeals, the protester alleged that the awardee was affiliated with the incumbent contractor.  The problem?  The protester never mentioned any such affiliation in its SBA size protest.

SBA OHA’s decision in Size Appeal of TFab Manufacturing, Inc., SBA No. SIZ-5379 (2012) involved an Army small business set-aside solicitation for technical support services.  After reviewing competitive proposals, the Army announced that Redstone Defense Systems had been selected as the awardee.  Redstone was an 8(a) mentor-protege joint venture between Yulista Aviation, Inc., an 8(a) program participant, and Science and Engineering Services, Inc., its non-8(a) mentor.

TFab Manufacturing, Inc. filed a SBA size protest.  TFab alleged that Redstone was ineligible because Yulista Aviation was affiliated with its sister company, Yulista Management Services, under the totality of the circumstances.  TFab also alleged that the SBA had improperly approved the joint venture agreement because Yulista Aviation was capable of performing the contract without assistance.

The SBA Area Office denied TFab’s size protest.  The SBA Area Office determined that Yulista Aviation and Yulista Management Services were not affiliated because both companies are wholly-owned subsidiaries of an Alaska Native Corporation, and thus entitled to a statutory and regulatory exception from affiliation.  The SBA Area Office also held that it lacked jurisdiction to consider whether the joint venture agreement had been properly approved.

TFab filed a SBA size appeal with SBA OHA.  TFab argued that the SBA Area Office had erred because it failed to consider Redstone’s relationship with the incumbent contractor, a joint venture between Yulista Management Services and Science and Engineering Services.  TFab argued that Redstone was affiliated with this joint venture, known as JVYS, and was ineligible for the contract because of the affiliation.

SBA OHA wrote, “Appellant’s principal complaint is that the Area Office failed to investigate whether Redstone was affiliated with the incumbent contractor, JVYS.  The problem for Appellant is that this issue was never raised in Appellant’s underlying protest.”  SBA OHA continued, “[i]t is well-settled that an area office has no obligation to investigate issues beyond those raised in the size protest.”  SBA OHA denied the size appeal.

The TFab Manufacturing SBA OHA size appeal decision demonstrates the importance of filing a thorough SBA size protest.  The SBA Area Office is not required to consider allegations not contained in the SBA size protest, and by the time the SBA Area Office issues its size determination, it is likely too late to raise new allegations.  In other words, when it comes to SBA size protest allegations, use ’em or lose ’em.

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