Tag Archives: SBA affiliation rules

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

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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.

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8(a) Mentor-Protege Joint Venture Shielded From “Three-In-Two” Rule Affiliation

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According to the SBA Office of Hearings and Appeals, an 8(a) mentor-protege joint venture may be entitled to an affiliation “shield,” even if the joint venture violates the so-called “three-in-two” rule by receiving more than three contracts over a two-year period.

SBA OHA’s decision in Size Appeal of Magnum Opus Technologies, Inc., SBA No. SIZ-5372 (2012), should reassure 8(a) proteges and their mentors that if the SBA District Office has approved a contract award to an 8(a) mentor-protege joint venture, the joint venturers are very unlikely to be found affiliated as a result of that contract award.

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SBA OHA: Contractors Must Be Permitted To Contest Affiliation

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If you have ever gotten a traffic ticket, you know the ticket typically presents you with two options: send in your fine (essentially admitting guilt), or appear in court and contest the ticket.  The second option is available because in our democracy, a citizen accused of wrongdoing–even a minor traffic infraction–has the right to contest the charges.

The same is true when it comes to SBA size protests.  According to a recent decision by the SBA Office of Hearings and Appeals, a contractor cannot be found affiliated with another company unless the contractor is given the opportunity to respond to the particular basis of affiliation at issue.

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Subcontractors And Past Performance: What Are The Risks?

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Inexperienced small government contractors sometimes rely primarily (or completely) on larger subcontractors to boost their past performance scores.  Although this practice sometimes results in better past performance scores, there are two risks small government contractors should be aware of when it comes to relying on a subcontractor’s past performance: poor evaluations and ostensible subcontractor affiliation.

A recent GAO bid protest decision, coupled with a decision of the SBA Office of Hearings and Appeals, demonstrates how each risk may affect a small government contractor.

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SBA OHA: On SBA Size Rules, We’re The Boss

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“You’re not the boss of me now” is the chorus of “Boss of Me,” a catchy tune by They Might Be Giants.  But when it comes to the SBA size and affiliation rules, there is a boss: the SBA Office of Hearings and Appeals.

Under the SBA size regulations, SBA OHA has the final authority to determine whether a company is small or “other than small” for purposes of a particular procurement.  And,as one recent SBA OHA decision demonstrates, if a lower SBA office neglects to follow SBA OHA’s orders, SBA OHA will make sure that the lower office remembers who is the boss.

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Ostensible Subcontractor Rule: More Than Subcontract Value

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I travel with some frequency, but will readily admit that I hate flying (I trace it largely to an unpleasant incident several years ago involving a rapid cabin depressurization and emergency landing).  I’ve been known to pay a few dollars more to take a direct flight rather than a less expensive option involving a connection.  For me, while price is an important factor, other factors, like convenience–and fewer takeoffs and landings–matter, too.

A recent size appeal decision issued by the SBA Office of Hearings and Appeals demonstrates that, like my flying arrangements, price is not the only factor when it comes to determining whether a prime/subcontractor team has violated the ostensible subcontractor rule.  As this size appeal decision shows, in some cases, there may be no ostensible subcontractor affiliation even if the subcontractor will perform the bulk of the overall contract value.

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8(a) Joint Ventures and SBA Size Protests: SBA OHA Narrows The Scope of Review

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When the SBA Area Office reviews a SBA size protest against a SBA-approved 8(a) joint venture, the SBA Area Office must confine itself strictly to size issues.  According to a recent decision of the SBA Office of Hearings and Appeals, in conducting its review of a SBA size protest, the SBA Area Office cannot examine whether the joint venture complies with the 8(a) program’s regulations.

Although the distinction between size and 8(a) issues may sound like a technicality, it can make the difference between a sustained SBA size protest and an unsuccessful one.  As a result, this SBA OHA decision provides an extra layer of protection to SBA-approved 8(a) joint ventures–any makes filing a successful SBA size protest against an approved 8(a) joint venture that much more difficult.

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