SDVOSB Task Order Eligibility: SBA OHA Provides Some Clarity

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If an SDVOSB was eligible at the time of its initial offer for a multiple-award contract, the SDVOSB ordinarily retains its eligibility for task and delivery orders issued under that contract, unless a contracting officer requests a new SDVOSB certification in connection with a particular order.

In a recent SDVOSB appeal decision, the SBA Office of Hearings and Appeals confirmed that regulatory changes adopted by the SBA in 2013 allow an SDVOSB to retain its eligibility for task and delivery orders issued under a multiple-award contract, absent a request for recertification.

OHA’s decision in Redhorse Corporation, SBA No. VET-261 (2017) involved a GSA RFQ for transition ordering assistance in support of the Network Services Program.  The RFQ contemplated the award of a task order against the GSA Professional Services Schedule multiple-award contract.  The RFQ was issued as an SDVOSB set-aside under NAICS code 541611 (Administrative Management and General Management Consulting Services).  The GSA contracting officer did not request that offerors recertify their SDVOSB eligibility in connection with the order.

After evaluating quotations, the GSA announced that Redhorse Corporation was the apparent awardee.  An unsuccessful competitor subsequently filed a protest challenging Redhorse’s SDVOSB status.  The SBA Director of Government Contracting sustained the protest and found Redhorse to be ineligible for the task order.

Redhorse filed an SDVOSB appeal with OHA.  Redhorse argued that regulations adopted by the SBA in 2013, and codified at 13 C.F.R. 125.18(e), specify that a company qualifies as an SDVOSB for each order issued against a multiple-award contract unless the contracting officer requests recertification in connection with the order.

OHA wrote that SBA’s SDVOSB regulations “make clear that a concern will retain its [SDVOSB] eligibility for all orders under a GSA Schedule or other ‘Multiple Award Contract’ unless the CO requests recertification for a particular order.”  OHA then quoted the relevant portions of 13 C.F.R. 125.18(e):

Recertification. (1) A concern that represents itself and qualifies as an SDVO SBC at the time of initial offer (or other formal response to a solicitation), which includes price, including a Multiple Award Contract, is considered an SDVO SBC throughout the life of that contract. This means that if an SDVO SBC is qualified at the time of initial offer for a Multiple Award Contract, then it will be considered an SDVO SBC for each order issued against the contract, unless a contracting officer requests a new SDVO SBC certification in connection with a specific order.
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(5) Where the contracting officer explicitly requires concerns to recertify their status in response to a solicitation for an order, SBA will determine eligibility as of the date the concern submits its self-representation as part of its response to the solicitation for the order.

In this case, Redhorse “self-certified as an [SDVOSB] when it was initially awarded its Professional Services Schedule contract, and most recently recertified its status in 2014 when GSA exercised an option to extend the contract.”  As a result, “according to the plain language” of the regulation, Redhorse is considered an SDVOSB “for each order issued against the contract,” unless a recertification is requested.

OHA stated that “[i]t is undisputed that the CO here did not request recertification of size or status for this task order.”  Accordingly, “the award of the instant task order was not an event that [the protester] could challenge through a status protest.”

OHA concluded that the initial SDVOSB protest “should have been dismissed.”  OHA granted the appeal and vacated the SBA’s decision.

Before the 2013 changes to 13 C.F.R. 125.18, the SBA’s regulations didn’t specifically address whether an SDVOSB’s eligibility could be challenged on an order-by-order basis.  But as the Redhorse Corporation appeal demonstrates, the SBA’s regulatory changes cleared up that potential confusion.  Under the current rules, if an SDVOSB qualifies at the time of its initial offer on the underlying multiple-award contract, the SDVOSB ordinarily will be eligible for orders issued under that contract, unless a Contracting Officer requires recertification in connection with an order.

One final note: the SBA’s decision applies to procurements falling under the SBA’s self-certification SDVOSB program.  But as SmallGovCon readers know, the government is currently operating two SDVOSB programs: the SBA’s self-certification and the VA’s formal verification program.  OHA’s decision doesn’t apply to VA SDVOSB procurements; it’s possible that the VA would reach a different conclusion for a procurement governed by the VAAR’s unique SDVOSB rules.