SBA Initiates Clarification on Small Business Size Protest Standing Under 13 CFR 121.1001

SBA Initiates Clarification on Small Business Size Protest Standing Under 13 CFR 121.1001The SBA clarified the issue of who can file a size protest. Whether a  company can file a size protest directly relates to the issue of standing. Only an interested party can file a bid protest or participate in the case. However, there are uniquely different legal considerations when filing a small business size protest at the SBA.

Under the SBA’s new rulings, it seemed to clarify 13 CFR Part 121.1001(a) which set out the statutory framework for who can initiate a small business size status protest. The reason for the clarification was that both contracting officers and small businesses found that the old statutory language was confusing.

“ ..any offeror  that has not been eliminated for reasons not related to size may file a small business size protest.” As the SBA explained, the underlying rationale for 13 CFR 121.1001(a) is to allow only small businesses that are in line for an award to have size protest standing to challenge a competitor’s small business size status. See information about 13 CFR 124.513.

13 CFR 121.1001(a) is now clarified: Therefore, bidders should be clear that if the contracting agency makes a determination that their proposal was non-responsive, technically unacceptable or outside the competitive range, then they have no standing to file a small business size protest to the SBA. Such a ruling raises the question as to whether the offeror has the right to challenge the decision to exclude due to non-responsiveness to begin with.

Another part of the SBA new rulings gives the SBA Director of Office Government Contracting authority to initiate a small business size determination under 13 CFR 121.1001(b)(11) in connection with a firm’s eligibility under the SDVOSB and WOSB/ EDWOSB programs. Previously, although these programs were added to the SBA’s regulations, the SBA was powerless to make size determinations. See also 13 CFR 121.103.

Note: The SBA and contracting officer always have standing to file a size protest at any time.

Although the new small business size protest standing rule is clarified, OHA SBA bid protest decisions were not too far off. SBA OHA has often held that a technically-unacceptable offeror has no standing to file a size protest regardless of whether that offeror was ever formally excluded from the competition. Size Appeal of KAES Enters., LLC, SBA No. SIZ-5425 (2012), recons. Denied.  In one case, Size Appeal of Glen/Mar Constr., Inc., SBA No. SIZ-5143, SBA OHA decided that the SBA correctly dismissed a size protest for lack of standing although it was “regrettable that [the protester] was not informed that its proposal was determined technically unacceptable”).

Statutory Language

13 CFR Part 121.1001   Who may initiate a small business size protest or request a formal size determination?

(a) Size Status Protests. (1) For SBA’s Small Business Set-Aside Program, including the Property Sales Program, or any instance in which a procurement or order has been restricted to or reserved for small businesses or a particular group of small businesses (including a partial set-aside), the following entities may file a size protest in connection with a particular procurement, sale or order:

(i) Any offeror that the contracting officer has not eliminated from consideration for any procurement-related reason, such as non-responsiveness, technical unacceptability or outside of the competitive range;

(ii) The contracting officer;

(iii) The SBA Government Contracting Area Director having responsibility for the area in which the headquarters of the protested offeror is located, regardless of the location of a parent company or affiliates, or the Director, Office of Government Contracting; and

(iv) Other interested parties. Other interested parties include large businesses where only one concern submitted an offer for the specific procurement in question. A concern found to be other than small in connection with the procurement is not an interested party unless there is only one remaining offeror after the concern is found to be other than small.

(2) For competitive 8(a) contracts, the following entities may protest:

(i) Any offeror that the contracting officer has not eliminated from consideration for any procurement related reason, such as non-responsiveness, technical unacceptability or outside of the competitive range;

(ii) The contracting officer; or

(iii) The SBA District Director, or designee, in either the district office serving the geographical area in which the procuring activity is located or the district office that services the apparent successful offeror, or the Associate Administrator for Business Development.

(3) For SBA’s Subcontracting Program, the following entities may protest:

(i) The prime contractor;

(ii) The contracting officer;

(iii) Other potential subcontractors;

(iv) The responsible SBA Government Contracting Area Director or the Director, Office of Government Contracting; and

(v) Other interested parties.

(4) For SBA’s Small Business Innovation Research (SBIR) program and Small Business Technology Transfer (STTR) program, the following entities may protest:

(i) An offeror or applicant for that solicitation;

(ii) The funding agreement officer; and

(iii) The responsible SBA Government Contracting Area Director; the Director, Office of Government Contracting; or the Associate Administrator, Investment Division.

(5) For the Department of Defense’s Small Disadvantaged Business (SDB) Program, and any other similar program of another Federal agency, the following entities may file a protest in connection with a particular SDB procurement:

(i) Any offeror for the specific SDB requirement whom the contracting officer has not eliminated for reasons unrelated to size;

(ii) The contracting officer; and

(iii) The responsible SBA Area Director for Government Contracting, the SBA Director, Office of Government Contracting, or the SBA Associate Administrator for Business Development;

(6) For SBA’s HUBZone program, the following entities may protest in connection with a particular HUBZone procurement:

(i) Any concern that submits an offer for a specific HUBZone set-aside procurement that the contracting officer has not eliminated for reasons unrelated to size;

(ii) Any concern that submitted an offer in full and open competition and its opportunity for award will be affected by a price evaluation preference given a qualified HUBZone SBC;

(iii) The contracting officer; and

(iv) The SBA Director, Office of HUBZone, or designee.

(7) For any unrestricted Government procurement in which a business concern has represented itself as a small business concern, the following entities may protest in connection with a particular procurement:

(i) Any offeror;

(ii) The contracting officer; and

(iii) The responsible SBA Government Contracting Area Director, the Director, Office of Government Contracting, or the Associate Administrator for Business Development.

Learn more about the CEO’s decision to file a size protest here.

For immediate help or questions about SBA size protest standing under 13 CFR Part 121.1001, call Watson & Associates government contract lawyers at  1866-601-5518 or contact us online. We offer a FREE Initial Consultation.