Does Anybody Really Care About Small Business Protests?
A recent size appeal decision by the Small Business Administration (SBA) Office of Hearings and Appeals (OHA) raises the question of whether SBA regulations are so slanted against protesters as to render size protests an exercise in futility. On November 5, the SBA OHA released a decision in Size Appeal of Wescott Electric Company, SBA No. SIZ-5691, 2015 WL 7307353.
The Wescott size protest concerned a Department of Veterans Affairs (VA) set-aside contract for replacement of a power supply system. After the VA identified a company called Innovative Support Solutions Inc. (ISS), as the apparent awardee, Wescott filed a timely size protest within the five–day protest period available for such protests. Wescott’s initial protest alleged that ISS was “in reality a Small Business front” for a larger entity, BEI, which would perform the work on the project. Wescott also alleged that ISS “will be using BEI to finance and perform the work and assets for obtaining the required bonding,” and asserted that ISS and BEI shared the same address and phone numbers in 2013. Wescott also maintained that ISS was affiliated with BEI through common management and the newly organized concern rule. The SBA area office rejected all of Wescott’s assertions, finding no affiliation between the two firms.
Wescott then appealed the denial to OHA. In Wescott’s appeal, the company also presented evidence from Redfin.com, the System for Award Management and the Federal Procurement Data System–Next Generation. The evidence showed that ISS’s sole owner previously was employed by BEI; that ISS and BEI did share the same business address until April 2013; and that ISS and BEI together had won seven contracts in the last two years, exceeding the limit specified by SBA’s “3-in-2” rule. The SBA OHA denied the appeal.
In denying the appeal, OHA refused to consider the additional evidence submitted by Wescott on procedural grounds. The SBA OHA noted that while it could consider new evidence on appeal with a motion showing “good cause,” the general rule is that appeals only will consider evidence presented to the area office. SBA OHA also found that all the evidence Wescott was presenting on appeal was available to Wescott at the time of the earlier filings. Additionally, Wescott did not file a motion to introduce the new evidence, nor did it explain why it had not earlier submitted the evidence. The SBA OHA also rejected Wescott’s claim that the area office should have discovered publicly available information, noting that it was the responsibility of the parties to submit evidence for consideration.
These conclusions raise the question of whether the SBA really cares to vindicate size status claims fairly. A size protester initially faces the difficult hurdle of beating the five–day clock to submit a fully supported size protest. On appeal, Wescott tried to point the SBA to government data, easily accessible to the SBA area office, that further supported its claims. But the OHA declined to consider this and denied Wescott a remand opportunity to have the government evidence reviewed. Yes, the government information was available to Wescott before the initial size protest, but it was equally available to the SBA area office.
Forcing a small business size protester to hit a dime from 500 yards with no time on the clock is not a remedy at all—it’s an illusion of a remedy. And, failing to provide the protester with any leave to consider the evidence or assistance, raises the question of whether anyone does care what the true size of a contractor may be.
Al Krachman Esq., is a partner with Blank Rome, LLP. He can be reached at krachman@blankrome.com.
