Size protests filed with the SBA are a “low risk-high reward” method of attacking small business set-aside competition if you think the contract awardee is actually other than small. Protests can be filed by just about any small business concern (so long as the challenger was an offeror on the contract) and have an extremely low evidentiary threshold.
Basically, if there is “some basis for the belief” that the competition is not small, you can set into motion a burdensome SBA investigation seeking a justification to disqualify.
But what do you do when you’re on the kicking end of this scenario? You know you are a legitimate small business – but you suddenly find yourself having to respond to detailed questions from the SBA and provide a truck load of documents to prove it. The Answer: Fight Back!
This exact situation recently played out for GaN Corporation – the apparent awardee of a $10 million Army task order in support of the Ballistic Missile Defense Evaluation Directorate. GaN’s award was challenged based on the claim that it was overly reliant on its large subcontractor and therefore affiliated under the “ostensible subcontractor rule.”
Seeking to clear its name and move forward with the award, GaN submitted evidence that it was capable of performing procurements that were significantly larger than the task order at issue – without assistance. The SBA disagreed and held that GaN was not a small business.
The small business continued to fight back – this time appealing the SBA’s decision to the Office of Hearings and Appeals.
OHA saw the light. The decision on appeal found that the SBA ignored and/or failed to understand the material information submitted by GaN in support of its size status. The case was therefore remanded for a new determination.
The lesson? Don’t be bullied. If you are a legitimate small business seeking set-aside work, chances are you’ll eventually be challenged through an SBA size protest. The best way to stay ahead of the game is to get and stay prepared.
Document your business practices and paper your files. Avoiding a disorganized scramble to respond to an SBA investigation is half the battle!