The SBA Proposes to Change the Rules for Size & Status Bid Protests

Blog
October 10, 2022

The SBA Proposes to Change The Rules for Size & Status Bid Protests.

In many cases, either intentionally or inadvertently, contractors win set-aside procurements for which they do not qualify under the size standard or status. This results in actual small businesses being deprived of work that was legally set-aside for them. To a large degree, the government relies on the bid protest system to prevent the award of set-aside contract to unqualified firms. Therefore, to prevent the award of set-aside contracts to unqualified firms, all small businesses should be aware of the changes to the size and status protest regulations being proposed by the Small Business Administration. The most significant parts of the proposed rule are summarized below.

  1. Sealed Bid Awards

If the winner of a FAR Part 14 Sealed Bid set-aside contract is disqualified due to a size or status protest, the contract is then awarded to the next lowest bidder. Currently, the SBA regulations do not address whether a size or status protest can be filed against the award of the contract to the next lowest bidder. The proposed rule would allow firms to protest the size or status of the next lowest bidder if the protest was filed within five (5) business days after notice of the identity of the next lowest bidder.

  1. Who can file a protest?

Currently the various small business programs have inconsistent rules regarding who is eligible to file a size or status protest. The proposed rule would standardize the rule such that any offeror that has not been eliminated from consideration for any procurement-related reason could file a size or status protest.

  1. GAO Protests Stay Size and Status Protests

In some cases, an award will be protested in both the General Accountability Office (GAO) and the SBA. Per the proposed rule, SBA will suspend the size and status protest until such time as the GAO issues a decision. If the Agency takes corrective action, the SBA will dismiss the size and status protest as “overcome by events.” Another size and status protest can be filed after the contract is re-awarded. If the GAO denies the protest, then the SBA will begin to review the size and status protest.

  1. Small Disadvantaged Business (SDB) Protests

Since the demise of the SDB set-aside program, firms have not had a venue for protesting an awardee’s SDB status. The proposed rule would allow the SBA to review the SDB status of any firm that represented itself as an SDB on a prime or subcontract based on the receipt of credible information. The rule would allow the SBA or the contracting officer to protest the SBD status of a subcontractor. If the protest is upheld, the prime contractor would not be able to include payments made to that firm as counting toward their subcontracting plan’s SDB goals.

For any additional compliance questions please reach out to Aronson’s Experts at govconhelp@aronsonllc.com.

 

Tom Marcinko

Principal, Consulting Services