TITLE: B-298527, Technical Support Services, October 12, 2006
BNUMBER: B-298527
DATE: October 12, 2006
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B-298527, Technical Support Services, October 12, 2006

   Decision

   Matter of: Technical Support Services

   File: B-298527

   Date: October 12, 2006

   Ronald S. Perlman, Esq., Ralph C. Thomas, III, Esq., Susan W. Ebner, Esq.,
   and John J. Jacko, III, Esq., Buchanan Ingersoll & Rooney PC, for the
   protester.

   Robin Ray Coll, Esq., Naval Air Systems Command, and Lara H. Hudson, Esq.,
   United States Small Business Administration, for the agencies.

   Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Where protester's small business size status was challenged in protest to
   Small Business Administration (SBA), and SBA did not issue size
   determination within 10 days after filing, but ultimately it determined
   that protester did not qualify as small business, agency properly
   proceeded with award to another small business offeror, and was not
   required by applicable regulations to terminate that contract in order to
   make award to protester when SBA subsequently reversed size determination
   on appeal.

   DECISION

   Technical Support Services (TSS) protests the award of a contract to
   Quantell, Inc. under request for proposals (RFP) No. N00421-05-R-0114,
   issued by the Department of the Navy as a total small business set-aside
   for administrative and training services. TSS maintains that it is
   entitled to the award because, although the Small Business Administration
   (SBA) initially determined that TSS was other than small and thus
   ineligible for award, SBA's Office of Hearings and Appeal (OHA) reversed
   that determination. TSS concludes that the Navy, therefore, should be
   required to terminate Quantell's contract and make award to TSS.

   We deny the protest.

   The solicitation was issued on August 15, 2005. On December 19, the Navy
   announced that TSS was the intended awardee; on December 21, it forwarded
   protests challenging TSS's size status to the SBA Area 2 regional office;
   and on January 11, 2006, the regional office issued a determination
   finding that TSS was not a small business concern eligible for award.
   Subsequently, on January 24, the Navy announced that it intended to make
   award to Quantell. On that same date, TSS filed an appeal of the regional
   office's size status determination with OHA and provided the Navy with
   notice of the appeal. On February 14, OHA remanded TSS's size
   determination to the regional office for further deliberation; on March 16
   the Navy made award to Quantell; and, on March 20, the SBA regional office
   again found that TSS was not a small business concern. TSS again filed an
   appeal with OHA which, on June 20, sustained the appeal, finding that TSS
   was in fact a small business concern. On July 14, the Navy notified TSS
   that it would not terminate Quantell's contract in order to make award to
   TSS. TSS maintains that it is entitled to the award.

   The Federal Acquisition Regulation (FAR), the principal regulation
   governing federal procurements, provides as follows regarding situations
   where a protest challenging the proposed awardee's size status has been
   filed:

     After receiving a protest involving an offeror being considered for
     award, the contracting officer shall not award the contract until (i)
     the SBA has made a size determination or (ii) 10 business days have
     expired since SBA's receipt of a protest, whichever occurs first.

   FAR sect. 19.302(h)(1). SBA's regulations similarly recognize the 10-day
   period for making a decision. See 13 C.F.R. sect. 121.1009(a) (2006).

   Here, the protests challenging TSS's size status were forwarded to SBA on
   December 21, and TSS acknowledges that SBA contacted it for information
   regarding its size status on December 22. Protester Response to Dismissal
   Request at 3. This being the case, the Navy was permitted to make an award
   to Quantell after January 9, that is, 10 business days later. Since the
   agency made award to Quantell on March 16, which is more than 50 business
   days after the size protests were received by SBA, the award was
   permissible under the applicable regulations. FAR sect. 19.302(h)(1);
   Planned Sys. Int'l, Inc., B-292319.7, Feb. 24, 2004, 2004 CPD para. 43 at
   2. In accordance with FAR sect. 19.302(i), the OHA ruling received by the
   agency after award did not apply to the protested acquisition. See also 13
   C.F.R. sect. 121.1009(g)(3) (OHA decision received after award does not
   apply to the current procurement).[1] Since the award was made in
   accordance with the FAR and SBA regulations, and since OHA's decision on
   appeal did not apply to the procurement, the agency was not required to
   terminate Quantell's contract in favor of an award to TSS.

   In comments filed in response to a request by our Office, SBA posits that
   OHA's remanding of the first regional office determination (finding TSS
   other than small) in effect vacated that decision; it goes on to reason
   that, since the agency made award to Quantell on March 16, prior to SBA's
   March 20 final determination that TSS was other than small, the award was
   improper. SBA concludes that, since there was no proper award in place at
   the time TSS filed its appeal, OHA's appeal decision applied to this
   procurement, and the agency, therefore, is required to terminate
   Quantell's contract and make award to TSS. See FAR sect. 19.302(i). We do
   not agree with SBA's position. The SBA's regulations state that an OHA
   decision received after award does not apply to the procurement and will
   have future effect. 13 C.F.R. sect. 121.1009(g)(3). Furthermore, the
   regulations do not in any way suggest that OHA's decision to remand the
   regional office determination, made subsequent to the award to Quantell,
   has any bearing on the propriety of the award. SBA's position ignores the
   fact that, as discussed above, the award to Quantell was made more than
   10 days after the size protests were received and, therefore, was
   permitted under the explicit terms of the FAR, whether or not a final size
   determination had been issued at the time of award.

   TSS similarly maintains that there was no valid award to Quantell, citing
   FAR sect. 19.302(g)(2), which provides that an award to another offeror
   will only be "presumed to be valid" if it is made before the contracting
   officer receives notice that the originally intended awardee had appealed
   a negative size status decision. According to TSS, since the Navy made
   award to Quantell after it received notice of TSS's appeal of the first
   negative size status determination (the one that thereafter was remanded
   by OHA), the award to Quantell is not presumed valid. Again, however, this
   argument ignores the fact that the agency was permitted to proceed with
   the award to Quantrell because more than 10 days had passed since the size
   protests were received by SBA. While the intended effect of the "presumed
   to be valid" language in FAR sect. 19.302(g)(2) is not clear, there is no
   indication that it should be read as negating the clear language in FAR
   sect. 19.302(h)(1).[2]

   TSS argues that, under FAR sect. 19.302(h)(3), the procuring agency is
   obligated to notify SBA if it is making award before a size determination
   is received; TSS maintains that the Navy failed to do so and that the
   award to Quantell, therefore, was invalid. While the record does not
   indicate that the Navy specifically advised SBA that it planned to make
   award to Quantell before it received the size status determination, the
   Navy reports that it in fact contacted SBA before making the award and, on
   March 14, was told by SBA that it was finalizing its second determination
   that TSS was not small and that the Navy should proceed with the award.
   Agency Comments on SBA Response at 5-6.[3]

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

   ------------------------

   [1] TSS cites MTB Investments, Inc., B-275696, Mar. 17, 1997, 97-1 CPD
   para. 112, in support of its claim that termination is called for here.
   However, the facts there were materially different from those here.
   Whereas the Navy complied with applicable regulations here, the
   contracting officer in MTB determined that the protester, MTB, was not a
   small business concern, and made award to another offeror without sending
   the matter to SBA for a size determination, as required by the FAR. Based
   on this violation of the FAR, we sustained the protest and recommended
   that the agency refer the matter to SBA and terminate the award if SBA
   determined that MTB was a small business concern.

   [2] Notably, the "presumed to be valid" language appears to be
   inconsistent with FAR sect. 19.302(i) and 13 C.F.R. sect. 1009(g)(3),
   provisions which clearly state that an appeal decision by OHA does not
   apply to a procurement where the decision is received by the agency after
   an award has been made. In this regard, we have previously considered this
   provision and have concluded that if an agency makes award (that is
   otherwise consistent with applicable regulations) before it receives an
   appeal decision from OHA, the award is valid even where the agency had
   notice that an appeal was being filed. Suddath Moving Sys., Inc.,
   B-229992, Apr. 1, 1988, 88-1 CPD para. 332 at 2.

   [3] TSS also argues that, under FAR sect. 19.302(h)(2), the Navy was
   required to determine that further delay would be disadvantageous to the
   government before it made award to Quantell. We need not decide whether
   TSS's interpretation of this regulation is correct since, even assuming
   that it is correct, the record indicates that the agency had an urgent
   basis for making the award.