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
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[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.