Size appeal decision for EPA BPA OECA OC IT Systems Support Services task award is reversed

On December 15, 2023, the U.S. Small Business Administration (SBA) Office of Government Contracting — Area IV (Area Office) issued Size Determination No. 04-2024-008, concluding that LinTech Global Inc. (Appellant) is not a small business for the subject task order issued against a U.S. General Services Administration (GSA) Federal Supply Schedule (FSS) contract. On appeal, Appellant contends that the size determination is clearly erroneous, and requests that SBA’s Office of Hearings and Appeals (OHA) reverse or remand. For the reasons discussed infra, the appeal is granted and the size determination is reversed…

On October 31, 2023, an unsuccessful offeror, Plateau Software, Inc. (Plateau), filed a size protest alleging that Appellant is not small. On November 16, 2023, the Area Office issued Size Determination No. 04-2024-004, dismissing Plateau’s protest as untimely. The Area Office found that the TORFP did not require recertification, and as such, a size protest would have been due by December 9, 2020, five business days after Plateau knew, or should have known, that Appellant had been awarded the underlying FSS contract. (Size Determination No. 04-2024-004, at 1-2.) The Area Director, however, initiated her own size protest against Appellant, adopting portions of Plateau’s allegations. (Area Director’s Protest at 1.) The Area Director explained:

*2 During the fact-finding phase of the aforementioned size case 04-2024-004, [[Appellant] provided [the Area Office] with information pertaining to their required notification to the contracting officers from [GSA] and [EPA] for their contract vehicles 47QTCA21D0029 and 68HERD22A0003, respectively, regarding a change in ownership as required by FAR 52.219-28 and 13 CFR 121.404(g). [Appellant] notified each agency that it was other-than-small (OTS) by informing the agencies of the recent change in ownership, and by referencing their revised System for Award Management (SAM) representations and certifications, which indicated that they were OTS as a result of the change in ownership.

*2 (Id.) Due to its acquisition by DISYS, Appellant “appears not to have been eligible to participate in any future orders as a small business” once it recertified as other than small following the acquisition. (Id.) Because Appellant was no longer small at the time Appellant submitted a proposal for the TORFP, “it is appropriate to question [Appellant’s] size and eligibility to participate in the TORFP as a small business.” (Id. at 2.)…

SBA believes that size and status should flow from the underlying MAC to individual orders issued under that MAC, and the firm can continue to rely on its representations for the MAC itself unless a contracting officer requests recertification of size and/or status with respect to a specific order. SBA makes that revision in this final rule….

In the case of a merger, acquisition, or sale which results in a change in controlling interest under § 121.103, … the contractor must, within 30 days of the transaction becoming final, recertify its small business size status to the procuring agency, or inform the procuring agency that it is other than small. If the contractor is other than small, the agency can no longer count the options or orders issued pursuant to the contract, from that point forward, towards its small business goals. The agency and the contractor must immediately revise all applicable Federal contract databases to reflect the new size status….

Appeal

*8 On, January 2, 2024, Appellant filed the instant appeal. Appellant maintains that its recertification following an acquisition did not preclude Appellant from the award of the task order. (Appeal at 5.)

*8 Appellant maintains, first, that the Area Office misinterpreted 13 C.F.R. § 121.404(g). (Id.) In Appellant’s view, the Area Office “chose to ignore key words” in the regulation — that the enumerated sections (1), (2), and (3) “only apply to the exercise of options under the base contract”. (Id. at 7.) According to Appellant, “[t]his provision [i.e., § 121.404(g)] simply states that the life of the contractor’s designation as a small business under its base contract can end upon an agency’s decision to exercise an option, if there is an acquisition under (g)(2).” (Id.) Here, Appellant’s FSS contract “is not at an option period”. (Id.) Moreover, “SBA would have surely” stated in the regulation if its intent had been to prevent businesses that become other than small during the duration of a long-term contract from competing for small business task orders. (Id.)…

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