Appeal Granted by SBA Office of Hearings and Appeals (OHA) for Navy requirement Size Determination

ID: SBA No. SIZ-6271, 2024 (S.B.A.), 2024 WL 1254598

Background

On June 1, 2018, the U.S. Department of the Navy (Navy) issued Request for Proposals (RFP) No. N00178-18-R-7000 for the SeaPort — Next Generation (SeaPort-NxG) MAC. The RFP explained that SeaPort-NxG would be a multiple-award, indefinite-delivery/indefinite-quantity (ID/IQ) procurement for engineering and program management services. (RFP at 7.) The Contracting Officer (CO) assigned North American Industry Classification System (NAICS) code 541330, Engineering Services, with the exception for Military and Aerospace Equipment and Military Weapons. The RFP stipulated that the Navy would conduct “no evaluation of contract price and/or cost”, and offerors were not asked to provide pricing information in their proposals. (Id. at 57, 63.) Offers were due July 2, 2018.

SeaPort-NxG was not set aside or restricted to small businesses at the contract level, and the RFP explained that the Navy planned to award contracts to “each and all qualifying offerors.” (Id. at 13-14, 63.) Offerors were instructed, however, to identify their size status, and the RFP stated that “[c]ontractors will be required to recertify at the 5 year Option renewal” while “[r]epresentations of WOSB, SDVOSB, 8(a) and HUBZone shall be monitored for award eligibility in set-asides at the Task Order level.” (Id. at 14.) For individual task orders issued against the SeaPort-NxG MAC, the Navy might “conduct unrestricted competition [or] elect to restrict competition for Task Orders totally to Small Businesses, Service Disabled Veteran Owned Small Businesses (SDVOSB), Women-Owned Small Businesses, 8(a) Businesses, or HubZone Businesses.” (Id. at 11.) Furthermore, “[t]o be eligible as a Small Business, Service-Disabled Veteran Owned Small Business (SDVOSB), Women-Owned Small Business, 8(a) Business, or HubZone Business during the competitive ordering process, the Offeror must have had that status at the time of Task Order proposal submission.” (Id.) The SeaPort-NxG RFP incorporated by reference Federal Acquisition Regulation (FAR) clause 52.219-8, “Utilization of Small Business Concerns (NOV 2016)”. (Id. at 24.)

On January 2, 2019, the Navy awarded a SeaPort-NxG prime contract to Appellant. Appellant self-certified as a small business at the SeaPort-NxG contract level.

Discussion

Appellant has the burden of proving, by a preponderance of the evidence, all elements of the appeal. Specifically, Appellant must prove the size determination is based upon a clear error of fact or law. 13 C.F.R. § 134.314. OHA will disturb an area office’s size determination only if, after reviewing the record, the administrative judge has a definite and firm conviction that the area office erred in making its key finding of fact or law. Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-4775, at 11 (2006).

The key issue presented here is whether Appellant was required to recertify its size when competing for the subject task order in 2022. The issue is critical because, if recertification was not required, Appellant was entitled to rely upon its contract-level size certification, and there is no dispute that Appellant is small at the SeaPort-NxG contract level. Section II.A, supra. Upon review of the record, the parties’ arguments, and the regulatory history surrounding applicable SBA regulations, I must agree with Appellant and the CO that recertification was not required for the instant task order. This appeal must therefore be granted.

Decision

On December 19, 2023, the U.S. Small Business Administration (SBA) Office of Government Contracting — Area II (Area Office) issued Size Determination No. 02-2023-049, concluding that Imagine One Technology & Management, Ltd. (Appellant) is not a small business for the subject task order. The Area Office found that Appellant was required to recertify its size for the task order, because the task order was set-aside for small businesses but the underlying Multiple-Award Contract (MAC) was unrestricted. On appeal, Appellant maintains that the size determination was clearly erroneous, and requests that SBA’s Office of Hearings and Appeals (OHA) reverse. For the reasons discussed infra, the appeal is granted and the size determination is reversed.

OHA decides size determination appeals under the Small Business Act of 1958, 15 U.S.C. § 631 et seq., and 13 C.F.R. parts 121 and 134. Appellant filed the instant appeal within 15 days of receiving the size determination, so the appeal is timely. 13 C.F.R. § 134.304(a). Accordingly, this matter is properly before OHA for decision.

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