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Missed Size Protest Window Due to Missing Information


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Hi All,

All the windows have passed, so this is more information seeking on how to handle similar issues in the future.

As part of a multiple-award IDIQ that was set aside entirely for small business, we and the other awardees received our pre-award notification back in January. Not unusually, there were several JVs included and some other businesses of unclear disposition. No additional socioeconomic classification information was provided in the notification, which normally should be fine since that information is required in the SAM.gov registration. Based on the names and information provided in the notification, we were unable to find documentation for one of the businesses, and another business was apparently just a new small business based on the SAM.gov registration.  Because we were expecting a specific large business to try to JV with a small business to access the contract, we did some digging into the two businesses that were not clear in their origin. With some significant sleuthing, we were able to find that the 'new' business was actually a JV, but who did not provide their ownership information in their SAM.gov registration information or FAR report. Some of the pertinent information that would have been more easier to find had the ownership information been included was that the small business member of the JV was founded by a director level employee and another senior manager of the large business while they were still employed by the large business, which would have raised a flag regarding potential affiliation.

From what I understand, there is no provision in the FAR allowing for protests to be submitted after 5 days past the pre-award notification simply because the information necessary to know whether a size protest is appropriate or not. It also appears that the SBA can't or won't take action on their own unless a formal protest is submitted in a timely manner. What is the remedy to avoid such situations in the future? It is pretty rare that we have the sort of advanced information that let us know that this was a possibility and the time to do enough investigation to actually figure this out, so having an approach that would make it more readily apparent who the owners are or just lower the bar for filling in the missing information without antagonizing or just bothering the CO would be great. Or is this just a situation where you have to hope that the CO is really on the ball (I don't think the amount of investigation necessary to uncover the potential affiliation would be a reasonable expectation of a CO)?

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16 hours ago, Salus said:

Some of the pertinent information that would have been more easier to find had the ownership information been included was that the small business member of the JV was founded by a director level employee and another senior manager of the large business while they were still employed by the large business, which would have raised a flag regarding potential affiliation.

Have you tried contacting the SBA? If you think that there is evidence of misrepresentation of small business status involved in a contract award, I would think that you could discuss it with the SBA and/or the contracting agency, without filing a protest..

it See for instance, this link from the WIFCON.com homepage: https://www.justice.gov/usao-edva/pr/government-contractors-agree-pay-39-million-resolve-claims-misrepresenting-women-owned

i googled “Department of Justice misrepresentation of small business status”.  This was was one of several hit that came up

https://www.insidegovernmentcontracts.com/2022/06/doj-settlement-underscores-the-significance-of-incorrect-small-business-representations/

Here is another one referring to the SBA’s Code of Federal Regulations at 13 CFR 121.108:

https://www.law.cornell.edu/cfr/text/13/121.108

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18 hours ago, Salus said:

... we and the other awardees received our pre-award notification back in January.

There is a question as to whether you are an interested party as an awardee and would have standing to protest.

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My read of the regulation suggests a CO may question the representation at anytime so Joel's suggestion to contact the CO might work.

Truly a egregious representation.  Maybe the agency OIG?   Maybe your congressional representatives?

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9 hours ago, bosgood said:

There is a question as to whether you are an interested party as an awardee and would have standing to protest.

Protest isn’t necessarily the only avenue applicable to allegations of misrepresentation of business size/status.

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I would tread lightly until you have more information.  By that I mean just limiting actions to conversations with SBA, the CO, and maybe senior contracting at the agency level.  The JV might be totally legit - perhaps the small business owners formed the company and planned to resign from the large business if they received a contract.  I don’t know whether or not it’s proper but SBA should be able to shed light on it.  This must have happened before.

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On 3/1/2024 at 11:07 AM, joel hoffman said:

Have you tried contacting the SBA? If you think that there is evidence of misrepresentation of small business status involved in a contract award, I would think that you could discuss it with the SBA and/or the contracting agency, without filing a protest..

it See for instance, this link from the WIFCON.com homepage: https://www.justice.gov/usao-edva/pr/government-contractors-agree-pay-39-million-resolve-claims-misrepresenting-women-owned

i googled “Department of Justice misrepresentation of small business status”.  This was was one of several hit that came up

https://www.insidegovernmentcontracts.com/2022/06/doj-settlement-underscores-the-significance-of-incorrect-small-business-representations/

Here is another one referring to the SBA’s Code of Federal Regulations at 13 CFR 121.108:

https://www.law.cornell.edu/cfr/text/13/121.108

Thanks for this! We have tried reaching out to the SBA over the past month an a half (at all of the Mentor-Protégé Program email addresses because that paperwork also appears to have been filed while they were employed by the large business). We have not received any sort of response from them. I also reached out to our state office, who thought it was worth checking out but that it would have to come from the CO. But the information you have provided does at least indicate that it is taken seriously if we can talk to the right people.

I did try bringing it up with the CO by asking if this situation would raise potential affiliation issues, but they referred me to the SBA...

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2 hours ago, formerfed said:

I would tread lightly until you have more information.  By that I mean just limiting actions to conversations with SBA, the CO, and maybe senior contracting at the agency level.  The JV might be totally legit - perhaps the small business owners formed the company and planned to resign from the large business if they received a contract.  I don’t know whether or not it’s proper but SBA should be able to shed light on it.  This must have happened before.

Thanks, that is always good advice. We are definitely trying to stay away from making any accusations, but there is enough information (or missing information such as recently deleted employment history) that we think it warrants double checking by the SBA. The information was hard enough to find that we can see how it could have been missed on the first pass of checking based on the submitted paperwork. 

We have a contract ombudsman. Do you think it would be worth reaching out to them to see if they might have better luck tracking someone down at the SBA, or should we limit our conversations to the CO for now?

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1 hour ago, Salus said:

We have a contract ombudsman. Do you think it would be worth reaching out to them to see if they might have better luck tracking someone down at the SBA, or should we limit our conversations to the CO for now?

It might be worth it.  I’ve always found the best way to pursue these issues, at least initially, is through informal dialog.  I know SBA is very slow to act and even reluctant or suspicious to do much at all unless a formal request is made.  Do you have any relationships within SBA or through an agency small business representative?  SBA people seem to provide advice and personal insights off the record though.  

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On 2/29/2024 at 4:39 PM, Salus said:

we were unable to find documentation for one of the businesses, and another business was apparently just a new small business based on the SAM.gov registration.  Because we were expecting a specific large business to try to JV with a small business to access the contract, we did some digging into the two businesses that were not clear in their origin. With some significant sleuthing, we were able to find that the 'new' business was actually a JV, but who did not provide their ownership information in their SAM.gov registration information or FAR report. Some of the pertinent information that would have been more easier to find had the ownership information been included was that the small business member of the JV was founded by a director level employee and another senior manager of the large business while they were still employed by the large business, which would have raised a flag regarding potential affiliation.

@Salus, Perhaps I do not understand the situation you are describing. I don't know why an awardee under multiple awards can not submit a protest within 5 days asking for formal determination of the small business status of another awardee based on "information and belief." You seem to have relevant  information about the status. But, as a practical matter, if the determination is made that the other awardee was not qualified for the status, the Agency would just award to the next qualified status bidder in line. So, why would you protest no matter what information you have, and what SBA process is there to fix???

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2 hours ago, Neil Roberts said:

@Salus, Perhaps I do not understand the situation you are describing. I don't know why an awardee under multiple awards can not submit a protest within 5 days asking for formal determination of the small business status of another awardee based on "information and belief." You seem to have relevant  information about the status. But, as a practical matter, if the determination is made that the other awardee was not qualified for the status, the Agency would just award to the next qualified status bidder in line. So, why would you protest no matter what information you have, and what SBA process is there to fix???

We can't protest solely because we missed the 5-day window. The list of apparent awardees only included the JV name, and their SAM.gov registration information didn't list the businesses who owned the JV. This made it extremely difficult to find the ownership information that would have been used to make a decision about whether to make a size status protest within those 5 days. We just don't have the resources to devote to the level of effort necessary to dig through and find that information for more than 20 businesses in that short of a period, especially when that is the first time we see the companies who have submitted proposals.

We would protest because we don't want to be forced to compete with a very large business (at least for our NAICS) under a contract fully set aside for small businesses. Also, there were fewer qualified bidders than there were available spots, so there was not another company that would have taken their place. The pool would have just been smaller, but we also would benefit from having one less large business competing in the small business set aside even if there had been another small business ready to take their place.

Ideally, the SBA process to fix would either have a better or more thorough review process (additional resources for the SBA) or a better mechanism by which to raise the issue with the SBA since they have not responded to email inquiries for more than a month.

All we really want is a more thorough check from the SBA based on the information we were able to gather, or that the CO would take the ball and run with it on getting it double checked.

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@Salus, ownership information of a JV may be available quickly through products of one or more companies such as Dun & Bradstreet (from the prime contract side, I can tell you we used such reports extensively in evaluating suppliers).

If you have not already done so, I suggest you review SBA final rule dated April 27, 2023. It is 54 pages including clarifying JV certification requirements, JV limitations and many other changes.  Proposed JV changes to FAR are in process. See https://www.federalregister.gov/documents/2023/04/27/2023-07855/ownership-and-control-and-contractual-assistance-requirements-for-the-8a-business-development 

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@Neil Roberts, thanks. It didn't occur to me to check DUNS before, but I just ran a check and they don't appear to be registered with DUNS (the registered for federal contracting after the transition to the Unique Entity ID). Since it is no longer required for federal contracting, I may have to look into other companies that offer that service (recommendations would be appreciated!) However, their ownership information is also not available through their CAGE code/Defense Logistics Agency information.

I was somewhat familiar with the new regulations from some summary articles, but it is good to read through the FR notice. The clarification of the 2 year period without automatic affiliation is an improvement over the previous word soup, and all of the JVs that were awarded the IDIQ fell within the 2 year period. I couldn't find information about upcoming proposed changes, but I will definitely keep my eye out for them. 

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How about a Freedom of Information Act request to the agency for the applicable registration details? You mentioned the contract ombudsman…

 

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