A disappointed bidder challenged an awardee’s size. The SBA asked the awardee for additional information on its affiliates. The awardee’s response was less than fulsome. SBA drew an adverse inference, concluding the awardee was not small.
Size Appeal of Portacool, LLC, SBA No. SIZ-6251
- Protest – The agency awarded the appellant a contract. A disappointed bidder filed a size protest. The protest alleged the appellant had been acquired by a large business and thus was affiliated with that business.
- SBA Finds Appellant Is Not Small – The SBA Area Office asked the appellant to provide information in response to the protest, including organizational documents, an explanation of relationships between affiliates, teaming agreements, and SBA Form 355. The Area Office was unhappy with the appellant’s response to the request. The appellant disclosed it was owned by another company, but it did not disclose the owners of that company. The appellant did not coherently respond to the protest allegations, didn't provide information on affiliates, SBA form 355 was incomplete, and other documents lacked detail. The Area Office drew an adverse inference and found the appellant was not small.
- Adverse Inference – On appeal, OHA noted that a challenged firm bears the burden of establishing its size. If a firm doesn’t provide information in response to a size protest, SBA may draw an adverse inference and conclude the company is not small. OHA has a three factor adverse inference test: (1) the information sought by SBA was relevant to a size determination, (2) the information is connected to the protested entity, and (3) the SBA’s request for information was specific. Here, all three elements were met. In particular, the appellant had disclosed it was owned by another entity, but it failed to disclose information about other concerns that may be owned or controlled by its parent company.
The appellant is represented by Seth J. Moen and Tiffany S. Beerman of Dvorak Law Group, LLC.
--Case summary by Craig LaChance, Senior Editor