Appeal of the dismissal of two size protests is denied, where the SBA area office properly dismissed the size protest filed by the appellant’s subsidiary because it was not an interested party and where the area office properly dismissed as untimely the appellant’s attempted amendment of its subsidiary’s protest to substitute appellant’s name for that of its subsidiary, where the attempt was filed more than five days after notice of award.
Conrad Shipyard LLC appealed the dismissal of two size protests by the Small Business Administration area office. The Department of Transportation awarded a contract for the construction of an ice-breaking tugboat to Gulf Island Shipyards LLC. The contract was set aside for small businesses with NAICS code 336611, Ship Building and Repairing, with a size standard of 1,250 employees.
The first protest was timely filed by Conrad’s subsidiary, Conrad Orange Shipyard Inc. Five days later, and 12 days after notice of award, Conrad filed what it styled an amendment to Conrad Orange’s protest seeking to substitute itself for Conrad Orange. The area office dismissed Conrad Orange’s protest because Conrad Orange was not an offeror and thus not an interested party. The area office also dismissed Conrad’s amendment, finding it to be an untimely protest.
On appeal, Conrad argued that the dismissals were improper, because its amendment was not an attempt to change the protester outside the five-day protest window, but merely the correction of a minor clerical error. Conrad argued that the Area Office incorrectly disregarded the law allowing the amendment of original filings. Conrad cited to Rule 15 of the Federal Rules of Civil Procedure, which allows amendments to pleadings. Conrad also cited the regulations of the Office of Hearings and Appeals, which permit the amendment of original filings to remedy discrepancies when doing so will not prejudice other parties.
Further, Conrad argued that the area office disregarded an earlier finding in a size protest stemming from a related procurement in which the area office determined that GIS exceeded the 1,250-employee size standard. Conrad asserted that Conrad Orange was an interested party, because as a subsidiary of Conrad it had a direct economic interest in the award. Finally, Conrad argued that the dismissal of the protests contradicted SBA’s mission to assist small businesses.
GIS argued that Conrad Orange was not an interested party because it had no connection to the solicitation. Further, GIS asserted that the area office properly determined Conrad’s amendment to be a separate, untimely size protest. The amendment was in fact a filing by a completely different entity and could not be considered a correction of a minor clerical error.
OHA held that only an interested party may file a size protest, and that an interested party must be an offeror. Because Conrad Orange was not an offeror, it was not an interested party and had no standing to protest. OHA then considered whether the area office should have allowed Conrad to amend the earlier filing. OHA first noted that the Federal Rules of Civil Procedure do not control SBA proceedings. In addition, although OHA’s regulations allow amendment of original filings, the regulations do not permit such amendments in size determinations at the area office level. Further, although OHA may allow amendments to a filing, it does so at its discretion. OHA found no basis to question the area office’s decision not to allow Conrad’s requested amendment.
OHA also held that Conrad was not permitted to amend the original protest after the filing deadline, explaining that substitution of a party was not a minor clerical error but a “major alteration.” Further, although Conrad Orange’s protest was timely, Conrad’s was not. And while Conrad argued that its own filing did not have sufficient detail to be considered a viable protest, and so was clearly an amendment to Conrad Orange’s protest, OHA held that the area office determined only that Conrad’s filing was an untimely protest, not that it was a sufficient protest.
OHA found no basis to allow Conrad’s subsidiary to protest on its behalf, or that such a prohibition ran counter to SBA’s mission. OHA held that SBA’s mission was guided by regulations that must be applied equally and fairly. OHA denied Conrad’s appeal of the dismissal of both protests.
Conrad Shipyard LLC is represented by Karl Dix, Jr. and Garrett E. Miller of Smith, Currie & Hancock, LLP. Gulf Island Shipyards LLC is represented by Jonathan T. Williams, Jacqueline K. Unger, and David J. Medalia of PilieroMazza, PLLC.
