Appeal from an SBA decision finding that contractor was not a small business is denied. The SBA found that the contractor had violated the ostensible contractor rule because it was overly reliant on a subcontractor. The contractor argued that the SBA should have given greater to a filing in which the contractor had avowed that it would perform the majority of the work. But OHA ruled that the filing deserved no weight. Size is determined at the time a company submits its proposal. The contractor’s proposal indicated that the contractor relied almost entirely on its subcontractor. A post hoc filing submitted after the proposal had no bearing on the size determination.
The Department of Veterans Affairs issued a solicitation for home oxygen delivery services. The solicitation had a tiered evaluation scheme that favored service-disabled, veteran-owned small business. The VA selected Warrior Service Company, an SDVOSB, as the apparent awardee. Shortly thereafter, however, the contracting officer determined that Warrior was nonresponsible because it had no relevant experience and lacked financial resources necessary for the work. The CO found that the Warrior’s subcontractor would be providing most of the personnel and experience for the contract. The CO referred that matter to the SBA for a Certificate of Competency.
While the matter was pending before the SBA Area Office, Warrior submitted a document purporting to demonstrate its responsibility. In that document, Warrior avowed that it would self-perform the majority of the work on the contract, and that its subcontractor would only be performing a fraction.
The Area Office, however, found that, as of the date it submitted its proposal, Warrior was not a small business due to its affiliation with an ostensible subcontractor. SBA found that Warrior would not have been eligible for the award without its subcontractor. Warrior relied on the subcontractor for equipment, facilities, and financial assistance. Moreover, SBA found the primary and vital contract requirements—delivery and maintain of oxygen equipment—would be performed by the subcontractor. Warrior appealed the size determination to SBA’s Office of Hearing and Appeals.
On appeal, Warrior argued that SBA Area Office should have attached greater weight to the document it filed stating that it would perform a majority of the contract. The problem with the argument, OHA noted, was that size—and compliance with ostensible subcontractor rule—is determined as of the date the small business submits its proposal. Changes of approach occurring after the proposal deadline do not affect a size determination.
Here, Warrior’s proposal did not indicate that Warrior would perform the majority of the work. Indeed, other than managing the contract, the proposal did not assign any significant work to Warrior.
Warrior argued that it should not be found reliant on its subcontractor for equipment, facilities, financing, and technical expertise because it could have chosen to obtain that kind of assistance from multiple subcontractors. But OHA found that this argument failed because as of the proposal date, Warrior planned to obtain all its support from one subcontractor.
Warrior is represented by Frank V. Reilly
