A disappointed bidder challenged the awardee’s size, alleging affiliation. The SBA asked the awardee to provide tax returns for the alleged affiliates. The awardee didn’t’ provide all the returns. The awardee contended some of the returns were not completed. The SBA drew an adverse inference and concluded the awardee wasn’t small. OHA affirmed. Even if tax returns are unavailable, a challenged firm must provide other available financial information. Aside from some incomplete calculations, the awardee hadn't provided other information.
Size Appeal of Rigid Constructors, LLC, SBA No. SIZ-6193
Background
The Army Corps of Engineers solicited bids for river bank stabilization. The procurement was set aside for small businesses. After opening bids, the Corps announced Rigid Constructors was the awardee.
An unsuccessful bidder filed a size protest. The protester alleged Rigid was affiliated with at least 37 other concerns.
The SBA Area Office asked Rigid to submit tax returns for the all the alleged affiliates. Rigid only submitted returns for some of the alleged affiliates. Rigid said the returns for other affiliates were not yet completed.
The missing returns did not sit well with the Area Office. Indeed, the Area Office drew an adverse inference from this missing returns. The Area Office assumed the missing returns would’ve have shown affiliation. Accordingly, Rigid was not small.
Rigid appealed to the SBA’s Office of Hearings and Appeals.
Analysis
OHA affirmed. If the SBA requests tax returns, but the returns are not available, then the challenged firm must provide “other available information,” like complete financial statements. Here, Rigid had failed to produce other available information. Instead, Rigid had performed its own calculations of receipts of some—but not all—alleged affiliates. Rigid didn’t provide information to support those calculations. The Area Office rightly drew an adverse inference.
Rigid is represented by Eric B. Landry and Murphy J. Foster of Breazeale, Sasche & Wilson, L.L.P.
--Case summary by Craig LaChance, Senior Editor
SBA - Rigid Constructors LLC