Before addressing SBA Size and Status Protests, it is important for you to understand the concept of the government set-aside and qualifying as a small business.
What is a small business set-aside?
The Government exerts its best efforts each year to award a certain percentage of new contracts by limiting some procurements to small businesses. These procurements are typically referred to as ?set-asides? and competition is limited to small businesses. The best starting place for learning more about the program is the SBA at SBA.GOV.
How does the Federal Government determine if a business is small?
A small business is defined as a business that:
Is organized for profit,
Has a place of business in the United States,
Operates primarily in the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor,
Is independently owned and operated, and
Is not dominant in its field on a national basis.
As this definition is not very clear, the SBA issues a Table of Size Standards using the North American Industry Classification System (NAICS). The NAICS is list of various business types with numerical codes assigned to each type.
The SBA publishes a Table of Size Standards which sets a small business size limit for each NAICS code. The size limit for each code is based on the average value of sales over the past three years or the number of employees. If your company does not exceed the limit set for the NAICS code applicable to your business, you are qualified to submit bids or proposals for small business set-asides. The Table of Size Standards is available at the SBA website.
When an Agency issues a procurement limited to small businesses, it identifies the NAICS code of businesses eligible to bid. If your company has the NAICS code required for the project and does not exceed the annual sales or employee size for the NAICS code you are eligible to submit a bid or proposal.
Is there more than one classification of small business?
Yes. An agency may limit procurement to any one of the following categories of small businesses:
Small Business – open to any qualifying small business
8(a) – limited to businesses owned and controlled by ?socially and economically disadvantaged small businesses certified under Section 8(a) of the Small Business Act?
Minority-Owned Small Business
Woman-Owned Small Business
Veteran-Owned Small Business Service Disabled Veteran-Owned Small Business
HubZone (historically underutilized business zone) Small Business
To learn more about these programs, click here to get to the SBA website.
Are there any special requirements to be considered a small business?
Yes, with the exception of the ?plain? small business, the business must be owned (51% or more of the stock/shares) and controlled on a daily basis by the individual that qualified the business for one of the above categories.
Is there anything I can do if I believe the company that won a contract set-aside for small business does not qualify?
Yes, you can file a protest with the Contracting Officer. The Contracting Officer will forward it to the SBA Area Office which will conduct an evaluation.
If you file a protest, you must identify the specific reason(s) you believe the business should be disqualified. The Contracting Officer is not required to forward a size/status protest to the SBA based on unsupported allegations.
Is there a time limit for filing a size/status protest?
A protest must be filed no later than the close of business on the fifth day (not counting weekends and legal holidays) after the contracting officer has notified you of the prospective awardee.
Do I need an attorney to file a size protest?
No, but you should consult with an attorney as soon as you suspect you may have a basis for filing a protest. While there is no specific form for filing a protest, if your protest includes specific details and an explanation as to why the Awardee does not qualify, it is more likely your protest will succeed.