Do You Meet SBA Size Standards Requirements? Our SBA lawyers can help you to avoid some of the most costly mistakes when bidding on federal government small business contracts. Help for small federal contractors in all states.
Small business size standards imposed and regulated by the Small Business Administration (SBA) are the standard that all small government contractors should be aware of. Calculations should be reviewed industry by industry. This is the most important part of doing business with the federal government. The United States SBA Size standards (industry classification system NAICS) are critical because any violation of the regulations can cause a company to lose the awarded federal contract.
Whether or not you meet the federal NAICS small business size standards becomes an issue when your competition files a small business size protest to the Contracting Officer. You are then left to defend yourself and show proof of annual receipts in addition to providing numerous business contracts and documents requested by the SBA.
Having SBA size standards lawyers and OHA Size Appeal lawyers that understand affiliation regulations and the Ostensible Subcontractor Rule is critical to protecting your company’s rights to lucrative government contracts. More importantly, when the SBA issues an adverse size determination decision, you want a law firm that can uncover legal errors in the SBA’s analysis and ultimate decision.
With law offices in Washington, DC and Denver, Colorado, the SBA lawyers at Watson & Associates, LLC frequently help companies facing an adverse size determination decision. As former government contracting staff members or attorneys, we have the unique experience of being able to sift through the legal errors from the SBA, and then presenting them concisely in OHA appeals cases.
Reasons for Violations of SBA Size Standards Regulations
The most common cause of violating the SBA small business standards is relying too heavily on a proposed teaming partner or subcontractor when you submit a government contract bid. Many companies may not be aware of the underlying rules. However, having a reliable and experienced government contract small business attorney can be helpful and save tens of thousands in litigation costs.
Other causes of violations of small business regulations and the Small Business Act include:
- Third-party individuals have too much control over the business
- Having one client where you get a substantial amount of your revenues from
- Hiring incumbent management personnel.
- Failure to have an approved mentor protégé agreement
- There are others
How Does SBA Calculate Annual Receipts?
Your small business can be either evaluated by the amount of annual receipt or by the number of employees your company has. Your size is related to each NAICS code. To qualify as small, calculating the number of employees can be relatively simple. Companies get into legal trouble due to the calculation of annual receipts.
Therefore, you could be a small business for one North American Industry Classification (NAICS ) code while being large for another. According to the Legal Information Institute, the SBA considers the following, among other things when calculating Annual receipts.
(1) The Federal income tax return and any amendments filed with the IRS on or before the date of self-certification must be used to determine the status of a concern. SBA will not use tax returns or amendments filed with the IRS after the initiation of a size determination.
(2) When a concern has not filed a Federal income tax return with the IRS for a fiscal year which must be included in the period of measurement, SBA will calculate the concern’s annual receipts for that year using any other available information, such as the concern’s regular books of account, audited financial statements, or information contained in an affidavit by a person with personal knowledge of the facts.
SBA Bid Protest & Small Business Size Standard Lawyers
At the end of the day, you want to make it a priority to take proactive measures and make sure that your company meets the SBA small business size standard. When you are bidding on federal government contracts, you can be very exposed to the havoc of facing an SBA size bid protest.
At Watson & Associates, we offer experienced government contracts and SBA size standards bid protest lawyers. We help you to:
- Prepare and defend against SBA size protests
- Appeal adverse NAICS size determinations to SBA OHA
- Help with SBA size standard investigations
- Serve as intervenor attorney when you are the contract awardee.
SBA Size Standards and OHA Size Appeal Lawyers
When the SBA issues an unfavorable ruling, you can file a size appeal to the SBA Office of Hearings and Appeal within 15 days of the decision. The legal standard is to show that the area office committed a factual or legal error or simply violated procurement law and SBA small business size regulations. Whether you are the awardee or protestor, our SBA OHA Size Appeal lawyers focus on how the Area Office factually supported its size determination.
What are the Time Limits for Filing an OHA Appeal?
OHA decides size determination appeals under the Small Business Act of 1958, 15 USC 631 et seq., and 13 CFR parts 121 and 134. If you are contemplating filing an appeal to OHA, you must file the appeal within fifteen. days of receiving the size determination from the SBA. See 13 CFR. 134.304(a). Small businesses must file their size appeal with OHA within 15 calendar days of receiving the SBA small business size standards determination. 13 CFR 134.304(a). OHA must receive the size standards appeal by 5 p.m. EST on the 15th day.
What Are Costly Legal Mistakes That Can Lead to Size Standards OHA Appeals to Fail?
Lack of Specificity: Filing an SBA small business size standards protest must include specific facts. Your protest letter must be sufficiently specific to provide reasonable notice to the SBA as to the grounds upon which the protested contractor’s business size is questioned.
You cannot simply state that you have a belief without providing some basis for your belief or allegation. If you merely allege that the protested firm is not. small or is affiliated with unnamed other concerns, then the protest does not meet the legal grounds for the bid protest under 13 CFR 121.1007(b).
If your SBA size standards protest does not meet the legal requirements. , the SBA does not have a choice but to dismiss your case. If it finds your bid protest is non-specific, it must dismiss the protest. See 13 CFR 21.1007(c).
SBA OHA when looking at appellate cases has decided that the test for reviewing small business size standards protest it will look at the following:
- whether the protest was sufficiently specific to provide notice of the grounds upon which the protestor was contesting the challenged firm’s size; and
- whether the protest included factual allegations as a basis for these grounds.” See Size Appeal of Alutiiq International Solutions, LLC, SBA No. SIZ-5069, at 4 (2009).
Failure to Show that You Are an Interested Party: Many small businesses, even though they would normally have a great legal argument, make the costly legal mistake of not showing that they are an interested party to the procurement at issue. For example, a small business that files an SBA small business size standards protest on an SDVOSB set-aside but is not itself an SDVOSB entity will not be an interested party that has the standing to file the protest. Therefore, the SBA may also dismiss the case. an appeal to OHA will fail.
Failure to Show that Your Protest was Timely: When you file an SBA size protest, it must be filed within 5 days after you were aware of who the awardee or prospective awardee company is. You want to assert this in the protest itself. Otherwise, OHA on appeal may agree with the area office and deny your appeal. It is up to you, the protestor, to make sure that you have met all of the legal requirements to file a size protest.
Failure to Comply With the Three in Two Rule: The rule provides that a specific joint venture entity may be. awarded up to three government contracts over a two-year period, starting from the date of the first award, without the joint venture partners being found affiliated for all purposes under SBA regulations. the unique part of the rule allows for the same joint venture partners to form additional joint ventures, and each joint venture may receive up to three awards over two years, without the venturers being found affiliated for all purposes. The joint venture partners do not become generally affiliated merely because they entered into a joint venture together, as long as they observe the three-in-two rule. See 13 CFR 121.103(h)).
Call Our SBA Size Protest Lawyers for a Free Initial Consultation
To avoid the most costly legal mistakes of not complying with the SBA size standards and establishing size standards, or if you are in need of legal counsel regarding an SBA size protest, call Watson & Associates, LLC SBA size standard protest lawyers at 1-866-601-5518.