[Protest Alleging SBA Applied Incorrect Classification To Determine Eligibility]

B-209992: Apr 11, 1983

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A firm protested a proposed Small Business Administration (SBA) section 8(a) contract award. The protester argued that SBA applied the wrong Standard Industrial Classification (SIC) in determining the proposed awardee's eligibility and that the firm would not be eligible for award if the correct SIC were used. When the Air Force offered the contract to SBA for the 8(a) program, it advised SBA that it would be in the best interests of the Government to award the contract to the proposed awardee which was the incumbent contractor. SBA determined that the proposed awardee was eligible for the 8(a) program. However, it noted that the firm's current eligibility was due to expire shortly. The protester did not challenge the proposed awardee's eligibility as an 8(a) firm. Rather, it contended that it should not be allowed to perform the contract because the work was for computer services, which had a different size standard than that for guided missiles and space vehicles, the size standard under which the proposed awardee was judged. GAO has held that SBA has the exclusive authority to determine matters of small business size status for procurement purposes and, once accepted into the program, the concern's size status is governed by its principal business activity. Since the protester did not show that SBA or the Air Force acted improperly or illegally in this case, GAO had no basis to question the SBA determination that the proposed awardee could receive the contract. Accordingly, the protest was denied. However, since SBA stated that the proposed awardee's eligibility under the program is scheduled to expire before the end of the contract term, GAO recommended that the solicitation be amended to provide that option provisions would be exercised only if, at the time the options are scheduled to be exercised, the firm continues to be an eligible 8(a) firm. This solicitation modification would protect the rights of other 8(a) firms which are interested in obtaining the contract.

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