Protest of Small Business 8(a) Award

A firm protested the award of a contract under the Small Business Administration's (SBA) section 8(a) program. The contract was for the provision of data processing services to the Department of Energy. The protester had been providing portions of these services under previous contracts with Energy. The protester essentially contended that, at the time of the award, SBA was aware that the awardee was in fact a large business and not eligible for the award. Section 8(a) of the Small Business Act authorizes SBA to enter into contracts with any Government agency that has procuring authority and to arrange for the performance of such contracts by letting subcontracts to socially and economically disadvantaged small business concerns. The protester argued that the award violates both the Act and SBA regulations which require that assistance be given only to small businesses. The protester also asserted that the SBA award of a contract to a firm known to be a large business constitutes bad faith. The protester claimed that knowledge by an SBA official that the awardee was not a small business was evidenced by a press release issued by SBA on the date of award. Implementing SBA regulations provide that, prior to termination for failure to meet eligibility standards, a firm must be granted an opportunity for a hearing. Although the protester presented a credible interpretation of the Act, it had not demonstrated that the SBA interpretation was unreasonable. Great deference is to be accorded to the interpretation of a statute by an agency which is authorized to enforce and implement that statute. The protester alternatively argued that, even if the Act requires a hearing prior to termination based upon size, the denial of a particular contract in recognition of an adverse size determination does not constitute termination. The award of the 8(a) contract was not affected by the adverse size determination made by SBA subsequent to award. Although SBA may have committed an oversight by awarding to a firm it arguably should have known was large, the protester had not shown that SBA acted fraudulently or in bad faith. Accordingly, the protest was dismissed.