In Size Appeal of the Analysis Group, LLC, the SBA Office of Hearings and Appeals (“OHA”) affirmed the area office’s finding that the proposed awardee for an indefinite delivery, indefinite quantity (“IDIQ”) contract with the Army Contracting Agency was other than small for purposes of award of the contract, which was reserved as a total small business set-aside. The OHA affirmed the area office’s size determination on grounds that the proposed awardee, a small business, was unduly reliant upon the incumbent contractor, with whom the proposed awardee had entered a teaming agreement, and thus was affiliated for purposes of administration of SBA’s size standards.

The OHA’s decision was based on the Army’s determination that the vital part of the solicitation was the personal qualifications of the contractor’s “core personnel.” The fact that the proposed awardee intended to fill five of the six core personnel positions with the employees of the incumbent contractor and proposed to fill the sixth position with an employee of the incumbent contractor’s principal subcontractor led the OHA to conclude that the proposed awardee – a small business – was unduly reliant on its team member – a large business. The OHA considered but rejected the proposed awardee’s argument that under the teaming agreement, the incumbent contractor was only responsible for a minimum of 36 percent of the total labor of the contract, which the proposed awardee argued proved it was not unduly reliant. However, because the teaming agreement failed to identify the discrete tasks that the two firms would perform, which the OHA believed must exist, the OHA concluded that such failure constituted “a strong indication of undue reliance.” Consequently, the area office’s re-determination was affirmed. SBA No. SI2-4814 (Oct. 17, 2006).