The ability to properly certify as a small business in connection with a government procurement can be a major advantage for a company. Each year, the federal government sets aside millions of dollars in government contracts exclusively for small businesses. In addition to being aware of these opportunities, however, a small business must also be aware of how to protect its status in connection with a particular procurement. This is particularly true with regard to requests for information regarding size status from the Small Business Administration (“SBA”).
There are several grounds on which a company’s status as a small business may be questioned. Depending on the applicable size standard, a competing offeror may allege that the company has a number of employees or revenues that exceed the level allowed by the standard. Often, questions regarding size status focus on whether an ostensible small business is actually otherthan- small by virtue of its “affiliation” with another concern. Affiliation is a connection between one or more companies that causes the SBA regulations to treat them as a single entity for size status purposes.
Regardless of the grounds for questioning a company’s small business size status, it is vital that any small business receiving a request for information be prepared to promptly respond. Often, when a company’s size status has been questioned, either by a competitor or the contracting officer, it will receive a communication from the SBA Area Office requesting evidence of small business size status. Part of this request will usually include SBA Form 355, which seeks information relating to the size of the concern and potential affiliation. The Area Office may require the submission of documentation as well. Importantly, the questioned concern has only three business days to respond to the Area Office’s request for information, or at least to request an extension of time. A failure to provide the information or obtain an extension within the three-day time period will result in SBA assuming that the business is other-than-small regardless of the company’s legitimate prior certification as a small business. Further, although the concern may challenge an adverse size determination through SBA’s size— appeal process, regulations do not permit a protestor to submit evidence in a size appeal that was not submitted to the Area Office at the time of the challenged determination. Therefore, a company’s failure to respond within the original three-day period will almost certainly be fatal to its chances with respect to that particular procurement. In order to protect against this unfortunate result, small business must be aware of requests for information from SBA and be prepared to respond to such communications quickly. The proper employee within the company for SBA-related correspondence should be identified, and this designation should be communicated to all potential recipients of informational requests. All communications from SBA should immediately be forwarded to that employee, or to a known delegate, if the primary employee is not available when the communication is received. Most importantly, the urgent requirement of a response within three days must be communicated to all employees with positions relating to government procurement. Remember: the SBA Area Office will often allow a reasonable extension, but not responding at all within three days will likely cost you the contract.