The Small Business Administration yesterday notified Navarro Research and Engineering that it has determined the company does not meet the small business size standard in the recent award of a new task order for support services to the Depleted Hexafluoride Conversion Project. The determination comes after the Department of Energy awarded the contract to Navarro in late March, which was subsequently challenged by Strategic Management Solutions, LLC, and Concord Professional Services, citing a size standard in the contract of $14 million. “SBA finds that Navarro is other than small for the $14 million size standard,” the determination states. “Navarro may not self-certify as a small business under the size standard of $14 million or less, unless it is recertified by an appropriate SBA office or is determined to be small by the SBA Office of Hearings and Appeals.”
Navarro is taking issue with the SBA’s finding, and plans to appeal the decision to the SBA’s Office of Hearings and Appeals. “Navarro is very disappointed by the SBA determination that was issued today. We are still confident that we bid and were awarded this contract properly based on our Small business size under our GSA Consolidated Schedule,” Navarro Vice President Rick Lyon said in a written response yesterday. During the determination process, the company told the SBA that “SBA’s regulations do not contemplate the unique facts and circumstances of consolidated GSA schedule contracts,” according to the SBA. Under the consolidated schedule, Navarro believed that it did not need to meet the $14 million contract limit, and instead only needed to meet the standard under its applicable GSA schedule, which in its case would be 500 employees.
Lyon said that Navarro received confirmation of this interpretation from the GSA before competing for the contract. “Our proposal was submitted with the GSA’s consolidated schedule guidance in mind, and Navarro is extremely disappointed that the SBA’s Area Office chose to analyze the company’s size at the task order level, as opposed to the contract level,” he said. Navarro also believes that its interpretation was backed in 2010 by the Government Accountability Office in a determination on a protest that Navarro filed against Portage in a similar situation. “Ironically, we dealt with a very similar situation in a recent GAO protest in which another bidder had received credit as small business because they were small under their schedule (500 employees), even though they were large under the task (i.e., large under the NAICS for the task order, but small under their schedule),” Lyon said. “In that case the GAO agreed with the position that, for GSA schedules, size determinations are made at the schedule level, not the task order level.”