In a recent size appeal decision, the SBA Office of Hearings and Appeals held that a small prime contractor was unusually reliant on its large subcontractor where “four key factors” indicated that the small prime contractor was bringing little to the table but its small business status.
OHA’s decision in Size Appeal of Modus Operandi, Inc., SBA No. SIZ-5716 (2016) involved an Air Force solicitation for research, studies, engineering, and related services. The solicitation was issued as a small business set-aside under NAICS code 541690 (Other Scientific and Technical Consulting Services), with a corresponding $15 million size standard.
The solicitation was a follow-on to a procurement for similar services, known as the Sustainment Systems Engineering & Acquisition Management Services contract. BAE Systems Technology Solutions & Services, Inc., a large business, was the incumbent under the SSEAMS contract.
After reviewing competitive proposals, the Air Force awarded the contract to Modus Operandi, Inc. An unsuccessful competitor subsequently filed an SBA size protest. The competitor alleged that Modus Operandi had proposed to use BAE as its subcontractor, and that Modus Operandi was affiliated with BAE under the ostensible subcontractor rule.
Keep reading this article at: http://smallgovcon.com/sbaohadecisions/ostensible-subcontractor-affiliation-beware-these-four-key-factors-says-sba-oha/