In their recent decision in Redhorse Corporation, SBA No. VET-263 (2017), SBA’s Office of Hearings and Appeals (OHA) found that the Supreme Court’s Kingdomware decision does not affect the SBA’s SDVOSB eligibility regulation for multiple-award contracts. This regulation requires that a company must qualify as an SDVOSB at the time of the initial offer for a multiple-award contract, rather than for all orders issued under the contract.
Redhorse involved a GSA RFQ to award task orders under the GSA Professional Services Schedule. The order was set aside for SDVOSBs and the GSA CO did not require offerors to recertify their SDVOSB eligibility in connection with the order.
Redhorse was found to be the apparent awardee and another offeror filed a protest challenging Redhorse’s SDVOSB status. The SBA sustained the protest and found Redhorse to be ineligible for the task order.
Redhorse filed an SDVOSB appeal with OHA. Redhorse argued that it was an eligible SDVOSB under the Professional Services Schedule and was not required to recertify its status for the order. As a result, Redhorse said that the SDVOSB protest should have been dismissed and OHA agreed and granted the appeal.
The protestor requested reconsideration, arguing that OHA was violating the Kingdomware decision, stating that “any new order off of a multiple award contract . . . is an independent contract in and of itself,” and requires a new SDVOSB certification.
OHA responded that the competitor hadn’t initially included Kingdomware in its appeal and could not add it at this point when requesting reconsideration. Regardless, OHA decided to discuss Kingdomware in its decision. “. . . because Kingdomware decided the narrow question of whether task orders must be set aside for veteran-owned small businesses pursuant to 38 U.S.C. 8127(d), it does not affect SBA’s existing regulations pertaining to protests against task orders and recertification under long-term, multiple-award contracts. Kingdomware, then, is not inconsistent with the regulation at issue here, 13 C.F.R. 125.18(e)(1), which states that “if an [SDVOSB] is qualified at the time of initial offer for a Multiple Award Contract, then it will be considered an [SDVOSB] for each order issued against the contract, unless a contracting officer requests a new [SDVOSB] certification in connection with a specific order. The CO did not request recertification for the instant task order, so Redhorse remains an SDVOSB for this task order based on its earlier certification at the GSA Schedule contract level.”
OHA dismissed the request for reconsideration and affirmed the original decision.
This will certainly not be the last time that a protest will be filed citing the Kingdomware decision. What remains to be seen is which way the courts and SBA will decide each one.