When you think a large business has swooped in and snatched a set-aside contract, you may have a potent remedy. But you’ve got to act fast and monitor compliance with some tight deadlines.

The remedy, of course, is to file a size protest. Size protests are decided by the Small Business Administration, which will authoritatively determine whether the awardee is a small business.

But time is of the essence. To be timely, an aggrieved small business must file a size protest with the contracting officer and it must be received no later than five working days after notification of award for negotiated procurements. For multiple award schedules buys, the protest is timely at any time during the holder’s schedules contract. The CO can always question the size status of an offeror or awardee, and his or her protest is always timely.

The CO is required to “promptly” forward a protest to SBA’s Area Office for the official determination. CO’s have been known to delay referring protests to SBA for a variety of reasons, but the regulations do not permit it. Contractors should aggressively monitor whether a CO has, in fact, referred a protest to SBA.

Once SBA receives the protest, it requires the awardee to submit detailed information about the company, and a response to the protest, within three working days. If you’ve won a contract and another firm protests your size status, don’t ignore the request, because if there’s no response, SBA’s regulations entitle it to assume the response would have been adverse to your interests. SBA does have the power to grant an extension of that tight three-day deadline.

The regulations require that a protest state “specific facts,” rather than just a conclusion or belief that the awardee is affiliated with a large business or is otherwise ineligible. SBA will dismiss protests that are insufficiently specific. Even if it not dismissed, if the protest is not substantiated by the awardee’s own response, SBA may not have the time or inclination to dig for other proof. So researching the factual basis for the protest is the most important step for a protester. Often this information is available from SBA’s Pro-Net database, or from other resources readily available over the Internet.

In one recent protest handled by Paley Rothman, our client found that just a few months before starting his company, the president of the awardee had signed in at a bidder’s conference as director of federal sales for a company that had outgrown the size limit for that procurement. Furthermore, the awardee’s Pro-Net listing showed that he had secured four contracts with his previous employer, all within two weeks of incorporating the company. When presented with this evidence “on a silver platter,” so to speak, SBA had no difficulty in finding affiliation and overturned the award.

SBA’s regulations state that it will make a decision on the size protest within 10 business days, “if possible.” The ten-day limit is extremely important, because the FAR provides that for protests before award was made, the CO must only withhold award until SBA has had the protest for 10 business days, or until it decides the protest, whichever came first. See FAR 19.302(h)(1). (For contractors that wish to read SBA’s regulations about size protests, the citation is 13 C.F.R. ‘ 121.1001 et seq. You can find them in SBA’s online library of regulations, or at numerous other websites that display the Code of Federal Regulations.)

A Feb. 27 bid protest decision by the General Accounting Office, Planned Systems Int’l Inc., B-292319.7, illustrates that SBA’s laxity can be very costly for a protester. In that case, the protester filed protests both at GAO and at SBA. Knowing that the GAO protest (which attacked other aspects of the selection process) would automatically stay the award, SBA took extra time to decide the protest. When GAO denied the protest, the agency was free to proceed with award, which it promptly did.

SBA subsequently found that the awardee was not a small business. The protester then filed another protest at GAO. However, GAO ruled that 10 days had passed, so the agency’s award stood. In that case, the agency had also delayed for a month in referring the size protest to SBA, which may also have cost the protester valuable time.

The lesson learned is that a protester must be vigilant and monitor every step of a size protest. However, the rewards for vigilance can be great. When SBA overturns an award, agencies have wide discretion, and can reopen discussions, start a new procurement or perhaps use another contract vehicle, or abandon the procurement altogether.

So while the agency is not required to award to the protester, sometimes it will do so. In another recent case handled by our office, after the successful protest overturned the initial award, the agency turned to the offeror next in line. That ex-protester, now the awardee, is happily implementing performance, which if all goes well will yield revenues of $9.5 million through a base year and four option years.

So if your company doesn’t win that set-aside award you thought you had in the bag, invest a little time in researching the awardee. The investment could be very rewarding.

Daniel S. Koch practices government contracts law at the firm of Paley Rothman in Bethesda, MD. He can be reached at 301- 951-9371 and Dkoch@PaleyRothman.com