Photo of Olivia LynchPhoto of Monica DiFonzo SterlingPhoto of Issac SchabesPhoto of Zachary Schroeder

In a February 11, 2022 decision, the U.S. Court of Federal Claims (Court) dismissed for lack of interested party status a post-award protest filed by Colsa Corp. (Colsa) in which it challenged the status eligibility of other offerors.

In September 2018, the Missile Defense Agency (MDA) issued a solicitation seeking a single contractor to provide infrastructure, operations and maintenance and cybersecurity engineering.  The procurement was set-aside exclusively for woman-owned small businesses (WOSB).  Four contractors submitted proposals in October 2018.  Colsa, the incumbent, did not submit a proposal.

Following an initial award of the contract in May 2019, multiple Government Accountability Office protests prompted MDA to take corrective action and reopen the procurement.  MDA conducted multiple rounds of discussions, eventually narrowing the competitive range to two offerors— DTechLogic, LLC (DTechLogic) and Trident Technologies, LLC (Trident)—and amended the solicitation to incorporate an updated version of the performance work statement.

In May 2021 as the corrective action was on-going, Colsa sent a letter to MDA advising the agency that it would not be able to award to any of the offerors as none were certified WOSBs and, therefore, all were ineligible for award.  In response, MDA contacted the Small Business Administration (SBA) to confirm its understanding that so long as the firm was an eligible WOSB at the time of the offer, the agency could award a contract to a firm that has become other than a WOSB (specifically asking whether it could still award to an offeror’s whose ownership had changed such that it is no longer a WOSB).  SBA agreed with MDA that the firms remained eligible.  In July 2021, MDA responded to Colsa, stating that it had coordinated with SBA regarding Colsa’s concerns and MDA would not be canceling the solicitation.

In August 2021, MDA reaffirmed award to its initial awardee, DTechLogic.  Subsequently, Colsa protested to the Court.  According to Colsa, neither the awardee nor the remaining offeror were WOSBs at time of award:

  • In May 2021, although DTechLogic was in the SBA’s dynamic small business search (DSBS), it was not certified as a WOSB as of May 14, 2021. By September 2021, DTechLogic was no even longer in DSBS.
  • In March 2019, a private equity firm acquired Trident and, as of September 2021, Trident is not in DSBS and was no longer certifying as small on the System for Award Management.

The Court dismissed Colsa’s protest on standing.  The Court held that a protester must have either submitted a proposal or protested the procurement prior to the award decision whenever facts giving rise to the protest are known.  Here, it was undisputed that Colsa was not an actual bidder.  The Court further determined, based on Colsa’s May 2021 letter, Colsa was aware of the two offerors’ alleged ineligibility prior to award.  MDA put Colsa on notice in July 2021 that it was proceeding in a manner that Colsa considered a violation of the applicable regulations and, per the Court, Colsa provided “no plausible argument that it could not have challenged the offerors’ eligibility for award” prior to award.  As such, Colsa failed to diligently pursue its protest rights, rendering it unable to claim prospective bidder status.

What is of note is SBA’s confirmation that MDA could award to offerors based on their eligibility as of their initial proposal submission date.  As is becoming increasingly common, procurements can last for years.  Here, the Agency had received and were evaluating initial proposals for over a year before SBA published new WOSB certification regulations.  Those regulations, which were published in May 2020 and went into effect on October 15, 2020, removed the WOSB self-certification option for WOSB Federal Contracting Program participants.  For WOSB Federal Contracting Program set-asides and sole-source contracts posted after October 15, 2020, all WOSB Federal Contracting Program participants are required to be certified by either SBA or an approved third-party certifier as a WOSB by the time of award.  SBA’s confirmation that MDA could award to the pending offerors notwithstanding an ownership change (that would have prevented such an offeror from becoming a certified WOSB by time of award) answers a question that we had not seen squarely addressed in SBA’s WOSB guidance to date—which is that WOSB certification is not required in WOSB procurements that were pending at the time the new certification rules took effect.