OHA Filing for Mishandled Size Protest

. . . . . . . . . FitNet Purchasing Alliance. 669 Treehouse Circle Saint Augustine, FL 32095 904.599.9920 Phone 866.381.0908 Fax info@fitnet.net Email OHA APPEAL FOR THE MISHANDLING OF A SIZE PROTEST To: Company From: Re: Linda Digianomenico Office of Hearings and Appeals Raul Espinosa, President Size Protest 4-200-75 against Sampson Partners aka Nautilus, Inc. for two separate size violations Fax: 202-205-7059 Phone: 202-401-8200 Date: October 5th, 2009 . . . . . . . . . . Accept this communication as a timely OHA appeal, from an interested party, for the alleged staff mishandling of Size Protest 4-2009-75. The actions herewith described will demonstrate not only the dire need for Congress to strengthen the Size Protest System because, currently, it is often ignored by the Agencies, trounced by savvy corporate attorneys and most importantly, because it neither punishes the offenders nor does it deliver justice to the abused small businesses which win the protests.1 The issues raised will demonstrate the need for the size protest staff to be better trained and focused on combating the ‘contracting abuse’ that size protests bring to the limelight. For the record, none of the size protest violators,2 have ever been prosecuted even though the act of illegally bidding or acquiring contracts reserved for small businesses constitutes fraud, and there are severe penalties which include minimum fines of $500,000, jail terms of 10 years and debarment for the violations. Choosing to dismiss a size protest that contained not only an obvious violation of the ‘non-manufacturing rule’ [FAR 19.502.2(c)], but an allegation of the existence of an alleged ‘front’ for a large business further demonstrates the government’s dysfunctional culture when it comes to the statutory small business reservation. Both Congressional Small Business Committees - including my Congressman and two Senators will receive copies of this filing because Congress has a responsibility to make sure the Size Protest System will not only deliver justice, but compensation and rewards to small businesses which use it to receive justice. The SBA OIG has admitted that ‘size misrepresentation’ and Agencies taking credit for small business contracts issued to large businesses constitute “the SBA biggest challenges”.3 The Size Protest system, otherwise, will continue to be only an illusionary vehicle for justice and a waste of taxpayers dollars! The record will show that the size protest in question involved an obvious violation of FAR 19.502.2(c) which only became known – by TSA’s own action - during the debriefing. Again, the Contracting Officer (CO) refused to provide the name of manufacturer of the commodities offered when I was informed of the award 4. 13 CFR § 121.1004 (a)(2) allows for a protest to be filed within five days (excluding Saturdays, Sundays, and legal holidays) after the CO provides the protestor with the information which might cause a size protest to be filed. The FitNet’ size protest, therefore, filed on August 27th, one day after the CO acknowledged, for the first time, that the manufacturer of the commodities being provided was Nautilus, Inc., a large business. In accordance with FAR 19.502.2(c), Nautilus, Inc., was ineligible to supply their products on a solicitation reserved for small businesses. Contrary to the reasons stated on the SBA dismissal letter, the filing occurred in a timely basis within the required five days after the violation became known. 1 2 The Size Protest System Needs to be Strengthened. - https://console.prweb.com/prfiles/2008/10/03/162468/TheSizeProtestSystemMustbeFixed.pdf SBA list of Size Violators which have avoided punishment - http://www.sba.gov/contractingopportunities/officials/size/bds/index.html 3 OIG Report 5-15 confirming ‘size violations’ are SBA Biggest Challenge http://www.sba.gov/idc/groups/public/documents/sba/oig_gcbd_05-15.pdf 4 TSA written statement - “We will provide the make and model of the item to be delivered by the successful offeror during the debriefing.” Furthermore, referencing on the Protest decision the dismissal of a 2005 size determination raised against Sampson Partners does not justify – given the established shortcomings of the size protest process – an outright dismissal of a size protest which had raised two separate violations. Additionally, efforts to uncover alleged fraudulent activity in government contracting – given the currently inefficient processes – would not only require several attempts, but a more serious commitment on the part of SBA to pursue, investigate and prosecute allegations of contracting abuse. I cite, for example, the Unisen, Inc. size protest (6-2009-0031). In July 1st, 2009, Unisen, Inc., was finally declared inelegible to pursue small business contracts . . . on the third Size Protest raised against the company. The previous two protests were not investigated properly and thus mishandled. The alleged role of Sampson Partners, as a ‘front’ for Nautilus, Inc., involves ‘economic dependence’ (J&R Logging - SIZ-4426); ‘totality of the circumstances‘ (Tiger Enterprises, Inc., SIZ 4647) and ‘other general principles of affiliation’ (Horizon Consulting, Inc., SIZ-4658). Sampson Partners is alleged to have handled, exclusively and under the same individual, all of the government sales efforts – including both GSA and solicitations ‘reserved for small businesses’ for Nautilus Inc. since Nautilus’ size standards were successfully challenged in 2003 (2-2003-??) and StairMasters was acquired by Nautilus. An administrative historical review of their GSA Contract (GS-07F-9315G) going back to 2003 will demonstrate that the same individual has remained ‘as the main and key contact all the time regardless of the Company that person alleges to represent. Additionally, the former owners of StairMasters and now Sampson Partners, as it was reported originally, are alleged to be the same. The record will further demonstrate that large businesses are receiving unwarranted support in the form of unfair justifications5 from program personnel or ‘end-users’ – and with the implied support of Contracting Officers in spite of four (4) separate OFPP directives whose purpose were to put an end to the endemic abusive contracting practice. Such abusive practices are allowing large businesses to continue to circumvent the rules and regulations that protect the statutory rights of small businesses. I wish to further state, under oath and for the record, what Gary Jackson, the recently retired Associate Administrator of the Office of Size Standards had stated to me and to other small business advocates who had voiced concerns over the proliferation of alleged ‘fronts’ to siphon small business contracts.6 He stated, “the Size Standards Office would pursue allegations of the existence of a ‘front’ for a large business raised through a size protest regardless of the size protest timeliness.” Mr. Jackson further stated that, “size violations allegations raised during size protests will be both addressed and dealt with regardless of their timeliness.” Mr. Jackson assured me that Area Directors have the right and the responsibility to initiate their own size protests to pursue “size standard violations which might fall through the system.” For the record, Ms. Beaver, the Area Director in this case or the Acting Size Standard Administrator can still file a Size Protest on their own if they were serious about stopping the abuses for the violations herewith described. I have confidence that this OHA Appeal will further prove that DHS TSA Contracting personnel failed to abide by the FAR 19 clauses which protect the statutory rights of small businesses. TSA, for example, a) avoided revealing the manufacturer/brand-name of the products offered by Sampson Partners when asked. b) scheduled the debriefing not within the three (3) days required by the FAR, but eight (8) days after I was advised of the award and FPA Procurement Advisory on ‘unfair justifications. - http://www.prweb.com/prfiles/2008/08/31/162468/FPAAdvisoryUnfairJustifications.pdf Statement made to the undersigned following the OHA’s SIZ-2005-09-22 decision, a very similar case involving the uncovering of an alleged ‘front’ for Precor, Inc., a large business. For the record, the OHA victory caused SBA to finally admit the existence of the ‘front’, but the size protest neither punished the violator, not did it reverse the illegal award. Most importantly, it did NOT offer any compensation nor reimbursement to the successful winner of the Size Protest. In short, the Size Protest System provided NO justice nor punishment demonstrating it has never worked as Congress had intended. 6 5 c) after been made aware both during the debriefing and during the size protest proceedings that an award to Sampson Partners would violate the ‘non-manufacturing rule’ [FAR 19.502.2(c)], TSA went ahead and still awarded the contract to them. For the record, it should be noted that FitNet had won the TSA original BUY for the commodities under protest conducted on FedBid, a government reverse auction. The CO, however, - arbitrarily and capriciously displaced FitNet as the winner and re-posted the BUY claiming the end user had justified “different specifications.” The alleged new justifications, however, were no different than the original BUY raising yet other allegations - not yet pursued – of both ‘unfair justifications,’ and ‘retaliation’ aka ‘discrimination’ for my vocal opposition against many DHS abusive contracting practices which have negatively affected my company and have caused me to loose in excess of $3M in contracts. My witness on the debriefing who can substantiate my allegations and the proceedings of the debriefing was Leutrell Osborn, a respected small business advocate who at one point had served as the Chairman of the Office of Small and Disadvantaged Business Utilization (OSDBU) Council for the entire Federal Government. In short, the SBA dismissal of Size Protest 4-2009-75, again, without confirming the obvious violation of the non-manufacturing rule [FAR 19.502.2(c)] while ignoring a yet more serious allegation, was not only wrong and unfair, but also unlawful. Below are the facts of the case which will also demonstrate that the Government’s own rules were violated. This OHA Appeal, for the record, has been filed within 15 days of receiving the protest decision:     On Sept. 21st I received, via fax, after requesting in writing an update on a protest filed August 27th. A decision is required within 10 days. Although the letter was dated Sept. 10th, still beyond the required time frame, I had never received it as the Area office had implied. On August 27th, one day following the debriefing, I filed the timely Size Protest citing two alleged violations. On August 18th, I was informed of the award, but denied the information which became one of the subjects of the protest. Although a debriefing is required within 3 days, TSA took eight days to hold it. Both the SBA Size Protest staff as well as the TSA CO ignored the obvious violation of FAR 19.502.2(c). which states “For small business set-asides other than for construction or services, any concern proposing to furnish a product that it did not itself manufacture must furnish the product of a small business manufacturer unless the SBA has granted either a waiver or exception to the nonmanufacturer rule.” To conclude, I wish to request OHA, through this timely appeal to VACATE the Area Office dismissal of the size protest and REMAND the OHA proceedings to the Area Office so the two alleged violations under protests can be properly judged and investigated. I wish to further request - through the Size Protest process and/or through the OIG at SBA or at DHS – for SBA to request the withdrawal of the award and/or the return of the commodities secured through an illegal award. Additionally, the reposting of the set-aside solicitation without unfair and unethical justifications to permit fair competition and the reimbursement of all my professional and legal expenses in pursuing justice through both the Size Protest process and the OHA Appeal. Respectfully submitted, Raul Espinosa, President FitNet Purchasing Alliance Certificate of Service I hereby certify that on October 5th, 2009 – within the required 15 days (excluding weekends and Holidays) of the receipt of the Size Protest 4-2009-75 Decision - I caused the foregoing OHA Size Appeal to be served by fax and or email – as indicated below - to the following Government and Elected Officials.                     The DHS TSA Contracting Officer Marvin Grubbs (fax) 571-227-1372 The Protested Concern, Sampson Partners aka Nautilus, Inc. (fax) 330-405-1289 SBA Area IV Area Director, Pam Beavers (fax) 312-253-3111 SBA Size Standards Office, Acting Associate Administrator, (fax) (202-481-2028 FitNet Witness during TSA Debriefing, Leutrell Osborn, Sr. (email) iiculture@mac.com DHS OSDBU Director, Kevin Boshiers (email) Kevin.Boshiers@dhs.gov SBA General Counsel for Procurement Law, John Klein (email) John.klein@sba.gov SBA Govt Contracting Acting Director, Joseph Jordan (email) Joseph.Jordan@sba.gov SBA Office of Advocacy Associate Director, Major Clark III (email) Major.Clark@sba.gov SBA Office of Senior Policy, Dean Koppel (email) Dean.Koppel@sba.gov SBA OIG Investigations, Daniel O’Rourke (email) daniel.o'rourke@sba.gov DHS OIG Investigations, Thomas Frost (fax) 202-254-4292 TSA Inspector General, Ronald Gallihugh (email) ronald.gallihugh@dhs.gov Senate Small Business and Entrepreneurship Committee (fax) 202-224-4805 House Small Business Committee (fax) 202-225-3587 Senate DHS Subcommittee on Contracting Oversight (fax) 224-9603 Congressman John Mica (fax) 202-226-0821 Senator Bill Nelson (fax) 202-228-2183 Senator George Lemieux (fax) 202-228-5171 Fairness in Procurement Alliance (FPA) email. – FPA.Advisory@gmail.com Respectfully submitted, Raul Espinosa, President FitNet Purchasing Alliance