SBA’s Protest Process

We reviewed the U.S. Small Business Administration’s (SBA) process for handling complaints, or protests, filed to request review of contracts awarded to businesses that may not have been eligible in size or certification status, as required by the offer terms. The small business protest process was created to allow self-interested offerors to police themselves and prevent awards from going to ineligible businesses. The process was intended to protect the integrity of set-aside awards and of SBA’s small business contracting certification programs.

Congress authorized small business set-asides to ensure federal agencies award a fair proportion of goods and service contracts to small businesses in each industry to diversify and strengthen the American economy. In Fiscal Year (FY) 2021, federal agencies awarded over $154 billion to small businesses. The objectives of this audit were to determine whether SBA had effective controls in place to ensure protest decisions were properly enforced and to monitor the protest process.

We found SBA had effective controls in place to ensure protest decisions were properly enforced and used to monitor the protest process. We found that only 4 percent of the small businesses protested in FY 2021 did not update their proper status in their company profile after SBA found they did not qualify for set-aside awards. We also found program officials decided 80 percent of small business protests within the required 15 business days, or within extension dates approved by the contracting officer.

We made one recommendation for SBA management to strengthen controls to consistently document and monitor required protest information to ensure decisions are made in a timely manner. SBA Management agreed with the recommendation.