THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBIC IN ITS ENTIRETY ON SEPTEMBER 28, 1993 ______________________________________________ MOTION TO DISMISS FOR LACK OF JURISDICTION GRANTED: September 20, 1993 ______________________________________________ GSBCA 12558-P QSOFT, INCORPORATED, Protester, v. SMALL BUSINESS ADMINISTRATION, Respondent, and CONTEMPORARY TECHNOLOGIES, INC., Intervenor. J. Patrick McMahon, Vienna, VA, counsel for Protester. John W. Klein, Audrey H. Liebross, and Christopher Holleman, Office of General Counsel, Small Business Administration, Washington, DC, counsel for Respondent. David S. Cohen, Paralee White, Nikki Koulizakis, and G. Brent Connor of Cohen & White, Washington, DC, counsel for Intervenor. Before Board Judges LaBELLA, BORWICK, and DeGRAFF. DeGRAFF, Board Judge. On August 27, 1993, QSoft, Inc. (QSoft) filed its complaint in this case, protesting the decision of the Small Business Administration (SBA) to award a contract to Contemporary Technologies, Inc. (CTI). On September 13, 1993, SBA filed a motion to dismiss, asserting that the Board lacks jurisdiction to entertain this protest. On September 17, 1993, QSoft filed its opposition to SBA's motion. Pursuant to 40 U.S.C. 759(f) (1988), we possess jurisdiction to consider a protest filed by an "interested party" who requests that we review a contracting officer's decision. Because QSoft is not an interested party in connection with the procurement at issue here, we grant SBA's motion to dismiss. Background The 8(a) Program Sections 8(a) and 7(j) of the Small Business Act establish the Minority Small Business and Capital Ownership Development Program, commonly known as the 8(a) program. The statute authorizes SBA to enter into contracts with other Government agencies and to subcontract the performance of these contracts to small businesses owned and controlled by socially and economically disadvantaged individuals. The purpose of the program is to provide assistance to such businesses so that they are able to compete equally in the marketplace. 15 U.S.C.A. 636(j) and 637(a) (1993). The Small Business Act and SBA's implementing regulations establish the eligibility criteria for participating in the 8(a) program. Generally, a firm must meet certain size requirements and must be owned and controlled by socially and economically disadvantaged individuals. 15 U.S.C. 637(a) 13 CFR Part 124 (1993). Within SBA, the Office of Minority Small Business and Capital Ownership Development (MSB&COD) is responsible for handling matters relating to 8(a) program eligibility. 15 U.S.C. 637(a)(8), 13 CFR 124.3. If MSB&COD determines that a firm is eligible to participate in the 8(a) program, the firm may participate in the program for nine years. The first four years of participation are called the developmental stage, and the remaining five years of participation are known as the transitional stage. 15 U.S.C. 636(j)(12), 13 CFR 124.110, 124.303. In order to ensure that a firm moves into the marketplace and does not become dependent upon 8(a) contracts, SBA requires 8(a) program participants to obtain business outside the 8(a) program. 15 U.S.C. 636(j)(10)(I), 13 CFR 124.312. During a firm's transitional stage, it is required by SBA to achieve certain targets of non- 8(a) contract revenue. Id. For instance, a firm in the third year of its transitional stage must achieve thirty-five to forty- five percent of its business from non-8(a) contracts, and a firm in the fourth year of its transitional stage must achieve forty- five to fifty-five percent of its business from non-8(a) contracts. 13 CFR 124.312 (c)(4). If a firm fails to achieve the minimum percentage of non- 8(a) contract revenue, SBA is authorized to implement certain remedial measures, such as requiring the firm to attend business management seminars or restricting the firm's access to 8(a) contracts. 15 U.S.C. 636(j)(10)(I)(iii)(V), 13 CFR 124.312 (c)(6), 124.312 (c)(12). In order to receive an 8(a) contract during the transitional stage of the program, a firm must certify either that it has complied with the non-8(a) business revenue target or that it is in compliance with any remedial measures imposed by SBA. 15 U.S.C. 636(j)(10)(I)(iii)(III), 13 CFR 124.312 (c)(11). SBA may award either sole source 8(a) contracts or competitive 8(a) contracts. 15 U.S.C. 637(a)(1)(B), 13 CFR Part 124. If a contract is to be awarded competitively, the procuring agency will conduct the competition in accordance with the Federal Acquisition Regulation (FAR). 13 CFR 124.311(f). The procedures for awarding an 8(a) contract are set forth in the FAR at Subpart 19.8. 48 CFR 19.800 - 19.812 (1992) (FAR 19.800 - 19.812). According to FAR 19.805-2(c), SBA -- not the procuring agency -- is responsible for determining the eligibility of a firm to receive award of an 8(a) contract. Further, this regulation provides that SBA will determine a firm's eligibility for award as of the time of submission of initial offers which include price. FAR 19.805-2(c). SBA's regulations provide that, if an offeror is in the transitional stage and has not achieved its non-8(a) business revenue target, this will not affect the firm's eligibility for award, so long as SBA and the firm have agreed upon a remedial plan. 13 CFR 124.311(f)(5)(iv). SBA may terminate a firm's participation in the 8(a) program prior to the expiration of nine years, for good cause. 15 U.S.C. 636(j)(10)(F), 13 CFR 124.209. If SBA terminates a firm's participation, the firm may appeal the termination to SBA's Office of Hearings and Appeals. 15 U.S.C. 636(f)(10)(G), 637(a)(9), 13 CFR 124.210. No appeal may be taken from SBA's decision to require remedial measures of a firm which fails to meet its non-8(a) business revenue targets. 15 U.S.C. 636(j)(10)(I)(V). The Procurement At Issue Here SBA's Central Office decided to procure application software development services and, in a letter dated April 7, 1992, to MSB&COD, the Central Office offered to fulfill its requirements by means of a competition among 8(a) firms. Protest File, Exhibit 41. On April 13, 1992, MSB&COD accepted the Central Office's offer to fulfill its requirements in this manner. Id. The Central Office issued solicitation SBA-92-8-FDS on June 1, 1992, and QSoft submitted its proposal on July 14, 1992. Protest File, Exhibits 1, 14. Subsequently, the solicitation was amended six times and offerors were permitted to submit revised proposals. Protest File, Exhibits 5-10. On May 24, 1993, QSoft and Central Office representatives entered into discussions concerning technical and cost issues and, on June 1, 1993, QSoft submitted its best and final offer. Complaint 12, 16; Protest File, Exhibit 21. On June 2, 1993, the Central Office advised MSB&COD that three firms were within the competitive range, and requested that MSB&COD determine whether these firms were eligible for award of an 8(a) contract. Protest File, Exhibit 41. MSB&COD determined that, at the time QSoft submitted its proposal, it had not met its non-8(a) business revenue target. SBA's Motion to Dismiss, Exhibit 1; Protest File, Exhibit 41. Specifically, MSB&COD determined that QSoft was in the third year of its transitional stage at the time it submitted its proposal on July 14, 1992. Although SBA's regulations required QSoft to generate thirty-five to forty-five percent of its revenue from non-8(a) sources during the third year of its transitional stage, as of the end of the third quarter of 1992, QSoft had generated only 2.8 percent of its revenue from non-8(a) sources. This figure remained the same at the end of 1992. Id. In addition, MSB&COD determined that QSoft did not have an approved remedial plan in place at the time it submitted its proposal. Id. Because at the time it submitted its proposal, QSoft had not met its non-8(a) business revenue targets and because QSoft had no remedial plan in place, MSB&COD determined that QSoft was not eligible for award of this 8(a) contract. MSB&COD advised the Central Office of QSoft's ineligibility in a memorandum dated June 14, 1983. Protest File, Exhibit 41. The Central Office notified QSoft of MSB&COD's determination in a letter dated August 18, 1993. Id., Exhibit 43. SBA notified CTI on August 18, 1993, that it was the successful offeror. Id. The Protest In its complaint, QSoft sets forth two grounds for its protest. In Count I, QSoft alleges that SBA failed to evaluate QSoft's technical and cost proposals properly. In Count II, QSoft alleges that the contracting officer -- and not the appropriate authority within SBA -- made the determination that QSoft was not eligible for award. Alternatively, QSoft alleges that the eligibility determination was made at the wrong time. QSoft also alleges that the eligibility determination is incorrect. Discussion The procurement at issue here is for automatic data processing support services. Thus, pursuant to 40 U.S.C. 759(f) (1988), we possess jurisdiction to entertain this case so long as it was filed by an interested party who asks us to review a decision by a contracting officer which is alleged to violate a statute or regulation. The term "interested party" is defined at 40 U.S.C. 759(f)(9)(B) as "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract." A protester who has no chance of being awarded the contract lacks a "direct economic interest" in the award and so is not an interested party. United States v. International Business Machines, Inc., 892 F.2d 1006 (Fed. Cir. 1989); C.M.P. Corp., GSBCA 11115-P, 91-2 BCA 23,854, 1991 BPD 55. Competition for award of the contract at issue here was limited to firms eligible to receive award of an 8(a) contract, and QSoft does not complain about this limitation. The FAR provides that 8(a) eligibility will be evaluated as of the date that a firm submits its initial proposal. FAR 19.805-2(c). Unless QSoft was an eligible 8(a) firm when it submitted its initial proposal in July 1992, it is not eligible for award of this contract. If QSoft is not eligible for award, it is not an interested party and we lack jurisdiction to consider either count of the protest. There is no basis for QSoft's allegation that the contracting officer determined that QSoft is not eligible for award. It is clear from the record that MSB&COD -- not the contracting officer -- determined that QSoft was not an eligible 8(a) firm at the time it submitted its proposal and, thus, not eligible for award. According to statute and regulation, MSB&COD is the proper authority to make such an eligibility determination. To the extent QSoft argues that we possess jurisdiction because the contracting officer should have been alerted to some deficiency in the timing or the correctness of MSB&COD's decision, we disagree. Concerning timing, the regulations clearly require that QSoft must have been eligible as of the date that it submitted its initial proposal, and the evidence is clear that MSB&COD examined QSoft's eligibility as of that date. If QSoft is arguing that MSB&COD should have conducted its examination earlier than it did, this argument is not supported by any regulatory or statutory requirement. FAR 19.805-2(c)(2). Additionally, although QSoft asserts that it had a remedial plan in effect, the evidence submitted by QSoft to support its assertion demonstrates only that in October 1992, SBA was considering QSoft's plan. We find no facts to suggest that the contracting officer should have been alerted to a flaw in MSB&COD's decision. Further, given that the statute does not permit even an administrative appeal of decisions concerning remedial plans, if we were to find that the contracting officer should have been aware of some inadequacy in MSB&COD's process, we are not certain what duty, if any, we would impose upon the contracting officer. QSoft argues that it must be an interested party because it is participating as an intervenor in a protest concerning this procurement currently pending before the General Accounting Office (GAO). This argument is not persuasive. Assuming that GAO's definition of "interested party" is the same as ours, we do not know whether GAO has considered the propriety of permitting QSoft to participate in its protest. Even if our definitions are identical and even if GAO has decided to permit QSoft to participate, we would not be bound by GAO's decision. QSoft also argues that we possess jurisdiction to entertain a protest concerning the propriety of any agency decision, no matter whether the decision was made by a contracting officer or by someone else within the agency, not acting for the contracting officer in connection with the procurement. We disagree. Our authorizing legislation is quite clear and cannot be read as broadly as QSoft would like. Finally, QSoft argues that it has an economic interest in the award of this contract because, QSoft alleges, the contracting officer determined that QSoft was in line for award in September 1992. Even though we will accept QSoft's allegation as true, its argument fails. After September 1992, the solicitation was amended six times and offerors were permitted to submit revised proposals, so any conclusion reached by the contracting officer in September 1992 is of no consequence. More important, as we explain above, MSB&COD -- not the contracting officer -- was responsible for determining whether QSoft is eligible for award and MSB&COD determined that QSoft is not eligible. Because QSoft is not eligible for award, it is immaterial that, at some point during the rather lengthy history of this procurement, the contracting officer might have determined that QSoft was in line for award. Decision Because MSB&COD determined that QSoft is not eligible for award, QSoft lacks a direct economic interest in the award and so is not an interested party. For this reason, we lack jurisdiction to consider this protest. SBA's motion to dismiss is granted and the protest is DISMISSED FOR LACK OF JURISDICTION. The suspension of SBA's procurement authority lapses by its terms. _______________________________ MARTHA H. DeGRAFF Board Judge We concur: ____________________________ ______________________________ VINCENT A. LaBELLA ANTHONY S. BORWICK Board Judge Board Judge