• Big Changes for Small Business: Revisions to Protest and Appellate Procedure
  • August 19, 2014 | Authors: Edward T. DeLisle; Maria L. Panichelli
  • Law Firm: Cohen Seglias Pallas Greenhall & Furman PC - Philadelphia Office
  • Attention all small business owners!  As a result of a final rule issued by the FAR Council on July 25, requirements for protesting small businesses size and eligibility status are changing effective August 25, 2014.  This rule, which finalizes an interim rule issued on March 7, 2013, updates size and eligibility status protests and appeal procedures governing small businesses, and provides uniformity for protests involving HUBZones, service-disabled veteran-owned small businesses(“SDVOSBs”), economically disadvantaged women-owned small businesses (“EDWOSBs”) and women-owned small businesses (“WOSBs”).  The biggest changes are outlined below.

    Size Protests

    First, with regard to small business size protests, the rule revises FAR § 19.302 to require additional information from a protesting party.  The amended regulation provides that each small business size protest must be accompanied by a written referral letter from the contracting officer, which contains pertinent information regarding the solicitation.  The required  information includes a copy of the concern’s self-certification for size; identification of the applicable size standard; a copy or link to the solicitation; identification of the bid opening date or the date of notification provided to unsuccessful offerors; the date the contracting officer received the protest; and contact information for both the contracting officer and the protesting party.  In addition, the protesting party may now deliver its protest via facsimile or email, in addition to delivering it by hand, telegram, or letter.  To be timely, the protest must be filed within five business days from either the date of bid opening (sealed bids) or the date notification is provided to a successful offeror (negotiated procurement).  A protest filed before the applicable triggering event will be dismissed by the SBA as premature.

    The new rule also increases the time for the SBA to make a determination of a protested businesses size from 10 to 15 days.  Under the new rule, the contracting officer may, at the end of 15 days, further extend the amount of time to respond, if necessary.  Most importantly, should the SBA fail to make a size determination, the new rule provides the contracting officer with the discretion to award the contract anyway.

    If a protested concern disagrees with the SBA’s size determination, the new rule provides that it is within the discretion  of the SBA’s Office of Hearing and Appeals (“OHA”) to accept an appeal.  The rule further provides that the SBA may, at its sole discretion, reopen a formal size determination to correct an error or mistake if it is within the appeal period, even if no appeal has been filed with OHA.

    In addition to these modifications, the rule makes one rather troubling change.  It eliminates the portion of FAR 19.302(f), which allows the protested concern to file SBA Form 355 and a statement responding to the allegations contained in the protest, along with evidence to support that statement.  While the SBA regulations provide for such a response, the deletion of this provision from the FAR is nonetheless an unwelcome change.

    Status Protests

    The rule also provides for certain changes to status (e.g. HUBZone, EDWOSB, etc.) protests.  First, all status protests and appeals must be made in accordance with the new procedures outlined above for size protests.  If an interested party is protesting both the size and status of the projected successful bidder, that party must file two separate protests.

    In the case of VOSB/SDVOSB status protests, or WOSB/EDWOSB protests, the protestor must establish either that the owner(s) cannot provide documentation to show that they meet the appropriate definitional standards, or that the protested concern is not unconditionally owned or controlled by one or more individuals that meet that standard.  Finally, for a HUBZone concern, the SBA will entertain a protest of the business’s status if evidence is presented showing that the business’s principal office is not located in a HUBZone or that less than 35% of the business’s employees reside in a HUBZone.  Absent these specific supporting facts, the SBA must reject the status protest.