SBA SIZE PROTEST LAW: Government Contract Law Firm - Size Protests and Appeals

In negotiated procurements, a size protest “must be received by the contracting officer prior to the close of business on the 5th day, exclusive of Saturdays, Sundays, and legal holidays, after the contracting officer has notified the protester of the identity of the prospective awardee.” 13 C.F.R. § 121.1004(a)(2).  Thus, if you are considering a size protest, it is imperative that you prepare ahead if at all possible.

In a recent case , Size Appeal of Global Dynamics, LLC, SIZ-5979 (December 17, 2018), the SBA Area Office rejected a size protest as untimely because it was not filed within 5 business days after the original award to GiaCare and MedTrust JV, LLC (“GiaMed”).  The Office of Hearing and Appeals held the SBA was wrong.

Here, the agency took corrective action after original award to GiaMed in response to a GAO bid protest. The agency cancelled the award to GiaMed, reopened discussions and obtained revised proposals. The agency ultimately awarded the contract to GiaMed again.  The protester then filed a size protest within 5 days of this second award.

OHA held that the 5-day period to file a protest started after the second award, not the first.  OHA noted that “an award notification will not trigger the deadline for filing a size protest if the procuring agency subsequently takes actions that are inconsistent with that award notification.” Thus, because the agency had cancelled the first award and obtained revised proposals, these actions demonstrated that the “evaluation process was not complete” and that the original award notification “was no longer valid.”

I find it hard to understand why the SBA rejected the protest as untimely in the first place. After all, once the agency cancelled the first award and rendered a new award decision, it opened the door to a size protest within 5-days of that new award.

Size Appeal of Global Dynamics, SIZ-5979 (December 17, 2018)

Posted in OHA Appeals

On October 9, 2018, the SBA Office of Hearings and Appeals (“SBA OHA”) dismissed a size protest as untimely.  When a size protest is sent to the Contracting Officer, it is then transmitted to the SBA Area Office.  The SBA Area Office has 15 days to issue a size determination.  If the contractor does not agree with the size determination, the contractor can file an appeal to SBA OHA within 15 days after receipt of the size determination.

In this case, the Area Office issued a determination finding that the contractor was not a small business. But, the Contracting Officer told the contractor that the contract would not be terminated because the SBA Area Office did not issue a size determination within 15 calendar days.  Give this assurance, the contractor saw no need to appeal the size determination.

Unfortunately, the Contracting Officer later flipped flopped and said he would terminate the contract because the SBA Area Office determined that the contractor was not small. The contractor filed an appeal with SBA OHA. SBA OHA, however, dismissed it because it was not filed within the 15-day deadline. SBA OHA held that it had no other choice:

An appellant must file a size appeal within 15 calendar days after receipt of the size determination. 13 C.F.R. § 134.304(a). Filing is the receipt of the appeal at OHA. 13 C.F.R. § 134.204(b). Here, Appellant concedes that it received the size determination no later than August 24, 2018. Appeal at 4. Appellant did not file its appeal until September 26, 2018. Appellant concedes it filed its appeal after the expiration of the deadline. Appellant pleads in mitigation of its actions the long time the Area Office took to issue the size determination and the CO’s initial assurance that MSC would not terminate the award. Neither of these factors is relevant here. The regulation is clear; a size appeal must be filed within 15 days of receipt of the size determination. There are no exceptions. There is nothing in the regulation which permits an appellant to rely upon the word of a procuring agency to extend the time limit for filing a size appeal. Indeed, the regulation prohibits OHA from extending the deadline for filing an appeal. 13 C.F.R. § 134.202(d)(2)(i)(A). The fact that the CO initially indicated MSC would not terminate the award does not alter the time limit Appellant faced after receiving the size determination. Appellant relied upon the CO’s word to its detriment. The regulation mandates that I dismiss this appeal.

The lesson learned here is do not rely on the Contracting Officer’s promise not to terminate the contract.  If faced with a adverse SBA Area Office size determination, appeal it within 15 calendar days if you disagree.

Posted in OHA Appeals

On December 4, 2017, the SBA Office of Hearing and Appeals (“OHA”) denied an appeal by Serviam Construction, LLC. We represented the firm challenging their size. We argued that Serviam was affiliated with several other family businesses and therefore it was not a small business. The SBA Area Office agreed and found Serviam to be other than small. Serviam appealed this determination.

On appeal, Serviam raised arguments that were not presented to the SBA Area Office. OHA held that it “will not overturn a size determination based on arguments that were never raised to the area office. It is well settled law that “an area office cannot have erred by failing to address information or arguments that were never presented to it in the first instance.” This case emphasizes the importance of raising all possible arguments to the SBA Area Office. 

Size Appeal of Serviam Construction, LLC (SBA No. SIZ-5872)

Posted in OHA Appeals