/ Published in Government Contract Law

Proposed Change to FAR Seeks to Revise Protest and Appeal Procedures for Small Business Size and Status Protests

On March 7, 2013, a proposed rule was released seeking to amend several clauses of the FAR addressing protests and appeals of small business size and status, in order to bring them in line with SBA regulations. “The objective of these changes is to provide in the FAR, procedures to assure that contracts set-aside for small businesses are awarded to eligible small businesses.” 78 FR 14746. The proposed rule suggests that it will indirectly benefit legitimate small business concerns by preventing awards of small business set-asides to ineligible companies. The proposed rule targets businesses that are not small or ineligible in terms of status as a HUBZone, service-disabled veteran-owned (SDVOSB), or women-owned small business (WOSB).

Where a protest is filed with a contracting officer challenging the size of a business holding itself out to be a small business, the contracting officer must refer the size protest to the SBA. Under the existing FAR clause (FAR § 19.302), the SBA must issue a size determination within 10 business days. If the SBA does not issue its size determination within that 10 day period, the contracting officer may proceed with award to the challenged firm.

In an effort to ensure the SBA has time to issue a proper determination, the proposed rule increases the amount of time given to the SBA to make a size determination to 15 business days. In addition, the proposed rule gives contracting officers the ability to grant an extension to the SBA to make its size determination. If the SBA does not issue its size determination within the 15 day period, or within any granted extension period, the proposed rule prevents contracting officers from proceeding with an award to the challenged firm unless he or she determines in writing that waiting for the SBA determination will be disadvantageous to the Government. The new rule also allows the SBA, on its own initiative, to reopen a formal size determination to correct an error or mistake.

The proposed rule also addresses protests of a firm’s status as either a HUBZone small business (FAR § 19.306), an SDVOSB (FAR § 19.307), or a WOSB (FAR § 19.308). The proposed revisions address:

  • The information that must be included with the protest;
  • The time frames for submittal of a protest by an interested parties (generally 5 days);
  • The actions the contracting officer must take before and after receiving an SBA determination;
  • The actions the contracting officer must take if there has or has not been a timely appeal filed;
  • The requirements for concerns determined by the SBA to be ineligible in either size or status to represent itself under one of the SBA small business categories.

The new regulations in the proposed rule do not appear to impose any new burden on small businesses wishing to file a size or status protest. Rather, the new regulations aim to unify the FAR with SBA regulations, and increase the possibility that a procurement set-aside for small business is actually awarded to a small business.

The proposed rule released on March 7, 2013 is open for public comment for 60 days, which will close on May 6, 2013.