Government Contracts Monitor

Size Protests – Beware: Your Protest Deadline May Be Triggered by Indirect Notice

November 18, 2014

A recent decision by the Small Business Administration (SBA) Office of Hearings and Appeals (OHA) reminds potential size protestors that the “notice” triggering the five business day size protest period in a negotiated procurement does not have to be in writing, nor does it have to come from the cognizant contracting officer (CO), and may even be indirect, including by published announcements, such as FedBizOpps or even, as in this case, a routine GWAC task orders summary or “snapshot.” See Size Appeal of Quality Technology, Inc., SBA No. SIZ-5611, decided Oct. 27, 2014.

As you may know, FAR 15.303(a)(2) explicitly requires COs, when using a small business set-aside, to “notify each offeror in writing prior to award” as to the name and address of the apparently successful offeror, except where the CO determines, in writing, that urgency necessitates award without delay or the contract is under SBA’s 8(a) program. Under the FAR, an offeror’s receipt of this written notice triggers the start of the five business day time period to file a size protest with the CO challenging the size status of the apparently successful offeror. FAR 19.302(d)(1). Many companies mistakenly believe that, under these provisions, they can sit back and wait to file a size protest until they receive this “required” written notice.

However, size protest timeliness is determined by SBA, which applies its own regulations, and not the FAR. SBA’s regulations are different and broader than the FAR provisions. Importantly, SBA’s regulations address the situation where a written notice is not required or, for whatever reason, is not provided. In such case, SBA’s regulations state that “the 5-day protest period will commence upon oral notification by the contracting officer or authorized representative or another means (such as public announcements or other oral communication) of the identity of the apparent successful offeror.” 13 C.F.R. § 121.1004(a)(5). Under this more expansive framework, an offeror waiting for a written notice would be untimely if it was otherwise earlier notified of the apparent successful offeror.

This is precisely what happened in Quality Technology. The case arose out of a small business task order set-aside under the Alliant Small Business (ASB) Government-Wide Acquisition Contract (GWAC). The CO awarded the task order to Vistronix, LLC on March 11, 2014. However, the CO failed to notify the unsuccessful offerors, either in advance or promptly after the award. On April 4, 2014, a GSA business development specialist at GSA emailed a contract “snapshot” to the ASB contract holders, including Quality Technology. This “snapshot” indicated, among a listing of numerous task orders, that the subject task order had been awarded to Vistronix. Ten days later, on April 14, 2014, Quality Technology’s President sent an email to the specialist, inquiring about this task order, stating that an award to Vistronix “would be impossible” and that Quality Technology had not been “officially” notified of such award by the CO. The specialist responded that the snapshot was derived from database information, and commented, “Looks like this is a matter of garbage in … garbage out. I’ll get it cleaned up.” Quality Technology did not contact the CO or otherwise pursue this at that time. The specialist subsequently emailed Quality Technology on April 30. 2014, stating that award of the task order was “more of a contracting issue,” and that the specialist would not “reach out to [the contracting office] without a few more facts.” Quality Technology’s President replied that “The reason why no one (including us) has protested on the size issue is that [the contracting office] DID NOT NOTIFY US OF AWARD! If not for you and the snapshot, we’d still be sending them emails to get a status every couple of weeks.” By letter of May 5, 2014, the contracting office formally notified Quality Technology of the award to Vistronix. Quality Technology protested Vistronix’s size status later that same day.

The SBA Area Office dismissed the protest as untimely on unrelated grounds, and Quality Technology timely appealed to OHA. Vistronix intervened and challenged the timeliness of the protest based upon the notice provided by the snapshot. Vistronix argued that, while SBA’s regulations do not define the term “notice” or explain what constitutes notice for purposes of beginning the 5-day protest window, OHA generally has derived the meaning of undefined terms by looking to their common everyday meaning. Vistronix pointed to 13 C.F.R. § 121.1004(a)(5), and argued that the language clearly encompassed the instant situation.

OHA agreed, stating that “the regulations do not require that notice be in writing, or that such notice be communicated directly from the CO.” OHA noted that, in prior cases, OHA has found that protestors received “adequate notice” through postings on FedBizOpps, and, in one case, through a notice advising GAO of an intent to award to a specific offeror served on the protestor’s counsel. OHA seems to have been influenced here by the fact that the exchanges evidenced that Quality Technology had “received, reviewed, and understood the [snapshot] report,” and thus “had not only constructive notice but actual notice of the award to Vistronix.” OHA also bought Vistronix’s argument that Quality Technology failed to exercise “proper due diligence” upon learning of the apparent award. OHA finally rejected Quality Technology’s policy argument based upon the high burden of vigilance, noting that Quality Technology had received actual notice. OHA stated that, in any event, “OHA will not adjudicate disputes over the policies reflected in SBA regulations,” and that “it is well-settled that OHA ‘has no authority to determine the validity of the size regulations.’”

This decision reinforces that small businesses need to be vigilant and watch for public notices regarding pending procurements, including even indirect items such as the snapshot issued here, in order to protect their size protest rights. This includes notifying others within the company of ongoing procurements and the need to immediately notify management if and when any verbal or written information is received pertaining to such procurements. The five-day protest period already is very tight, and companies need to stay on top of pending awards and not simply assume that they can wait to receive a formal written notice of proposed award.