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SBA Adopts Changes in Size Protest Rules

Changes in SBA’s protest rules give the agency a new tool to ensure that ineligible businesses do not receive set-aside contracts.

The changes will encourage procuring agencies to postpone awarding a contract in case of a size protest or a protest that the awardee is ineligible for an 8(a), HUBZone, service-disabled veteran or woman-owned business set-aside. According to an analysis by the Venable law firm, if an agency awards a contract after a size or status protest is filed, but before SBA issues a decision, the contract must be terminated if the protest is sustained.

Previously, Venable says agencies often ignored a size or status protest, awarded the contract anyway, and refused to terminate it if the protest was sustained. “SBA’s final rule makes it much more likely that filing and prosecuting a meritorious size protest will result in meaningful relief—i. e., contract award,” Venable said.

Under the final rule, if an agency waits for SBA’s initial protest decision before awarding a contract, and the protest is initially denied, the contract will not have to be terminated even if the protest is sustained on appeal.

Another rule change protects small businesses who make offers on solicitations that are later substantially modified, requiring companies to submit a revised offer. In that case, the offerors will no longer be required to recertify that they are still eligible for the small business award.

SBA said companies that have incurred the expense of submitting an offer should not be punished if an “agency’s requirement changes during the course of a protracted procurement.”

SBA said that if the agency’s requirements changed so drastically that the offers are no longer responsive, the agency should cancel and re-issue the solicitation to all potential offerors.


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