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OHA Lacks Jurisdiction to Hear HUBZone Status Appeals

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Koprince Law LLC

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While the SBA’s Office of Hearings and Appeals hears appeals for many of the SBA’s programs, there are certain decisions that remain outside of its purview.

As one protester was surprised to learn, among those items outside of OHA’s jurisdiction are appeals of the HUBZone status determinations.

In JEQ & Co., LLC, SBA No. SIZ-5932 (June 7, 2018), the Defense Logistics Agency issued a solicitation for castellated nuts, a type of machine part. The Solicitation was entirely set-aside for HUBZone concerns under NAICS 332722 (Bolt, Nut, Screw, Rivet and Washer Manufacturing), which had a corresponding size standard of 500 employees.

After reviewing proposals, the agency awarded the contract to ATF Aerospace. The following day, JEQ filed a protest challenging ATF’s size and HUBZone status. JEQ’s protest contained one assertion: “Per the Small Business Administration’s (SBA) Dynamic Small Business Search (DSBS) [database], [ATF] is not a HUBZone Certified Concern. [ATF] is not even a small business.” JEQ did not include any other documents or details in its protest.

The Area Office subsequently dismissed JEQ’s protest as non-specific. According to the Area Office, JEQ’s protest did not furnish any information to impugn ATF’s status as a small business. To the contrary, the Area Office specifically noted ATF’s DSBS profile does list that it is small under the Solicitation’s size standard.

From OHA’s summary of the decision, the Area Office did not appear to address JEQ’s allegations that ATF was not a HUBZone. While not expressly explained in the decision, the Area Office’s silence on this issue is likely due to the fact that Area Offices are not responsible for investigating HUBZone status protests. Instead, HUBZone status protests are to be forwarded to SBA’s HUBZone Director, or “D/HUB”. As such, the Area Office lacked jurisdiction to even consider the HUBZone challenges JEQ raised.

Nevertheless, JEQ appealed the dismissal to OHA. Interestingly, JEQ abandoned its protest of ATF’s size, and instead renewed its allegation that ATF was not an eligible HUBZone concern.

Unlike status protests of woman-owned or service-disabled veteran-owned small businesses, appeals of HUBZone status determinations are heard by the SBA Associate Administrator, Office of Government Contracting & Business Development (or “AA/GC&BD” in SBA parlance). OHA has interpreted this regulation to mean HUBZone status determination appeals are outside of its authority. Citing a number of its earlier decisions on this point, OHA explained that it “lacks jurisdiction to decide HUBZone status protests or appeals of HUBZone status determinations.” Accordingly, OHA denied JEQ’s appeal.

As JEQ discovered, OHA does not have jurisdiction to resolve appeals of status determinations for all of the SBA’s socioeconomic programs; HUBZone status determinations being a notable exception.

Whether this exception makes sense is an open question. OHA has a well-developed set of procedures for handling appeals, and has considerable experience with various SBA programs. OHA also publishes its decisions, which offers the public considerable insight into how the SBA applies its rules, and helps ensure consistency among similar cases.

It certainly stands to reason OHA would be an ideal choice for hearing HUBZone status appeals. The SBA’s regulations, however, have not taken this approach. As such, businesses interested in appealing HUBZone status determinations should not file with OHA.


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