GOVERNMENT CONTRACTS GROUP ENEWS – DECEMBER 10, 2004
Bidder’s Failure to Challenge Pre-award SBA Size
Determination Precludes Remedy
Bidders protesting a Small Business Administration ("SBA") size determination of an announced
awardee must file their protest before contract award. Failure to do so may preclude a remedy. This
issue was addressed in the recent U.S. Court of Federal Claims decision, Chapman Law Firm v. United
States and Harrington, Moran, Barkdale, Inc. ("HMBI"), No. 04-1553 C.
In Chapman, the Department of Housing and Urban Development ("HUD") issued a small business setaside solicitation for management and marketing services. On July 7, 2004, the contracting officer
issued a pre-award notice to Chapman advising of HUD’s intent to award the contract to HMBI. On July
8, 2004, Chapman filed a size protest with SBA challenging HMBI’s eligibility for award. The SBA
issued its size determination on July 23, 2004, concluding HMBI was a small business. On July 30,
2004, HUD awarded the contract to HMBI. On August 9, 2004, ten days after the award, Chapman
appealed the size determination to SBA’s Office of Hearings and Appeals ("OHA") which, in turn,
affirmed the size determination. Chapman filed the present action requesting the Court remand the
matter to OHA.
The Court, however, determined that it could not provide Chapman relief. FAR 19.302 provides that a
contract award is presumed to be valid if the award was made before an appeal is filed with SBA’s
OHA. FAR 19.302 also provides that a ruling by SBA’s OHA that is received by the contracting agency
after a contract award does not affect the awardee’s size status for the challenged procurement, but
rather applies to future procurements. The Court explained that the "FAR specifically directs that,
because Chapman did not file its appeal with OHA until ten days after the contract award, any decision
reached by SBA’s OHA would not affect the award of the contract." The Court stated:
By failing to appeal promptly the decision of SBA Area Office,
plaintiff has forfeited its opportunity to affect the current
contract award under the applicable regulations. Because
plaintiff did not file its appeal prior to the contract award and
OHA did not issue a decision before HUD awarded HMBI the
contract, the award of this contract in unchallengeable on SBA
size determination grounds. Citation omitted. Because the
court is unable to supply the relief plaintiff seeks in its motion
for preliminary injunction, the court finds that plaintiff’s claim is
not justiciable.
The Court held that its finding of non-justiciability was also a finding on the merits and, therefore,
dismissed the protest.
If you have any questions, please contact any attorney in the Preston Gates government
contracts group at www.prestongates.com.
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