Section 864 of the National Defense Authorization Act for Fiscal Year 2022 authorized the U.S. Small Business Administration’s (SBA) Office of Hearings and Appeals (OHA) to decide all appeals from Historically Underutilized Business Zone (HUBZone) status protest determinations, which are currently decided by SBA’s associate administrator of Government Contracting and Business Development. The SBA recently issued a final rule implementing this new authority. Key provisions in this final rule — which has an effective date of May 10, 2023 — are discussed below.
The final rule revises the HUBZone regulations at 13 CFR 126.805 to specify that HUBZone appeals are processed by OHA in accordance with the procedures set forth in part 134. The final rule also amends the regulations relating to OHA’s jurisdiction at subparts A and B of 13 CFR part 134 to include appeals from HUBZone status protest determinations. Finally, the final rule creates a new subpart M in 13 CFR part 134 to set out the rules of practice for appeals from HUBZone status protest determinations.
Among the final rule’s key provisions are:
- Section 134.1303 provides that an appeal from a HUBZone status protest determination must be filed within 10 business days after the appellant receives the protest determination.
- Section 134.1304 provides that if a timely appeal of a HUBZone status protest determination is filed after contract award, the contracting officer must consider whether performance can be suspended until an appellate decision is rendered. This section also provides that where an appeal is filed before contract award, the contracting officer must withhold award until the appellate decision is rendered, unless the contracting officer has determined that award and performance of the contract is in the best interests of the government.
- Section 134.1305 provides that an appeal petition must include the following: a copy of the protest determination; the date the appellant received the protest determination; a statement that the petitioner is appealing a HUBZone status protest determination issued by the director of SBA’s Office of HUBZone; a full and specific statement as to why the HUBZone status protest determination is alleged to be based on a clear error of fact or law, together with arguments supporting such allegation; the solicitation number, the contract number (if applicable), the name, address, and telephone number of the contracting officer; and the name, address, telephone number, facsimile number, and signature of the appellant or its attorney.
- Section 134.1308 provides that the standard of review for an appeal of a HUBZone status protest determination is whether the director of SBA’s Office of HUBZone’s determination was based on clear error of fact or law. This section also provides that the appellant bears the burden of proof by a preponderance of the evidence.
- Section 134.1310 states that responses to an appeal are to be filed within 15 business days after service of the appeal petition.
- Section 134.1311 states that there will be no discovery or oral hearings in appeals from HUBZone status protest determinations.
- Section 134.1314 provides that OHA will decide an appeal within 45 calendar days after the close of record.
- Section 134.1316 provides that OHA may reconsider an appeal decision within 20 calendar days after the decision is issued, or OHA may remand a proceeding to the D/HUB for a new HUBZone status protest determination.
As noted above, this rule is effective on May 10, 2023. If you have any questions about HUBZone protests or appeals, please do not hesitate to contact Aron Beezley or Lisa Markman.