SBA OHA: Contracting Officer’s Termination Decision Won’t Change Size Appeal Deadline

Following a size determination, any person adversely affected by that determination may file an appeal with the SBA’s Office of Hearings and Appeals. To be timely, the appeal has to be filed within 15 calendar days from the date the person receives the determination. If not timely-filed, the appeal will be dismissed.

This 15-day deadline is strict. The OHA doesn’t have the power to extend it, even if good reason exists to do so. In fact, the OHA’s recent decision in Sentient Digital, Inc. dba Entrust Government Solutions, SBA No. SIZ-5963 (2018) makes clear that this deadline applies even when an agency changes its decision to terminate a contract following an adverse size determination.

The facts in Sentient Digital are fairly straightforward. Following its award under a solicitation seeking IT engineering support services, a disappointed offeror challenged Sentient’s small business eligibility under the solicitation’s $27.5 million size standard. On August 23—about a month-and-a-half after the award decision was announced—the SBA found Sentient ineligible based on its affiliation with an ostensible subcontractor.

The following day, the contracting officer reached out to Sentient to ask whether it would appeal the determination. The contracting officer also said that he was considering whether to terminate the award or to allow Sentient’s performance to continue for the base period. In response, Sentient told the contracting officer that it would appeal only if the agency intended to terminate the contract. On August 31, the contracting officer told Sentient that it would not terminate the contract.

Sentient’s deadline to appeal the determination expired on (or around) September 10. But on September 12, the contracting officer informed Sentient that the agency was still considering whether to terminate the contract following the size determination—contradicting what the agency had said just a few weeks earlier. On September 20, the agency then said that, unless Sentient appealed the determination, the contract would likely be terminated.

Following this back-and-forth, Sentient appealed the size determination on September 26. Though it conceded that the 15-day appeal deadline expired, Sentient nonetheless argued that its appeal should be considered timely because it relied on the contracting officer’s representations about the award termination.

Citing the 15-day deadline, OHA dismissed the appeal as untimely. Doing so, it noted that there are “no exceptions” to the regulations’ 15-day deadline. It simply does not matter whether (or how) an agency will react to the size determination; an appeal must be filed within 15 days, no matter what:

There is nothing in the regulation which permits an appellant to rely upon the word of a procuring agency to extend the time limit for filing a size appeal. Indeed, the regulation prohibits OHA from extending the deadline for filing an appeal. The fact that the CO initially indicated [the agency] would not terminate the award does not alter the time limit Appellant faced after receiving the size determination. Appellant relied upon the CO’s word to its detriment. The regulations mandates that I dismiss this appeal.

Though this result seems a bit harsh, I think the OHA got it right. The SBA’s regulations do not include any exceptions to the 15-day timeliness rule. And although the contracting officer might have changed his position on contract termination, this doesn’t change the fact that, together with its ostensible subcontractor, Sentient was too large to be eligible. Allowing Sentient to wait to appeal an adverse decision until it knows whether it would lose an award it wasn’t actually entitled to would only disrupt the contracting process.

So what’s the lesson from Sentient Digital? Simple: if you’re thinking about appealing a size determination, make sure that your appeal is timely-filed—even if you have a good excuse for being late.