SBA CVE Protests and Appeals: Coming October 1

The SBA will begin hearing protests and appeals related to inclusion in the VA’s SDVOSB/VOSB CVE database on October 1, 2018.

On March 30, the SBA published a final rule, which responded to public comments made on the proposed rule issued last year.  SBA’s Office of Hearings and Appeals will begin deciding these cases in the fall.

I blogged on the SBA’s proposed rule in October.  Most of the proposed rule will take effect as-is, and I won’t rehash those items here (although I do encourage you to read my October post for a refresher).

The SBA did make a couple notable changes in response to public comments.

First, SBA has clarified that when a CVE protest pertains to a particular procurement, “SBA should examine eligibility at two separate points: (1) As of the date the concern submits its bid or initial offer, which includes price; and (2) as of the date the CVE protest was filed.”  This is in keeping with VAAR 852.219-10(b), which requires an SDVOSB to be eligible both on the date of bid and date of award. It varies from the SBA rule applicable to non-VA procurements, under which, ordinarily, “[a] concern that represents itself and qualifies as an [SDVOSB] at the time of initial offer (or other formal response to a solicitation), which includes price . . . is considered an [SDVOSB] throughout the life of that contract.”

Second, the SBA amended the proposed rule to state that a contract awarded to an ineligible company shall be “rescinded” rather than “terminated.”  This sounds like meaningless legalese, but there’s an important difference.  If a contract is terminated for convenience, the terminated company ordinarily may recover its costs.  But if a contract is rescinded as “void ab initio,” the contract is treated as though it never existed–hence, I assume, no “T for C” recovery.

Several commentators asked the SBA to change its proposed timelines.  For example, three commentators stated that 10 business days is too short a time frame to file a CVE Appeal and requested 30 calendar days.  The SBA rejected these requests, sticking with the shorter timeline in the proposed rule.  The SBA similarly rejected a request that OHA issue CVE Appeal decisions in 30 days instead of 60 days as set forth in the proposed rule.

The most important part of the final rule, of course, is that it is final.  SDVOSBs and VOSBs have long asked for an independent administrative appeal route when it comes to CVE database issues.  Starting on October 1, they’ll have one.