House-Approved 2022 NDAA Makes HUBZone Changes, Including HUBZone Appeals

The House-passed version of the 2022 National Defense Authorization Act would make some significant changes for the HUBZone program. Among them are the ability to have HUBZone appeals heard by administrative judges. Below is a summary of the key changes The House version of the 2022 NDAA includes some amendments that could come about if they are all included in the final law.

HUBZone Appeals

The first one is HUBZone appeals. The House version of the NDAA provides authority for SBA Office of Hearings and Appeals judges to hear all appeals from formal protest determinations in connection with the status of a concern as qualified HUBZone small business concern.

Currently, if a HUBZone status protest is sustained, the only “appeal” process is to request a review by the SBA’s Associate Administrator, Office of Government Contracting & Business Development. There is no opportunity to seek a decision from an administrative judge, no way to review or cite to prior published decisions to use as precedent, and no ability to review any administrative record of the decision. These appeals are considered very quickly, within 5 business days of the filing, and there is no opportunity for additional briefing after the initial filing.

As we’ve discussed previously, OHA’s current lack of jurisdiction makes the HUBZone Program different from the other three major socioeconomic contracting programs (SDVOSB/VOSB, WOSB/EDWOSB and 8(a)), all of which allow OHA appeals in some circumstances.  (While there are no status protests in the 8(a) program, 8(a) appeals are sometimes allowed for companies whose applications are denied).

The current language in the House-approved NDAA states:

Not later than 1 year after the date of the enactment of this Act, the Administrator of the Small Business Administration shall issue a rule authorizing the Office of Hearings and Appeals of the Administration to decide all appeals from formal protest determinations in connection with the status of a concern as qualified HUBZone small business concern (as such term is defined in section 31(b) of the Small Business Act (15 U.S.C. 657a(b)).

We’ll have to see if this provision makes it into the final NDAA. If so, that will be a significant change to the administrative process for HUBZone appeals.

HUBzone Price Preference

Another proposed change to the HUBZone rules would clarify that the HUBZone Price Evaluation Preference applies to certain orders under unrestricted contracts. The legislative text, if approved, would make the HUBZone price evaluation preference applicable to “an unrestricted order issued under an unrestricted multiple award contract or the unrestricted portion of a contract that is partially set aside for competition restricted to small business concerns.” This would make clear that the price preference must be applied at the order level, not just the base contract level, for purposes of price competition.

Finally, as we wrote about earlier, HUBZone contracts, along with those of other major socioeconomic preference programs, would have a higher sole source cap, up to $8 million.

These changes would make some small but significant changes to the HUBZone program. Stay tuned to SmallGovCon and we will keep you posted on this initiative and other important proposals in the 2022 NDAA.

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