First OHA HUBZone Appeal Debuts on the Docket

It’s here–the first ever SBA Office of Hearings and Appeals (OHA) HUBZone appeal decision! Sure, it is a very short decision and a dismissal–in fact, one reiterating some of the limitations of the new appeal avenue. But that doesn’t make it any less important. This is still SBA OHA’s first ever HUBZone appeal decision, only made possible by the SBA’s recent issuance of a new rule allowing HUBZone appeals (again, in limited circumstances). Let’s take a closer look.

That’s right! The SBA’s OHA has issued its first ever Historically Underutilized Business Zone (HUBZone) appeal decision. OHA’s decision in New Source Corp., SBA No. HUB-101, 2023 (June 27, 2023), was a pretty short read, ultimately resulting in OHA’s dismissal of the appeal. But it will still go down in history as a first, nonetheless. Before we get into the decision, let’s talk a little about recently implemented SBA rule and the new OHA HUBZone appeal avenue it created.

We previously blogged on this new SBA rule both here and here. So, I won’t go too far into the weeds since you can read all the juicy details in our prior blogs. But in a nutshell, as of May 2023, OHA has jurisdiction to hear appeals from adverse status determination protests for certified HUBZone small businesses. But notably, this jurisdiction is limited. The new rule expressly limits OHA’s newfound jurisdiction for HUBZone appeals to “[a]ppeals from HUBZone status protest determinations under” SBA’s HUBZone Program regulations. So, OHA still lacks jurisdiction to hear other types of HUBZone appeals, including those from HUBZone certification application denials and HUBZone Program terminations.

In fact, OHA’s first official HUBZone appeal decision, issued on June 27, 2023, reiterates OHA’s limitations when it comes to HUBZone appeals. As OHA explains in its decision, the Appellant in New Source Corp. sent OHA an email aiming to “appeal” SBA’s decision to decertify it from the SBA’s HUBZone Program. But OHA found this “appeal email” to be deficient for a number of reasons. So, it ordered the Appellant to show cause why the appeal should not be dismissed. Relying on an important limitation to the new OHA HUBZone appeal process, OHA said:

[T]he appeal did not appear to pertain to a HUBZone status protest, nor was the appeal accompanied by a copy of any formal protest determination made by the Director of SBA’s Office of HUBZone (D/HUB) in connection with a HUBZone status protest. Furthermore, Appellant did not represent itself as either the protested concern or the protestor for a HUBZone procurement affected by a HUBZone protest. As a result, OHA apparently lacks subject matter jurisdiction over this dispute.

The appeal was also found deficient for: being unsigned; not being served to the D/HUB and other required parties; not alleging any error by the D/HUB; and being sent by the Appellant’s “Marketing Director,” which OHA noted may not even be permitted to represent the Appellant in an OHA appeal. In response to OHA’s show cause notice, the Appellant attempted to correct some of these deficiencies (i.e., providing an official appeal petition signed by its President alleging “negligence” and “lack of assistance and responsiveness from HUBZone support staff”–with some supporting documentation). But it did not address the biggest deficiency: OHA’s lack of subject matter jurisdiction over general HUBZone decertifications.

Without subject matter jurisdiction, OHA had to dismiss the appeal. Again, SBA’s new rule provides an avenue for HUBZone appeals strictly limited to appeals from adverse status determination protests for certified HUBZones. And as OHA notes in the excerpt above, this generally requires that an appellant be either the protested concern or the protester in such a status determination protest to have standing for the appeal.

So, even though the contents of this decision don’t seem particularly memorable, it is still OHA’s first ever HUBZone appeal decision. And it reiterates an important limitation on OHA’s HUBZone appeal jurisdiction. So for those reasons, we at SmallGovCon are pretty stoked to see it anyway. We are hoping this is the first in a long line of OHA HUBZone appeal decisions that serve to bring more transparency and consistency to SBA’s HUBZone Program.

Questions about this post? Email us. Need legal assistance? call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedInTwitter and Facebook.