SBA OHA Decides First EDWOSB Eligibility Appeal

My daughter is learning to take her first steps, while holding onto the furniture.  Yesterday, she started pushing her stroller around the living room, essentially using it as a walker.  My wife and I looked at each other and said something like, “things are about to get really interesting around here.”

Things are also about to get interesting when it comes to the women-owned small business program, and its subset, the economically disadvantaged women-owned small business program.  Ever since the WOSB program formally came into being last year, I’ve been saying that it was only a matter of time before WOSBs and EDWOSBs started protesting one another’s eligibility for WOSB and EDWOSB set-aside procurements.

Now, the SBA Office of Hearings and Appeals has ruled on its first WOSB appeal.  What happened?  Well, for one, all WOSBs should make sure their facsimile machines are in good working order before submitting another bid.

SBA OHA’s decision in Handan Container Services, Inc., SBA No. EDWOSB-101 (2012), involved an Army EDWOSB set-aside under NAICS code 811310, Commercial and Industrial Machinery Equipment (except Automotive and Electronic) Repair and Maintenance.  On March 16, 2012, the Army notified offerors that it had identified Handan Container Services, Inc., as the apparent successful offeror.  A competitor subsequently filed an EDWOSB eligibility protest.

On March 29, 2012, the SBA sent a fax to Handan notifying it of the EDWOSB protest and requesting a response.  The SBA received a confirmation notice that the facsimile had gone through.

Handan did not respond to the SBA’s fax, and on April 12, the SBA issued a decision finding Handan to be ineligible because it had failed to respond to the SBA’s request (the infamous “adverse inference” rule).  The SBA faxed its decision to Handan, which Handan received.

Handan filed an EDWOSB appeal with SBA OHA, stating that it had not received the March 29 fax, and arguing that it was unfair to find it ineligible when it was not aware that an EDWOSB eligibility protest had been filed against it.

SBA OHA denied Handan’s EDWOSB appeal.  SBA OHA found that it was “reasonable to infer” that Handan received the fax.  SBA OHA noted that the confirmation sheet showed that the fax had been received, and stated that Handan’s contention that it was not received “is substantially undermined by its admission that it did receive the April 12 determination, which was also transmitted by fax to the same fax number.”  SBA OHA wrote that ” it would create a heavy burden on the agency if OHA were to rule that SBA may not rely on successful fax confirmation sheets, or that SBA must separately contact the recipients of each fax to verify receipt.”

So there you have it–the first ever WOSB appeal (and a rather harsh result for the WOSB in question, assuming that Handan did not actually receive the fax).

If you’re a WOSB or EDWOSB, get ready, because things are about to get interesting.

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