Size Protests: Only SBA Can Grant Extension To Response Deadline

Only the SBA has the power to grant an extension to the short time deadline for a company to respond to a SBA size protest.

As demonstrated in a recent SBA Office of Hearings and Appeals decision, although the SBA’s practice is to require the procuring agency to grant a concurrent extension, the procuring agency’s agreement alone–in the absence of a corresponding SBA extension–will not permit a protested company to file a late response.

SBA OHA’s decision in Size Appeal of Axxon International, LLC, SBA No. SIZ-5602 (2014) involved an Army small business set-aside RFQ for the acquisition of fiber drums.  After evaluating quotations, the Army announced that Axxon International, LLC was the awardee.

A competitor filed a SBA size protest, challenging Axxon’s small business status and compliance with the non-manufacturer rule.  On July 17, 2014, the SBA notified Axxon of the size protest.  As is typical in size protest cases, the SBA’s notification letter requested that Axxon respond within three working days.  Accounting for weekends, Axxon’s initial response deadline was July 23.  The SBA warned Axxon that if it failed to timely respond, the SBA could deem Axxon to be “other than a small business.”

By July 29, the SBA had not received any response from Axxon.  Rather than simply declare Axxon to be a large business, the SBA size specialist contacted Axxon by telephone.  Axxon informed the SBA size specialist that it had sent a response package by U.S. mail.  The SBA size specialist subsequently contacted the Army and asked for an extension in the deadline of the completion of the size determination.  The Army’s contracting specialist stated that she could not authorize an extension without consulting with the Contracting Officer.

On July 30, the SBA received Axxon’s response package.  Upon review, however, the package was incomplete, because it was missing the SBA Form 355 and other information.  The SBA size specialist again contacted Axxon, and instructed Axxon to submit a revised response package by the following day, July 31.

Axxon apparently contacted the Army regarding a potential extension.  On August 1, the Army sent an email to Axxon stating that the Army would grant an extension for the SBA size specialist to prepare the size determination.  However, the SBA did not grant Axxon any extensions from the July 31 deadline.

Axxon did not transmit any additional documents until August 4.  On that date, Axxon sent the SBA size specialist an email with a portion of its revised response, and stated that the remainder of the revised response would be delivered the following day.  The SBA size specialist responded by stating that the new information would not be considered because it was not provided by July 31.  The following day, the SBA issued a size determination finding Axxon to be ineligible for the Army procurement.

Axxon filed a size appeal with the SBA Office of Hearings and Appeals.  Axxon argued, in part, that its failure to meet the July 31 deadline should be excused because the Army agreed to extend the deadline.

OHA wrote that Axxon’s argument “reflects a misunderstanding of the size protest process.”  Under the SBA’s regulations, a procuring agency may proceed with a contract award if a size determination is not issued within 15 business days of a size protest unless the SBA requests an extension and that extension is granted.  “By contrast, the deadline for a challenged firm to submit information to SBA is determined by SBA, not the procuring agency.”  Thus, “whether or not the procuring agency extends the timeframe for issuing the size determination does not alter the challenged firm’s deadline to submit information to OHA.”  OHA denied Axxon’s size appeal.

When a protested company learns that it has a mere three business days to respond to a size protest, the protested company often wishes to seek an extension of that deadline.  To make matters more confusing, the SBA’s internal practice is to make any extension contingent on the contracting officer’s willingness to grant a concurrent extension of the SBA’s size determination deadline.  (Otherwise, any extension the SBA grants would reduce the SBA’s own time to prepare its size determination).  As the Axxon International size appeal demonstrates, the contracting officer’s extension only applies to the SBA’s deadline to prepare its size determination.  Only the SBA has the power to grant the protested company an extension of its own response deadline.

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