Disappointed Bidders Must Act Quickly to File Size Protests

To say the least, the bid protest timeliness rules can be confusing. To some, these rules appear to be ever-changing, subject to various exceptions, and further complicated where suspension of performance of the new award is desired. Certainly, it is prudent for disappointed bidders to seek legal advice on these issues. Although many businesses wisely choose to seek such counsel, in many cases their delay in doing so in small business procurements results in the relinquishment of an important protest right.

Generally speaking, in most acquisitions, the bid protest regulations require that a disappointed bidder make a prompt written request for a debriefing in order to preserve its bid protest rights. Once this request is made, the offeror is often lulled into inaction until such time as the debriefing occurs, which can be a week or more after the notification of the awardee. By this time, however, although the offeror may still be in a position to file a bid protest challenging the award decision, the deadline for challenging the awardee’s eligibility as a “small business” may have lapsed.

In small business set-aside procurements and other procurements in which offerors must represent themselves as small businesses (e.g., Section 8(a) competitive procurements, HUBZone procurements, Service-Disabled Veteran Owned Small Business Concern procurements), Small Business Administration (“SBA”) regulations and the Federal Acquisition Regulation (“FAR”) provide specific rules for the timeliness of size challenges. To apply to the acquisition at issue, a size protest must be received by the contracting officer by the close of business of the 5th business day after bid opening (in sealed bid acquisitions), or receipt of the “special notification from the contracting officer” that identifies the apparently successful offeror (in negotiated acquisitions). FAR 19.302; 13 C.F.R. 121.1004. The size protest must be sent by hand, telegram, mail, facsimile, Federal Express or other overnight delivery service. A protest may be made orally if it is confirmed in writing either within the 5-day period or by letter postmarked no later than 1 business day after the oral protest. FAR 19.302(d)(1). (Note that slightly different rules apply to multiple award schedule procurements, which are not addressed in this article.)

As noted, the 5-day period in negotiated procurements begins to run from the “special notification from the contracting officer,” which is described in FAR 15.503(a)(2). That regulation refers to the contracting officer’s obligation to notify disappointed bidders in negotiated “small business” acquisitions of the “proposed awardee.” The notification under this regulation is required to include the following information: (i) the name and address of the apparently successful offeror; (ii) that the Government will not consider subsequent revisions of the offeror’s proposal; and (iii) that no response is required unless a basis exists to challenge the small business size status, disadvantaged status, HUBZone status, or service-disabled veteran-owned status of the apparently successful offeror. (Note: The notice is not required when the contracting officer determines in writing that the “urgency of the requirement necessitates award without delay” or when the contract is entered into under the 8(a) program.)

The rationale behind the “proposed awardee” notice is to advise disappointed bidders of their right to challenge the eligibility of the proposed awardee, if a valid basis to do so exists, prior to award of the contract.

In practice, however, problems often arise. First, the notification is not required to include, and frequently does not include, information regarding the timeliness of a size protest. Therefore, disappointed bidders may be unaware of their obligation to act within 5 business days. Additionally, in many instances, procuring agencies fail to issue the “proposed awardee” notification, but rather, proceed to award the contract and notify all other interested parties of the awardee. SBA regulations make clear that where such notification is not provided, “the 5-day protest period will commence upon oral notification by the contracting officer or authorized representative or another means (such as public announcements or other oral communications) of the identity of the apparent successful offeror.” 13 C.F.R. 121.1004(a)(5).

Therefore, in small business set asides and procurements under other small business programs, disappointed bidders should act immediately upon receiving any written or verbal notification (whether naming a proposed awardee or actual awardee), as the size protest clock may well be ticking. Once again, where there is any doubt regarding the timing of a size protest, legal counsel should be sought out at the earliest opportunity.