On February 2, 2011, the Small Business Administration published revised regulations regarding the effect of an SBA size determination. 76 Fed. Reg. 5680 (Feb. 2, 2011). The most significant of these new rules requires a contracting officer to terminate a contract that is awarded during the pendency of a size protest if the awardee is found to be not small.
While SBA generally requires a size determination to be made within 15 days of submission of the size information, SBA regulations have until now allowed a contracting officer to award a contract to a protested firm if SBA fails to decide the protest within 15 days. The SBA Office of Hearings and Appeals has long held that a contracting officer must terminate a contract awarded to a protested firm while the protest was pending whenever the SBA Area Office concludes that the awardee is not eligible for award. But there was no such requirement in the regulations themselves.
In addition to requiring the termination of a contract awarded to an entity that SBA finds ineligible for award, the revised regulations also require the contracting officer to update the protested firm’s status in the Federal Procurement Data System with the SBA’s final determination regarding a protested firm’s size.
The revisions are effective March 4, 2011 and apply to size determinations concerning small businesses, small disadvantaged businesses, HUBZone contractors, and Service-Disabled Veteran Owned Small Businesses.