Legal Meets Practical: Accessible Solutions

A Cautionary Tale for the “Frantically Busy”

We’re all busy. We all multi-task, we all feel buried under emails sometimes, we all work to make sure we don’t drop the ball on something that needs to get done.

That’s why a recent SBA Office of Hearings and Appeals (“OHA”) decision hits so close to home: this could have been us. Take this lesson, and let it scare you enough that you don’t find yourself in the same situation.

When you’re a small business and you win a set-aside contract, a disappointed competitor might file a size protest with the SBA arguing that you aren’t, actually, “small” under the meaning of the SBA’s regulations. If that happens, you have the pleasure of responding to a detailed request for information from your SBA Area Office. If you respond and the SBA Area Office is happy with your response, great. If you respond and it does not make them happy, the SBA Area Office will make a determination that you are “other than small” and take away your award.

The other scenario is if you don’t respond at all. If that happens, the SBA’s general rule is that of “adverse inference” – it will assume that the relevant information would have shown that you are “other than small” (i.e., you lose by default). See Size Appeal of AudioEye, Inc., SBA No. SIZ-5477, at 9-10 (2013); 13 C.F.R. § 121.1008 (d).

In this case, the protestor, Rohmann Services, Inc. (“RSI”) alleged that the awardee, Oxyheal Medical Systems, Inc. (“Oxyheal”) was other than small due to its affiliation with OxyHealth Group, Inc. (“OHGI”). This was based on the facts that: they share a headquarters, they share a parent DUNS number, and they have the same contact person under SAM.gov. Oxyheal Medical Systems, Inc., SBA Size-5707 (2016).

On October 27, 2015, the SBA Area Office notified Oxyheal (via its point of contact listed on SAM.gov) of its investigation into size and requested a response (including documentation) by November 2. On November 3, after receiving no response, the SBA Area Office wrote to the point of contact, advising that the deadline had been missed and that if the corporation did not respond by 3:00 PM that day, the SBA Area Office would presume that Oxyheal was planning not to respond and would apply the adverse inference rule.

Again, Oxyheal did not respond. On November 12, it then received an adverse size determination and attempted to belatedly respond to the information request. By then, however, it was too late, and the SBA refused to consider it or to reverse its determination.

Oxyheal appealed to the SBA OHA, which was unmoved by its argument that the point of contact on SAM.gov was “frantically busy” because she filled three full-time roles due to recent vacancies, and did not have time to read any emails that were not marked “high importance.” Nor did it buy that, when that point of contact failed to respond, the SBA Area Office should have reached out to the alternate points of contact listed on SAM.gov.

The lesson here is clear, but it’s worth repeating: if you win a set-aside contract, keep your eyes peeled for correspondence from the SBA. If it is notice of a size protest and a request for information, failure to respond may strip you of your hard-earned contract.

Not only that, but always, always make sure your information on SAM.gov is current and accurate (especially considering that it does not make you re-enter an email twice when you’re registering, thus permitting mistakes). Open your mail, at least skim your mail – protect yourself! Do not be too busy to keep your award.

The Oxyheal SBA OHA decision may be accessed here.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: http://www.legalmeetspractical.com.

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2 Responses to “A Cautionary Tale for the “Frantically Busy””

  1. Sarah, Thanks for the tip. It is very much appreciated.
    Thanks again
    Alonzo “Jake” Jacobs

  2. Wow, I bet someone is kicking themselves in the arse over this!!!

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