In an about face, the Department of Veterans Affairs has issued an interim final rule amending its status protest procedures for Service-Disabled Veteran-Owned Small Businesses (SDVOSB) and Veteran-Owned Small Businesses (VOSB). Before the VA’s issuance of this interim final rule, the VA had previously published a final rule with requests for comments (74 FR 64619) which provided that VA SDVOSB and VOSB status protests would be considered and decided by the U.S. Small Business Administration.
However, the VA has since reconsidered and has concluded that VA SDVOSB and VOSB status protests should remain with the VA. In reversing its decision, the VA noted that the VA has “developed expertise over the last 2 years in adjudicating SDVOSB and VOSB verifications examinations and status protest…and VA now has the infrastructure and experience to address and resolve future SDVOSB and VOSB status protests.” Moreover, the VA’s unique statutory requirements in contrast to the government-wide SDVOSB program administrated by SBA makes the VA more suited to adjudicate its own status protests. The proposed process is similar to the status protest procedures set forth in the FAR 19.306 associated with status protests under HUBZone and Government-wide SDVOSB set-aside programs.
Under the proposed rules, the VA’s “Center for Veteran Enterprises” shall be renamed the “Center for Verification and Evaluation” (CVE) and the Director of CVE shall initially adjudicate status protests under the VA program. The interim rules would allow either a contracting officer or an interested party to submit a protest regarding the apparent successful offeror’s status and the status protest may only dispute the “Veteran” or “service-disabled Veteran” status of the individual owner(s) of the concern, or ownership and/or control of the concern by a Veteran or service-disabled Veteran. A contracting officer may award the contract to the protested party if the CO determines in writing that “an award must be made to protect the public interest.”
Upon the receipt of a status protest, the CVE Director will have twenty-one (21) business days to render a decision based upon the “totality of the circumstances.” Under that standard, the CVE Director is permitted to consider “facts and issues not specifically raised by the protesting party that the impact SDVOSB/VOSB status and compliance with 38 CFR Part 74 of the protested party.”
A decision by the CVE Director may be appealed to the Executive Director of Office of Small and Disadvantaged Business Utilization (OSDBU) and must be filed no later than five business days after the date of receipt of the status protest decision. The appeal must explicitly “set forth a full and specific statement as to why the decision was based on clear error of fact or law” and the OSDBU Executive Director shall decide the appeal within ten (10) business days of receipt of the appeal and such decision shall be based solely on a review of the evidence in the written protest file, arguments made in the appeal petition, and response(s) filed in the appeal. If the OSDBU Executive Director finds in favor of the appealing party and the appeal is received after the award of the contract, the CO may: (a) terminate the contract; or (b) not exercise the next option.
Status protest decisions by the CVE Director based on “the failure [of the concern] to meet the Veteran or service-disabled Veteran status of the individual owners of the concern” is not appealable to the OSDBU Executive Director and is considered a final decision.