A recent Court of Federal Claims case, Diversified Maintenance Systems, Inc., December 4, 2006, reinforces the necessity for contracting officers to refer all protests regarding a company’s HUBZone status to the Small Business Administration (SBA). In Diversified, the agency set aside a procurement for HUBZone businesses only. All but two of the seven offerors were disqualified for various reasons. The agency awarded a contract to Cadence Contract Services and the other offeror, Diversified, immediately submitted a protest to the contracting officer, challenging the HUBZone status of the awardee.
Diversified’s protest alleged that the awardee’s office in Utah was not located in a certified HUBZone and that Utah’s records did not list a HUBZone company by that name at that address. The contracting officer denied the protest, stating that the awardee’s address in New York was in a HUBZone and that he had verified the HUBZone eligibility of the offeror at the New York address by checking the SBA’s website. Diversified then filed its protest with the Court of Federal Claims. After the litigation began, the government conceded to the Court that the contracting officer had failed to submit the offeror’s protest to the SBA, as required. Consequently, the government requested that the protest be submitted to the SBA.
Because the SBA must, by law, administer the HUBZone program, including a protest of the HUBZone eligibility of a potential contract awardee, the Court directed the agency to refer the disappointed offeror’s protest to the SBA. As the Court stated, the central issue to be decided by the SBA was whether the principal office of the awardee was actually located in a HUBZONE, and whether at least 35% of the awardee’s employees resided in a HUBZone. The Court’s decision emphasized the importance of the role of the SBA in the HUBZone process.