SBA OHA Says Small Business on Notice of Email in Junk Folder: Appeal Untimely
The Small Business Administration’s (“SBA”) Office of Hearing and Appeals (“OHA”) rejected a small business government contractor’s 8(a) participation determination appeal as untimely, notwithstanding the contractor’s claim the termination letter at issue was sent to a junk email folder.
On November 30, 2021, SBA’s Associate Administrator for Business Development sent a letter to LMF Industries, via email, terminating the small business’s participation in the SBA’s 8(a) Business Development (“BD”) Program. On February 11, 2022 – 73 days later – the small business filed a petition with SBA’s OHA appealing the SBA’s November 30, 2021 termination determination. Addressing the late filing, Petitioner’s appeal claimed that its principal only became aware of the termination on February 5, 2022, during an update of the company’s files, because the email was delivered to a junk folder. Petitioner also claimed it never received a hard copy via the United States Postal Service.
An appeal challenging an 8(a) determination must be filed with the SBA OHA within 45 days after receipt of the SBA’s determination. 13 C.F.R. § 134.404. Though an OHA judge may modify any time period or deadline, this discretion does not apply to “[t]he time period governing commencement of a case (i.e., when the appeal petition may be filed)…” 13 C.F.R. § 134.202(d)(2)(i)(A).
In LFM Industries, Inc. D/B/A Massey Industries, Inc., OHA held the appeal was untimely, and thus that OHA lacked jurisdiction over the appeal, because the “fact that the e-mail reached Petitioner’s system, even if it went into a ‘junk’ folder, means Petitioner did in fact receive the termination letter on November 31, 2021…” SBA No. BDPT-601 (Mar. 7, 2021). OHA went on to explain that SBA “cannot be on notice of Petitioner’s internal workings as to what happens when Petitioner receives a communication.” Id. Accordingly, Petitioners appeal was due January 14, 2022, and as a result was untimely.
As we often discuss, small business government contracting can be a lucrative marketplace, but it comes with strict obligations not present in the commercial sector – or even in traditional government contracting for large businesses. Small business government contractors should be mindful when implementing email spam systems, recognizing that the government may send time-sensitive, critical information via email. This case is a good reminder for all government contractors to ensure that “.gov” emails go to an inbox, and not to a junk or spam folder. While small businesses may, in some circumstances, be given leniency by the government, some deadlines are immutable.