The U.S. Court of Federal Claims has jurisdiction to hear challenges to the SBA’s SDVOSB determinations.
In a recent case, the Court held that it had the power to review a decision issued by the SBA Office of Hearings and Appeals, in which OHA deemed a company ineligible to receive a SDVOSB set-side contract.
A large business has agreed to pay $1.1 million to resolve allegations that it created a “front company” to be awarded a SDVOSB set-aside contract–and then served as a “pass through” by performing the work itself.
In addition to the $1.1 million penalty agreed to by the large contractor, the putative SDVOSB has agreed to pay the government $50,000, plus five annual contingency payments equal to one percent of its total annual revenues.
A SDVOSB’s Employee Stock Ownership Plan caused the company to be ineligible under the SBA’s SDVOSB rules because the service-disabled veteran did not own 51% of the ESOP class of stock.
A recent SBA Office of Hearings and Appeals decision should serve as a cautionary tale to any SDVOSB contemplating establishing an ESOP–or any other ownership structure consisting of multiple classes of stock.
SDVOSBs—and basic fairness and common sense—were big winners in a recent decision issued by the U.S. Court of Federal Claims.
In its decision, the Court held that the VA’s Center for Verification and Evaluation violated the law when it disqualified a SDVOSB, without giving the SDVOSB the opportunity to contest the reasons for the disqualification. In an opinion reminiscent of last year’s landmark Miles Construction case, the Court then held that the CVE’s substantive reasons for the disqualification were arbitrary and unreasonable. Continue reading →