The SBA’s decision to certify Innovet, Inc. shows the importance of pursuing an appeal of an unreasonable SBA 8(a) denial–and offers hope that the SBA is learning from its recent string of defeats at SBA OHA.
Innovet is owned and controlled by a service-disabled veteran, Charles McCarty. Innovet applied to the 8(a) program, contending that Mr. McCarty was socially disadvantaged due to his service-connected disabilities.
The SBA rejected Innovet’s initial application and subsequent request for reconsideration, stating that Innovet had not offered “the quality and quantity of evidence necessary” to demonstrate Mr. McCarty’s social disadvantage. Innovet took its case to SBA OHA, which granted Innovet’s appeal.
SBA OHA found that the SBA made “conclusory statements” in evaluating Innovet’s application, failed to consider all of Innovet’s evidence, and cited facts contrary to the evidence in the record. SBA OHA ordered the SBA to take another look at Innovet’s case.
The SBA did so, and this time, it certified Innovet as an 8(a) participant. The SBA’s decision shows the importance of pursuing a SBA OHA appeal of an unreasonable 8(a) denial decision. Had Innovet not appealed, it would still be on the outside of the 8(a) program, looking in.
Innovet’s 8(a) certification is welcome news for Innovet, of course, but it also bodes well for other 8(a) applicants owned by disabled individuals, women and others who are not “presumed” socially disadvantaged under the SBA’s regulations. Although it is only one case, I hope that the decision to certify Innovet means that the SBA is taking its recent series of SBA OHA defeats seriously, and reconsidering how it evaluates social disadvantage. After all, it would be nice if firms like Innovet did not need a judge’s ruling in order to become 8(a) certified.