PMO Manager Wasn’t “Key Employee” Under SBA Affiliation Regulations

A Program Management Office manager was not a “key employee” within the definition of the SBA’s affiliation regulations, according to the SBA Office of Hearings and Appeals.

In a recent size appeal decision, OHA found that the fact that a small business’s CEO served as another company’s PMO manager did not result in affiliation between the two companies because the individual in question could not control the second company through his PMO manager role.

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Businesses Controlled By Brothers Were Presumed Affiliated, Says SBA

Businesses controlled by brothers were presumed affiliated under the SBA’s affiliation rules.

In a recent size determination, the SBA Office of Hearings and Appeals held that a contractor was affiliated with companies controlled by its largest owners’ brother, even though the companies had only minimal business dealings.  OHA’s decision highlights the “familial relationships” affiliation rule, which can often trip up even sophisticated contractors–but the decision, which was based on a March 2016 size determination request, did not take into account changes to that regulation that went into effect a few months later.

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Common Investments Affiliation: Shared Real Estate Can Count

So-called “common investments” affiliation under the SBA’s affiliation rules arises most frequently when individuals own common interests in at least two operating companies.  But common investments affiliation can also be based on common interests in real estate.

In a recent decision, the SBA Office of Hearings and Appeals held that the SBA had performed an inadequate size determination because the SBA Area Office asked the protested company about common investments in companies–but didn’t directly ask about common investments in real estate.

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SBA: Interaffiliate Transactions Exception Will Be Broadly Applied

The SBA will broadly apply the so-called “interaffiliate transactions” exception under the SBA’s size rules, essentially overturning an SBA Office of Hearings and Appeals decision issued last year, in which OHA interpreted the exception very narrowly.

In a Policy Statement issued May 24, 2016, the SBA states that it will broadly apply the interaffiliate transactions exception “regardless of the type of relationship that resulted in the finding of affiliation.”

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Ostensible Subcontractor Affiliation: Beware These “Four Key Factors,” Says SBA OHA

Ostensible subcontractor affiliation can arise for many reasons–but a small business may be in grave danger of affiliation with its subcontractor when four specific factors are present.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that a small prime contractor was unusually reliant on its large subcontractor where “four key factors” indicated that the small prime contractor was bringing little to the table but its small business status.

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Busy Employee “Skims” SBA Size Protest Email–What Could Go Wrong?

A contractor’s “frantically busy” employee, who was listed as the firm’s contact in SAM, skimmed through an email from the SBA containing a size protest, and took no action to respond.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the SBA had properly issued an adverse size determination against the contractor in question after receiving no reply to the size protest–and the fact that the employee who received it was “frantically busy” was no excuse.

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SBA Size Determination “Not Relevant” To Subcontracting Limitation Allegation

A SBA size determination, in which the SBA found a contractor to be an eligible small business for purposes of a particular procurement, was irrelevant to the question of whether the same contractor would violate the limitation on subcontracting under a different solicitation.

In a recent bid protest decision, the GAO (correctly) rejected the procuring agency’s argument that a recent SBA size determination was evidence that a contractor would comply with the subcontracting limitation.

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