In a recent SBA Office of Hearings and Appeals size decision, a service-disabled veteran-owned small business’s operating agreement caused affiliation under the SBA’s affiliation rules, despite the fact that the majority owner was also labeled as the 51% manager.
SBA OHA’s decision in Size Appeal of Washington Patriot Construction, LLC, SBA No. SIZ-5447 (2013) shows the importance of carefully drafting a small business’s corporate operating agreements or bylaws to prevent affiliation with other companies controlled by the small business’s minority owners.
VetBiz verification is only required for VA SDVOSB set-aside solicitations (and FAA SDVOSB set-asides), right? Not in the eyes of one Air Force contracting officer, who apparently inserted a VetBiz verification requirement in a recent SDVOSB set-aside solicitation.
After being excluded from the competition, a contractor challenged the legality of the VetBiz requirement, and asked the SBA to declare it invalid. Unfortunately for the protester, as the SBA Office of Hearings and Appeals held, the SBA lacks authority to rule on such a protest.
As many service-disabled veteran-owned small businesses have discovered, the VA CVE believes that so-called “right of first refusal” provisions prevent veterans from freely selling or transferring their ownership interests. Because such transfer restrictions are commonplace in standard corporate bylaws and operating agreements, countless SDVOSBs have been denied VA CVE verification for including them.
Those days may be over.
In a decision released to the public late last week, the U.S. Court of Federal Claims held that the VA OSDBU had erred by sustaining a SDVOSB eligibility protest on the basis of the company’s right of first refusal provision. That decision, Miles Construction, LLC v. United States, No. 12-597C (2013), also includes other important rulings on the scope of “unconditional” ownership and the VA OSDBU’s evaluation of SDVOSB eligibility protests.
A man who lied about being a service-disabled veteran–and received nearly $6 million in VA SDVOSB set-asides–will not spend a single day in jail.
According to a Department of Justice press release, the man in question, John Witty, was sentenced to a fine, probation, and community service. Yes, Witty’s wallet will be lighter, and maybe there were extenuating circumstances not evident from the press release–but the lack of jail time seems a tad generous.
In an important decision impacting many SDVOSB verification applicants, the U.S. Court of Federal Claims has held that the VA’s SDVOSB regulations did not prevent a service-disabled veteran from controlling his company remotely.
In KWV, Inc. v. United States, No. 12-882C (2013), the Court held that a veteran could control his Rhode Island-based construction company by electronic means, even though the veteran spent half of the year residing in Florida.
Well, that was fast.
A little more than two weeks after the U.S. Court of Federal Claims held that the VA need not consider service-disabled veteran-owned small business set-asides before procuring goods and services using the Federal Supply Schedule, the GAO has ended its long-running dispute with the VA over the same issue.
The GAO’s decision, in a case also involving Kingdomware Technologies, puts a sudden end to a series of GAO cases (known by many as the Aldevra cases) holding that the VA has been acting contrary to the law by failing to consider SDVOSB set-asides before using the Schedule.
The U.S. Department of Veterans Affairs properly limited its SDVOSB market research to firms located in the geographic area where the contract would be performed, according to a recent GAO bid protest decision.
In an era in which many contractors bid on procurements nationally, the GAO’s rationale is debatable–but should serve as a reminder that SDVOSBs cannot take VA set-asides for granted, even when the VA does not use the Federal Supply Schedule.