Affiliation is a notorious term in the world of federal procurement, especially when it comes to SBA size determinations and appeals. And affiliation analyses can be even more confusing when it comes to joint ventures. A recent SBA OHA decision, however, answered some common questions regarding joint ventures and affiliation. It also reiterated some of the fundamental standards of a size determination and OHA size determination appeal.
At issue in DSC-EMI II, LLC, SBA No. SIZ-6387, 2026 (June 3, 2026), was a small business set-aside solicitation issued by the Navy for Multi-Function Support Services (MFSS) at the Marine Corps Logistics Base (MCLB) in Albany, Georgia. And it was assigned NAICS code 561210, Facility Support Services, which carries with it a $47 million annual receipts size standard.
On August 22, 2025, the agency notified DSC-EMI II, LLC, the protester and appellant, of its intended award to FL GCR JV, LLC (FL GCR), a joint venture between 51% owner and managing venturer, Frontline Enterprises, LLC (FEL), and 49% owner, Government Contracting Resources, Inc. (GCR). The size protest argued that FL GCR was not a small business under the solicitation’s size standard and thus, was ineligible for award.
Specifically, the protester alleged “the total annual receipts of the joint venture partners and affiliates of FL GCR exceeded the relevant size standard, by virtue of alleged affiliation with twelve (12) other entities.” The alleged affiliation included “shared owners, management, or other means or resources that could allow direct or indirect control among and between the entities and the apparent awardee and its members.” The protester further argued, “data sets found in the Federal Procurement Data System (FPDS) indicate the average annual receipts of FL GCR are likely to exceed the size standard once affiliates are fully identified and annual receipts of those affiliates can be aggregated.”
On November 25, 2025, the SBA Area Office found FL GCR to be a small business under the solicitation’s $47 million size standard. In its response to the size protest, FL GCR acknowledged a few of the alleged affiliations but disputed the others.
During its review of the size protest, the Area Office “found five of the alleged relationships between FL GCR and the twelve listed entities to be completely moot on the basis of inactivity and/or dissolution.” The Area Office also found FEL was the controlling/managing venturer and majority owner of another joint venture, Frontline King George JV, LLC (Frontline King George), which was formed under the SBA’s Mentor Protégé Program. And the Area Office noted, “based on 13 C.F.R. § 125.9 (d)(1), the relationship between FEL and Frontline King George is an exception to the affiliation regulations due to the Mentor Protégé relationship.”
In its size determination, the Area Office explained it had found “no evidence that both members of the JV for [FL GCR] have received awards outside of the two-year period” permitted by the applicable regulations. And it added, “a joint venture is not affiliated with joint ventures of which they are members for size purposes. Accordingly, two entities are not considered affiliated just because they are entered into a joint venture agreement.” The Area Office also explained, “since GCR is the minority member, it is not considered an affiliate[,]” and thus, “GCR’s associated JV partnerships — GCR-MDI, LLC GCR-MDI II, LLC, GCR-DEAN, LLC, and GCR-DEAN II, LLC — are also not affiliates of FEL.”
The Area Office did find “FL GCR affiliated with Service Disabled Veterans Business Association, Inc. (SDVB)” based on common management affiliation. But even then, the Area Office explained, “after reviewing the applicable annual receipts for FEL and GCR, including the receipts of the JV entities, both businesses are small under the $47 million size standard for the assigned NAICS code.” Thus, the Area Office found: “FL GCR met the requirements of both members of the JV being small”; and FL GCR was considered an eligible small business for award under the solicitation.
The protester appealed to SBA’s Office of Hearings and Appeals (OHA). It first argued that the Area Office “failed to engage in a proper analysis of the size status of the two members of [FL GCR].” More specifically, the protester alleged “the Area Office was required to analyze the size of FL GCR members, and to determine whether the members themselves — not just the joint venture as a whole — were affiliated with the other entities listed in the protest.” It said, “the Area Office appears to have looked only to see if the JV itself had affiliates”—but per 13 C.F.R. § 121.103(h)(2)(i), should have examined all affiliated entities to each venturer “to determine if both members were small, as a joint venture is only as small as its largest member.”
Protester’s second allegation of the appeal was that “the Area Office discarded affiliated entities identified by Appellant without a proper basis for doing so.” Therein, the protester contended, “dismissal was improper because it ignored that inactive companies could still have relevant revenue/receipts that must be counted as ‘annual receipts’ for size determination purposes[,]” and “being inactive does mean a concern cannot be affiliated with FL GCR.” On this basis, the protester claimed the Area Office’s affiliation calculation with the inactive concerns instead needed to be calculated.”
To summarize the additional bases of the appeal, the protester further alleged the Area Office: (a) failed to properly investigate all affiliation relationships alleged in the protest (adding that no affiliation argument should have been “tossed out simply due to an incomplete factual record”); and (b) “erred in performing the required size analysis even on the affiliated relationships it did recognize.”
Specifically, FEL’s proportionate share of the annual receipts for Frontline King George, a mentor-protégé joint venture, “needed to be included as part of [FEL’s] overall size to ensure that it was being calculated correctly.” (Id. at 7.)
In its response to the OHA appeal, FL GCR argued that the protester failed to present specific information in regard to the 12 alleged affiliation relationships—merely claiming they “shared owners, management, or other means or resources that could allow direct or indirect control[.]” FL GCR properly noted the protester could not “introduce new arguments or evidence” in the appeal, and the Area Office had “no obligation to investigate issues beyond those raised in the protest.” And FL GCR concluded it was “not required to disprove affiliation with 12 entities that were haphazardly grouped together without explanation in the initial size protest.”
FL GCR also claimed the protester had incorrectly ignored the requirement to demonstrate control. Specifically, FL GCR said, the protester’s “assertion that receipts must be counted even for dissolved or inactive entities lacks both factual and legal support[,]” as it offered “no explanation as to how an inactive or dissolved entity could possibly exert control; rather, it relies on an unsupported successor-in-interest theory (which itself should be barred as an entirely new claim).” And FL GCR raised several additional specific arguments on the basis of the incomplete factual record and lack of legal support.
But as relevant here, FL GCR also argued that the protester had fundamentally misinterpreted the size determination, “specifically in its claims that the Area Office looked only to see if the JV itself had affiliates and the Area Office’s supposed failure to consider FEL’s proportionate share of the annual receipts with Frontline King George.” And FL GCR added references to the size determination where the Area Office stated it was indeed including all acknowledged affiliate and required joint venture proportionate receipts in in calculations—it just found FL GCR small for the solicitation regardless.
Subsequently, the protester filed—and OHA accepted—a supplemental appeal. It argued that the record confirmed the Area Office’s failure “to perform a proper analysis of each entity, particularly GCR and that the record reveals affiliation between GCR and JSA Ventures.” It also said the size determination never mentioned the acknowledged affiliate and “was clearly erroneous for failing to take into account the size of this entity that is admittedly an affiliate of one of the two members of the joint venture at issue [in this matter].” The supplemental appeal also took issue with the Area Office “groundlessly discard[ing] affiliated entities named in the initial protest, despite lacking proper basis to do so.”
FL GCR’s response to the supplemental appeal called it a “fishing expedition,” wherein the protester merely filed “the instant appeal in hopes the Area Office (or FL GCR, in its responses) would do the research and create arguments on its behalf.” FL GCR noted specifically, “GCR’s SBA Form 355, contained in the record, included all required information relating to JSA Ventures, and the Area Office properly considered it in its analysis.” And FL GCR reiterated that the protester’s appeal was based on fundamental misunderstandings of the law—particularly in regard to dissolved and inactive entities and those with “no direct relation to FL GCR.”
Finally, FL GCR argued against the protester’s claim that SDBV’s receipts were not included in the calculations for the size determination. It said the Area Office requested the financial records for SDBV, FL GCR provided them, and the record clearly reflected their inclusion in the calculations. Finally, Appellant’s claim that the Area Office failed to consider SDBV revenue in its analysis is also baseless.
In its analysis, OHA first addressed the protester’s claim that “a joint venture is only as small as its largest member.” OHA said the following:
Per SBA regulation, concerns who create a joint venture “may submit an offer as a small business for a Federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract.” 13 C.F.R. § 121.103(h)(2)(i).
And on that basis, OHA found the protester’s claim that “the Area Office failed to analyze whether each member of FL GCR was small under the NAICS assigned to the instant procurement” to be unpersuasive. Additionally, in response to the appeal allegations that the Area Office didn’t include all required receipts (or proportionate shares thereof), OHA said:
The record shows the Area Office collected and reviewed the financial documents for both FEL and GCR, independently of each other. While the Area Office did not elaborate on the specific breakdown of FEL and GCR’s receipts in the size determination, the Area Office explicitly stated that “[u]pon reviewing the annual receipts for [FEL] and GCR, for the five years prior to bid submission, SBA determined that both businesses that comprise [FL GCR] are, in fact, small under the size standard for the assigned NAICS code.”
Next, OHA addressed the Area Office’s decision “that any joint venture that FEL or GCR were a part of did not count towards an affiliation analysis.” It explained:
While it is established OHA precedent, it is worth noting that a business concern is not an affiliate of a joint venture of which it is a member. Size Appeal of Acacia7 JV, SBA No. SIZ-6331 (2025) (“It is well established that business concerns are not affiliates of joint ventures of which they are members for size purposes.” Citing 87 Fed. Reg. 380, 381 (Jan. 5, 2022)); Size Appeal of Zin Techs., Inc., SBA No. SIZ-6305, at 14 (2024) (“[a] concern is not an affiliate of a joint venture of which it is a member.”). Therefore, the Area Office correctly dismissed any affiliation claim involving FL GCR and the following entities: Frontline King George, GCR-MDI, LLC, GCR-MDI II, LLC, GCR DEAN, LLC, GCR-DEAN II, LLC, and Veteran Resource Group.
Additionally, OHA said, “[n]either the Area Office in its size determination, nor Appellant upon reviewing the record, found that receipts from the joint ventures had not been accounted for as required by 13 C.F.R. § 121.103(h)(4).” OHA also said the Area Office had received JSA Venture’s tax returns, which were consistent with GCR’s SBA Form 355. And as such, OHA further explained:
Despite Appellant’s assertion to the contrary, the record shows the Area Office did in fact receive SDBV’s tax returns and explained that a concern’s average annual receipts is calculated not only by averaging the concern’s receipts, but also for those of its affiliates.
Addressing the appeal’s numerous allegations regarding considerations “missing” from the analysis and calculations, OHA said:
While the size determination could have benefitted from more detailed language regarding the inclusion of SDBV and JSA Ventures, I find no merit in Appellant’s allegations that the Area Office failed to account for affiliates of either FEL or GCR. The size determination’s explanation shortcomings do not rise to an outcome-determinative error. Size Appeal of Melton Sales & Service, Inc., SBA No. SIZ-5893 (2018) (“OHA has consistently held an area office’s error is harmless when rectifying the error would not have changed the result.” Citing Size Appeal of Automation Precision Technology, LLC, SBA No. SIZ-5850, at 17 (2017); Size Appeal of Synergy Solutions, Inc., SBA No. SIZ-5843 (2017).)
OHA also dismissed the appeal argument “that the Area Office erred by not further investigating potential affiliation between the JV partners” and several entities FL GCR had demonstrated “had no relation to FL GCR.” OHA explained:
FL GCR was fully aware the SBA required financial statements and tax returns for the last five completed fiscal years, preceding self-certification, for FL GCR and any affiliates. The record shows FL GCR’s response addressed the relationship between the JV partners and all the concerns Appellant’s protest mentioned, along with others not brought up by Appellant.
OHA added:
Once the Area Office reviewed the responses and accompanying documents, it had no duty to go on an expedition regarding SL Supplies and GCRS. The protest simply mentioned these concerns as those “that could allow” control between them and FL GCR. Beyond that, the protest made no allegations or provided any information regarding the relationship between FL GCR, SL Supplies, and GCRS. As OHA has previously stated, it is settled law that “[a]n area office has no obligation to investigate issues beyond those raised in the protest.”
And it elaborated on this standard, stating:
SBA regulations require an area office to base its decision “primarily on the information supplied by the protestor or the entity requesting the size determination and that provided by the concern whose size status is at issue”, and must “give greater weight to specific, signed, factual evidence than to general, unsupported allegations or opinions”. Accordingly, the Area Office properly relied upon the sworn statements in the SBA Form 355, Federal income tax returns, and other supporting documentation submitted by FL GCR. Appellant has failed to show any valid reason to disturb the size determination.
OHA then concluded:
Here, the Area Office requested information from FL GCR regarding its creation, status, and organizational structure, along with any information regarding the alleged affiliated concerns in Appellant’s protest. The Area Office then received a response, including extensive documentation, regarding the allegations and reasonably found that under 13 C.F.R. § 121.103(h)(2)(i), each concern in the joint venture was small under the applicable NAICS size standard.
So, based on the record of the appeal, OHA refused to “find error in the Area Office’s findings of fact or law[,]” denied the appeal, and affirmed the size determination.
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In regard to filing and appealing a size protest, this OHA denial is a good reminder that the burden of proving size ineligibility falls on the protester—not the SBA. Neither the SBA’s Area Office nor OHA are required to go on their own expeditions to prove a concern is other-than-small. The protest must provide sufficient factual and legal support for all of its grounds. This OHA denial also answered a common affiliation question we see in the federal procurement world by confirming SBA’s stance that a business concern is not automatically considered an affiliate of a joint venture it is party to. And finally, it established an Area Office’s failure to spell out each step of its considerations and calculations in its size determinations alone doesn’t mean the size determination was in error. Instead, OHA looks to what the Area Office requested, received, and considered in its calculations of size.
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