Category Archives: SBA OHA Decisions

Includes decisions of the SBA Office of Hearings and Appeals, including size appeal decisions, service-disabled veteran-owned small business appeal decisions, NAICS code appeal decisions, and women-owned small business appeal decisions.

SDVOSB’s Operating Agreement Caused Affiliation

Posted on by

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.

Continue reading →

After Successful 8(a) Appeal, Company Gains 8(a) Certification

Posted on by

Last month, I wrote about the successful 8(a) program appeal filed by Gearhart Construction Services.  In its decision, SBA OHA held that the SBA had misevaluated Gearhart on the “social disadvantage” factor, including by holding Gearhart to a too-high standard of proof.  SBA OHA ordered the SBA to correct its errors and take another look at Gearhart’s application.

Now I can report that Gearhart’s story has a happy ending.  On April 11, the SBA notified Gearhart that it had been admitted to the 8(a) program.  SBA OHA then dismissed Gearhart’s appeal as moot, because Gearhart and achieved its goal.

Sometimes, gaining admission to the 8(a) program requires tenacity and a continued belief in one’s case, even when the SBA’s 8(a) office has repeatedly denied the application.  Gearhart’s perseverance paid off, and the company now has nine years to reap the rewards.

Economic Dependence and the SBA 8(a) Program

Posted on by

A contractor’s economic dependence on another company can cause affiliation under the SBA affiliation rules, but economic dependence can also be a major problem when a company applies for 8(a) program certification.

As demonstrated in a recent decision of the SBA Office of Hearings and Appeals, if an 8(a) program applicant has received most of its revenues from another company, the SBA may find that the applicant is economically dependent on the other company–and therefore, ineligible for admission to the 8(a) program.

Continue reading →

Groundhog Day is Here: SBA OHA Shoots Down Another 8(a) Program Rejection

Posted on by

In the 1990s comedy Groundhog Day, Bill Murray played a weatherman who found himself living the same day over and over again.  I am having the same feeling reading SBA Office of Hearings and Appeals cases these days (yes, this is what qualifies as my reading material of choice; don’t judge).

As it has at least five other times since December, SBA OHA has shot down the SBA’s rejection of an 8(a) application under the “social disadvantage” factor.  As was the case in several other recent decisions, the latest volley from SBA OHA states that the SBA failed to properly consider the evidence and explain its rationale for denying an 8(a) applicant.

Continue reading →

SBA OHA: Contractor Successfully Fractured Economic Dependence Affiliation

Posted on by

A contractor is not economically dependent upon another firm where it receives only a small proportion of its revenues from the other firm as of the self-certification date for a set-aside contract–even if the contractor previously received more than 70% of its annual revenues from the other firm.

This was the commonsense decision of the SBA Office of Hearings and Appeals in a recent size appeal case, in which SBA OHA held that a contractor’s prior economic dependence on another company does not necessarily mean that the companies are still affiliated under the SBA’s affiliation rules.

Continue reading →

SBA OHA Overturns Another 8(a) Program Denial

Posted on by

The SBA’s Office of Hearings and Appeals has overturned yet another SBA 8(a) Program denial decision–at least the fifth such instance since December 2012.

As with the four previous cases, SBA OHA’s most recent 8(a) appeal decision indicates that the SBA improperly evaluated the applicant’s evidence of social disadvantage, both by misapplying the regulatory test for social disadvantage and by requiring the applicant to meet a higher standard of proof than called for by law.

Continue reading →

After Successful 8(a) Appeal, Veteran-Owned Firm Gains 8(a) Certification

Posted on by

After prevailing in its SBA OHA 8(a) appeal, a St. Louis-based communications and electrical construction contractor has been certified as a participant in the SBA’s 8(a) program.

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.

Continue reading →