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.
The SBA 8(a) mentor-protege affiliation “shield” does not prevent a mentor and protege from being affiliated under the so-called ostensible subcontractor rule, according to a recent decision of the SBA Office of Hearings and Appeals.
In Size Appeal of InGenesis, Inc., SBA No. SIZ-5436 (2013), SBA OHA held that the broad exception from affiliation for 8(a) proteges and their mentors does not prevent the SBA from deeming the companies affiliated under the ostensible subcontractor rule.
A construction company with cash flow problems did not make payments on its SBA loan–and was terminated from the 8(a) program as a result.
The decision of the SBA Office of Hearings and Appeals in C.J. Hearne Construction Co., SBA No. BDP-449 (2012) is an important reminder that unpaid debts to Uncle Sam can be the kiss of death for 8(a) program participation.
A director does not “control” a company under the SBA affiliation rules when that director can be removed at any time by the majority shareholder, according to a recent size appeal decision of the SBA Office of Hearings and Appeals.
In Size Appeal of Environmental Quality Management, Inc., SBA No. SIZ-5429 (2012), SBA OHA arrived at the commonsense conclusion that when a majority shareholder has unfettered discretion to fire a company’s directors, the majority shareholder–not the directors–control the company for purposes of the SBA affiliation rules.
Under the SBA affiliation rules, there is no broad exception from affiliation with a non-profit, according to a recent SBA Office of Hearings and Appeals decision.
In Size Appeal of Asklepion Pharmaceuticals, LLC, SBA No. SIZ-5410 (2012), SBA OHA held that the SBA Area Office properly found a company affiliated with several non-profits, causing the company to be ineligible as a small business.
No matter a company’s actual size, the company will be deemed an ineligible large business if it fails to timely respond to a SBA size protest.
Just ask American Blanching Company, which was recently found ineligible for a small business set-aside contract because it did not respond to a SBA size protest within the short size protest response window.
When it comes to SBA 8(a) termination appeals, failing to follow technical filing requirements can be fatal, as one contractor recently learned the hard way.
In James Kelly Construction Co., SBA No. BDPT-459 (2012), the SBA terminated James Kelly Construction Company from the 8(a) program, alleging that the company’s owner owed outstanding taxes. The company filed a SBA 8(a) termination appeal with the SBA Office of Hearings and Appeals, arguing that the owner did not, in fact, owe taxes.
Unfortunately, the company–which prepared and filed its appeal without a lawyer–failed to include with its appeal a copy of the SBA’s termination determination and the date the determination was received. Because both of these items are required by regulation, SBA OHA dismissed the company’s SBA 8(a) termination appeal, and subsequently denied the company’s request that SBA OHA reconsider its dismissal.
SBA OHA appeals, including 8(a) termination appeals, come with a variety of technical requirements. As the James Kelly Construction Co. case demonstrates, meeting those technical requirements is imperative, or the appeal could be lost before SBA OHA ever reaches the merits of the matter.
In a case that ought to make 8(a) participants sit up and take notice, an 8(a) company was terminated from the 8(a) program for failing to obtain the SBA’s prior approval of its teaming agreement for an 8(a) contract–and the SBA Office of Hearings and Appeals upheld the termination.