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.

SBA Improperly Evaluated Disabled Individual’s 8(a) Program Application, Says SBA OHA

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The SBA failed to properly evaluate the 8(a) Program application of a small business owned by a disabled individual, according to a recent decision of the SBA Office of Hearings and Appeals.

SBA OHA’s decision in Striker Electric, SBA No. BDPE-465 (2013) comes on the heels of a December 2012 case in which SBA OHA held that the SBA had improperly evaluated the 8(a) Program application of a woman-owned business.  Together, the two decisions may suggest that SBA OHA is holding the SBA to a higher standard than may previously have been the case when it comes to the SBA’s evaluation of the “social disadvantage” factor.  If so, it is good news indeed for 8(a) applicants.

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Ostensible Subcontractor Rule: Lessons Learned From SBA OHA

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Avoiding affiliation under the SBA’s ostensible subcontractor rule can be difficult, especially since the ostensible subcontractor rule itself, 13 C.F.R. § 121.103(h)(4), does not provide many examples of the factors that may cause ostensible subcontractor affiliation.

A recent decision of the SBA Office of Hearings and Appeals, Size Appeal of InGenesis, Inc., SBA No. SIZ-5436 (2013), demonstrates that even when a proposed subcontractor will play a major role in the procurement, ostensible subcontractor affiliation may be avoided if the parties carefully structure their relationship.

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SBA Improperly Denied Woman’s Gender-Based 8(a) Application, Says SBA OHA

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Anyone who works with SBA 8(a) program applications will tell you that it can be very difficult for a woman to demonstrate gender bias to the extent necessary to gain admission to the program.

But for a woman-owned small business business, the road to SBA 8(a) program admission may have just gotten a little easier, as the result of a recent decision by the SBA Office of Hearings and Appeals.  In Strategygen Co., SBA No. BDPE-460 (2012), SBA OHA held that the SBA’s 8(a) admissions office had repeatedly erred in evaluating a woman’s claims of gender bias, and ordered the woman-owned firm admitted to the 8(a) program.

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Ostensible Subcontractor Rule: SBA 8(a) Mentor-Protege “Shield” Does Not Apply

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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.

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Unpaid SBA Loan Leads to 8(a) Program Termination

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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.

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SBA Affiliation Rules: Directors’ Control “Illusory,” Says SBA OHA

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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.

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SBA Affiliation Rules: No Exception For Non-Profits (Usually)

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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.

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