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.

Teaming Agreements and the Ostensible Subcontractor Rule: SBA OHA Decision Provides Some Guidance

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Teaming agreements for small business set-aside contracts can be tricky.  On the one hand, unlike 8(a) and SDVOSB joint venture agreements, there are no mandatory provisions.  On the other, if a competitor files an SBA size protest challenging the award, the teaming agreement may be “Exhibit A” in the SBA’s evaluation of whether the team violated the ostensible subcontractor rule.  In other words, mess up the teaming agreement, and you could have a big problem on your hands.

The SBA has never published a road map to a perfect teaming agreement, but a recent SBA OHA decision–which found no ostensible subcontractor rule violation–highlights a few provisions that prime contractors and their subcontractors would be wise to consider including.

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SBA OHA: VA Mentor-Protege Program Does Not Protect Participants From Affiliation

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My parents taught me that it’s not polite to say, “I told you so.”  Mom and Dad are big proponents of being polite, and their lessons (by and large) stuck.  For instance, even in this day and age of abbreviated text messages and quick emails written on handheld devices, I always begin and end every business email with a salutation, and end with “regards,” or something along those lines.  Unnecessary?  Perhaps.  But I like to think I am going the extra mile toward being polite.

Today, however, politeness is going to have to take a little hiatus, because I can’t resist saying, “I told you so.”  For more than a year, I have been warning small government contractors that assistance received from a mentor firm under any federal mentor-protege program other than the SBA 8(a) mentor-protege program or DoD mentor-protege program is probably not shielded from the SBA’s affiliation analysis.

Now, the SBA Office of Hearings and Appeals has confirmed that participating in the VA’s mentor-protege program does not offer any protection from affiliation.

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SBA OHA: Inactive Employees Count for SBA Size Purposes

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Back in my undergraduate days at Duke, I attended almost all of the home basketball games.  Occasionally, sometime in the second half, with the Blue Devils up 20 points or more, an opposing player would execute an impressive dunk, and proceed to do a little celebration.  I, along with my fellow Cameron Crazies, would immediately begin chanting, “scoreboard, scoreboard,” while pointing at the device in question.  Our message was, “that’s nice, but it just doesn’t matter.”  (Actually, we Crazies sometimes chanted “just doesn’t matter,” too).

“That’s nice, but it just doesn’t matter” is what the SBA’s Office of Hearings and Appeals had to say in a recent size appeal decision involving the question of whether employees who are sick, on vacation, or even comatose count toward a company’s employee-based SBA size standard.  SBA OHA’s answer: if they’re on the payroll, they count.  Period.

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Three Common SBA Size Protest Mistakes

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Nobody’s perfect, the old saying goes.  While I might beg to differ in the case of my daughter (who, in my unbiased opinion, is perfectly adorable), the saying definitely holds true when it comes to SBA size protests.

I read every published SBA Office of Hearings and Appeals decision (I’m sure you are jealous), and I see many of the same mistakes repeated over and over,  Often, these mistakes cost the protester its chance at a successful size protest.

So, without further ado, here are my top three most common SBA size protest mistakes.

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SBA Size Appeals and Confidential Information

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Clients thinking about filing a SBA size appeal with the SBA Office of Hearings and Appeals are sometimes nervous when they find out that SBA size appeal decisions are publicly published.  “What if the judge publishes our confidential information?” they ask.

As a small business in a competitive market, it is always wise to think about protecting your proprietary and confidential business information, including by having employees and teaming partners sign non-disclosure agreements.  But what do you do when the person with your confidential information is an administrative judge, like the ones at SBA OHA?
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SDVOSBs: Beware of Loans From Minority Owners

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When I was in fifth grade, I had to go door-to-door selling candy bars to raise money for a class field trip.  I worked up the courage to peddle assorted chocolates to most of the neighbors, but avoided houses with those ominous “BEWARE OF DOG” signs.  I was selling snacks; I didn’t want to become a snack myself for some large canine.

For service-disabled veteran-owned small business owners, the SBA Office of Hearings and Appeals has recently hung up its own ominous sign: “BEWARE OF LOANS,” at least when they come from non-service-disabled minority owners.  In SDVOSB Appeal of Rush-Link One Joint Venture, SBA No. VET-228 (2012), the SBA Office of Hearings and Appeals found that loan arrangements between a service-disabled veteran and the company’s minority owners abrogated the service-disabled veteran owner’s control over the company.

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SDVOSB Joint Ventures: JV Agreement Must Name Program Manager

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In Romeo and Juliet, the heroine famously muses “What’s in a name?”  Juliet’s point, as your junior high English teacher probably emphasized, is that the young lovers’ family names should not define them.  If Juliet had her way, names would be meaningless.

Tell that to the SBA’s Office of Hearings and Appeals.  (How’s that for a segue?)  SBA OHA has held that when it comes to service-disabled veteran-owned small business joint ventures, the parties must include the specific name of the SDVOSB employee who will serve as the project manager.  Without a name, the SDVOSB joint venture is invalid.

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