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 regulations governing the SBA’s service-disabled veteran-owned small business program are clear: to qualify as an SDVOSB, a business must ensure that a service-disabled veteran serves as its highest officer.
The SBA will examine a SDVOSB’s bylaws to see whether the provision is met. If not, belatedly amending the bylaws won’t save the business’s eligibility for a contract it bid upon before the amendment, as demonstrated by a SDVOSB appeal decision of the SBA Office of Hearings and Appeals.
When a small government contractor gets its hand caught in the “affiliation” cookie jar, the natural reaction is to scramble to fix the problem, even if it means contradicting the contractor’s own proposal. But don’t expect post hoc efforts at fixing a problem with the SBA affiliation rules to pan out. The SBA’s Office of Hearings and Appeals has held that where a contractor’s after-the-fact statements regarding affiliation contradict its proposal, the language of the proposal governs.
An SBA size protest on a negotiated procurement must be submitted within five business days “after the contracting officer has notified the protester of the identity of the prospective awardee.” But what happens if the contracting officer’s notice arrives after normal working hours? Does the clock start ticking anyway?
The SBA affiliation regulation, 13 C.F.R. § 121.103, states that all affiliation is premised on the notion of control. In other words, two companies are affiliated when the same person or entity controls or has the power to control both.
The size appeal decision of the SBA’s Office of Hearings and Appeals in Size Appeal of Manroy, USA, LLC, SBA No. SIZ-5244 (2011), explains that when there is no overlapping control, there is no affiliation, even if one or more of the indicia of affiliation described in the regulation might arguably be present.
A small government contractor needs to keep a close eye on its relationships with large businesses, as almost any type of interaction between the companies, such as contracts, bonding assistance, and overlaps in employees or officers may be considered evidence of SBA affiliation in a size appeal. But, at least in one opinion issued by the SBA’s Office of Hearings and Appeals, the capital contributions of a large business member were irrelevant to an affiliation analysis.
Is a small business affiliated with its joint venture partner? Forgive the stereotypical lawyerly response, but the answer is “yes and no.” A small business is affiliated with its joint venture partner on a procurement-specific basis, but typically is not affiliated with its joint venture partner on an ongoing basis. The SBA’s Office of Hearings and Appeals succinctly explained the basic rules relating to joint ventures and affiliation in Size Appeal of Innovative Resources, SBA No. SIZ-5238 (2011).
If someone asked me to play a word association game with the phrase “quorum provision,” one of my first responses might be “boring.” After all, who really cares about some arcane paragraph tucked away in a company’s governing documents, describing how many people must attend company meetings?
Well, SDVOSBs should care. If your small business is pursuing service-disabled veteran-owned small business set-aside opportunities, you better make sure your governing documents are airtight. As demonstrated in one recent SBA Office of Hearings and Appeals decision, even something as mundane and boring as a quorum provision can defeat SDVOSB status, if the provision does not allow service-disabled veterans to unconditionally control the company.