Category Archives: Service-Disabled Veteran-Owned Small Businesses

OHA: Contractor Learns from Earlier OHA Decision to Show Me the Money on Ostensible Subcontracting Issue

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Compliance with the ostensible subcontractor rule is essential for companies seeking small business and socioeconomic set-asides. Yet many contractors learn the hard way that there is a difference between simply claiming compliance and proving it.

Earlier this year, we blogged on an SBA Office of Hearings and Appeals (OHA) decision (here) that examined whether a subcontractor was an ostensible subcontractor or not. Ultimately, the awardee failed to sufficiently demonstrate that its subcontractor was not performing the primary and vital parts of the contract.  

In a recent OHA decision, the same parties went head-to-head again for round two, on a different procurement with a different proposal. But this time, one party brought the receipts. In reviewing the proposal, SBA found that the prime contractor had properly outlined its tasks and work in alignment with the solicitation and showed its compliance with the limitations on subcontracting. These two cases work in tandem to help show federal contractors how to demonstrate compliance with the ostensible subcontractor rule.

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SBA’s SDVOSB Warning: Spell Out Veteran Control in Business Documents and Minutes

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It is quite common for businesses in the private sector to share control and duties among many executives or individuals. However, as many who have looked into SBA socioeconomic certifications have found out, to gain certification in a set-aside program, basically all control needs to reside with one individual. Recently, the SBA’s Office of Hearings and Appeals (OHA) reviewed a SDVOSB recertification denial, and provided a reminder to contractors interested in the SDVOSB and VOSB program that the veteran must be the sole individual in control.

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OHA Says: Show me the Money! (in Ostensible Subcontracting Review)

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Size and status protests, which are reviewed by the SBA’s Office of Hearings and Appeals (OHA), are far less common than GAO protests which protest an evaluation aspect of a solicitation or award. But when they are used they can be a powerful tool to keep contracting dollars intended for small businesses to stay with small businesses. In the case of Winergy, LLC, OHA takes a look at an award intended for SDVOSBs, to determine if the awardee is in compliance with the ostensible subcontractor rule or if it is subcontracting out the primary and vital parts of the contract. The lesson? If you want to keep an award, be sure that you, or a similarly situated subcontractor, will be performing the primary and vital parts of the contract and that you can support that assertion with evidence.

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Fully Devoted or Just Rebuttable? Qualifying Veterans Overcome Full-Time Devotion Rule

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It doesn’t take too long to find a blog post where we’ve discussed SBA’s Service-Disabled Veteran-Owned Small Business (SDVOSB) full-time devotion requirement. For a service-disabled veteran (SDV) to meet the SDVOSB control requirements, the SDV must control “the management and daily business operations” of the SDVOSB. This requires the SDV to be fully devoted to the SDVOSB. As a quick refresher on the full-time devotion requirement, a qualifying veteran “may not engage in outside employment that prevents [them] from devoting the time and attention to the concern necessary to control its management and daily business operations.” Further, the veteran must be able to “devote full-time during the business’s normal hours of operation” or SBA will assume lack of control. 13 C.F.R. 128.203(i). The same rule applies for the WOSB and 8(a) programs. In past decisions, SBA was OK with a veteran juggling multiple jobs as long as the hours didn’t overlap. But a recent decision shows that it may be possible to overcome this assumption.

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OHA: SBA VetCert Review of Bylaws Was too Strict

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We have previously blogged on SBA OHA decisions where an applicant was denied certification in one of SBA’s socioeconomic programs because the applicant failed to meet SBA’s control requirements. (You can check out some recent posts here and here). These decisions served as friendly reminders that before submitting an application, future applicants should take a closer look at its governing documents for potential concerns SBA may raise in its review.  

A recent OHA decision, however, suggests that SBA’s strict interpretation of an applicant’s governing documents isn’t always the correct interpretation.

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Veterans Day: Thank You for Your Service

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Today, at SmallGovCon, we would like to take this opportunity to honor all the veterans and active-duty military for their service.

The first celebration using the term Veterans Day occurred in Birmingham, Alabama, in 1947. Raymond Weeks, a World War II veteran, organized “National Veterans Day,” which included a parade and other festivities, to honor all veterans. The event was held on November 11, then designated Armistice Day.

Armistice Day, commemorating the end of World War I in 1918, when major hostilities officially ceased on the eleventh hour of the eleventh day of the eleventh month. Later, U.S. Representative Edward Rees, from our home state of Kansas, proposed a bill that would change Armistice Day to Veterans Day.

Today, Veterans Day is a time to reflect on the contributions of millions of men and women who have defended their country, often enduring incredible hardship and separation from their families. It’s a moment for communities nationwide to show gratitude and respect, whether through parades, ceremonies, or personal acts of kindness toward veterans.

Thank you for your service, Veterans!

SBA OHA: Operating Agreements Must Clearly Demonstrate Control

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A recent appeal before the U.S. Small Business Administration’s Office of Hearings and Appeals (OHA) upheld SBA’s denial of an application for a veteran-owned small business because its operating agreement gave too much control to a non-veteran owner and failed to identify a veteran as the highest officer. The decision in Facekay LLC demonstrates the importance of strict adherence to the control requirements laid out by the various SBA programs.

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