OHA Decision Reminds CVE Appellants to Show, Not Tell

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Just like one word answers don’t work with your mom (who you should call this Sunday!), one sentence CVE Appeals don’t usually work for OHA. In one recent case, Secure2ware, Inc., SBA No. CVE-111 (Apr. 18, 2019), OHA provided reminders about what CVE Database appeals must include.

As background, OHA has jurisdiction over both protests of eligibility for inclusion in the VIP database under 13 C.F.R. §§ 134.1001 through 134.1013 (known as “CVE Protests”) and jurisdiction over appeals of denials and cancellations of VIP database inclusion under 13 C.F.R. §§ 134.1101 through 134.1112 (known as “CVE Appeals”). The case discussed here was a CVE Appeal.

In Secure2ware, Inc., CVE notified Secure2ware in February that its recertification for inclusion in the VIP database had been denied because CVE couldn’t verify that a non-veteran didn’t control the company because one of its non-veteran minority owners also received an unspecified fee for use of his electrical contractor license. Thus, it was unclear to CVE whether the service-disabled veteran majority owner was the highest compensated employee of Secure2ware, as generally required by 13 C.F.R § 125.13(i)(2). CVE also took issue with the fact that the minority owner appeared to provide a “critical license” to Secure2ware, as generally not allowed under 13 C.F.R. § 125.13(i)(6).

In response, Secure2ware filed an appeal, simply stating that it did “not agree with the final decision.” OHA denied the appeal for a similarly simple reason: because “[t]he appeal consist[ed] of a single sentence in which Appellant expresse[d] disagreement with the CVE’s determination, yet Appellant failed to provide any further information as to why the CVE determination was in error.”

OHA reminded appellants that all CVE appeals “must contain a ‘statement of why the cancellation or denial is in error’” as required by 13 C.F.R. § 134.1105(a)(2). In other words, an appellant must point out how CVE decided improperly, not just state that it did. OHA further clarified that its “standard of review is whether the [CVE] denial or cancellation was based on clear error of fact or law.” Or, OHA will review whether CVE decided to deny or cancel a business’ inclusion in the VIP database improperly based either on (a) its failure to comply with the regulations or (b) a factual misinterpretation under13 C.F.R. § 134.1111.

Despite the short length of the decision, it serves as an important reminder to potential appellants about CVE Appeals, and, in fact, most filings before any court or administrative decision maker. Appellants must show, not tell. Appeals must demonstrate to OHA how appellants believe the CVE messed up, not just tell OHA that it did, in order to be successful.

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