Keep Registrations in SAM Current to Avoid Loss of SDVOSB Verification

The decision in Bravo Federal Consulting, LLC, SBA No. CVE-213 (Dec. 1, 2021) is both an important reminder of the importance of keeping all database information up to date and a cautionary tale of the unfortunate consequences that can happen when you don’t. In that decision, SBA’s Office of Hearings and Appeals (OHA) denied an appeal by Bravo Federal Consulting, LLC (Bravo). Bravo submitted a request to change its name, setting off a chain of events that ended in Bravo losing its verified status as a service-disabled veteran-owned small business (SDVOSB). 

On July 1, 2021, Bravo submitted to the Department of Veterans Affairs Center for Verification and Evaluation (CVE) a request to change its name from Pro Gov Solutions, LLC to Bravo Federal Consulting, LLC. Unfortunately, Bravo had not registered in the System for Award Management (SAM) as Bravo Federal Consulting, LLC, so CVE was unable to verify its status as an SDVOSB. All applicants for VIP Verification must be listed in SAM prior to application submission per 38 C.F.R. § 74.2. Additionally, because Bravo had not registered under the name Bravo Federal Consulting, LLC prior to the name change, it had failed to maintain eligibility as required under 38 C.F.R. § 74.15(b) which requires participants to inform CVE of any changes that would affect eligibility within 30 days of the change.  

On August 5, 2021, CVE issued a Notice of Proposed Cancellation (NOPC) to Bravo for failure to maintain its eligibility as an SDVOSB in SAM. CVE has authority to remove any participants from SAM for good cause upon formal notice, under 38 C.F.R. § 74.21(d)(2). Good cause includes failure to maintain eligibility for program participation. Though CVE could confirm Bravo’s owner’s veteran status via the VIP Verification Program, it could not conclude Bravo met the regulatory requirements for inclusion in SAM because Bravo had never registered under the name Bravo Federal Consulting, LLC in SAM.  

With the August 5th NOPC, CVE gave Bravo 30 days to provide evidence and explain why its verified status as an SDVOSB should not be cancelled. Bravo failed to respond to the NOPC, and on September 9, 2021, CVE issued a Notice of Verified Status Cancellation due to CVE being unable to conclude that Bravo satisfied the eligibility requirements. Following the cancellation, on September 13, 2021, Bravo appealed the cancellation to OHA, stating that, although the name change application was not submitted prior to SAM and the IRS being made aware of the name change, both entities were made aware as of September 1, 2021 and Bravo was then “ready to be verified.”  

Ultimately, Bravo did not include a statement of why the cancellation was in error. As such, OHA determined Bravo had failed to comply with the regulation and failed to respond to the NOPC leading to the appeal being denied. OHA concluded that Bravo was not listed in SAM, which is an SDVOSB requirement, and it was proper for CVE to remove Bravo as an SDVOSB. 

In the end, Bravo Federal Consulting, LLC should serve as a cautionary tale for all small businesses involved in federal government contracting. Ensure that your business has the most up to date information in SAM and remain in compliance by reporting any change that may affect eligibility within the required time. While this case involved an SDVOSB, keeping the SAM registration is important for all types of federal contractors.

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