SBA administers four socioeconomic programs: Service-Disabled Veteran-Owned Small Business (SDVOSB), 8(a) Business Development Program (8(a)) Women-Owned Small Business Program (WOSB) and HUBZone. The SDVOSB, 8(a), and WOSB programs all require that the key owner generally have control over the long-term decision-making and the day-to-day operations of a company. These same rules apply to the veteran-owned small businesses program (VOSB) as well. A recent decision from the Office of Hearings and Appeals at SBA reveals that the operating agreement or bylaws for these types of companies must be very clear about how they are operated.
Continue readingTag Archives: SBA OHA decisions
OHA: A Manufacturer Must Own or Lease Facilities to Qualify
In a recent decision, the Small Business Administration’s Office of Hearings and Appeals (OHA) reviewed the requirements to establish that a company is a manufacturer of a product under SBA’s rules. In particular, there is a requirement that a company use “its own facilities” in manufacturing the product. But how does a company establish it will use its own facilities?
Continue readingGAO Sustains Protest to Best Value Trade Off Where Agency Only Considers “Outstanding” Proposals, Without Weighing Price/Non-Price Factors
The federal government contracting solicitation, proposal, and selection processes are something that all federal government contractors should strive to know. These methods, found in FAR parts 14 and 15, respectively, can be boiled down to two methods: sealed bidding and contracting by negotiation. Contracting by negotiation can occur either through a competitive award or a sole source award. When used effectively, the parts of the FAR clue contractors into the methods that agencies use to evaluate proposals and can help contractors tailor their proposals to better target agencies’ needs, thereby increasing chances of award. Of particular importance is the method an agency will use to evaluate proposals, and the weight given to technical components of the proposal against the weight given to price. In KPMG LLP, B-420949 (Nov. 7, 2022), GAO takes a look at how agencies evaluate technical proposals and price, and how those evaluations work together in a best-value tradeoff decision.
Continue readingOpen to Interpretation? Don’t Guess if Your Joint Venture Agreement Plays by the Rules
A recent SBA decision showcased the strict manner in which SBA interprets its joint venture agreement rules. After an agency awarded a contract to a joint venture entity, SBA determined the joint venture was ineligible due to fairly small deficiencies in a joint venture agreement. It’s a situation that no federal contractor wants to encounter. SBA requires strict adherence to the requirements that must be contained in nearly all joint venture agreements. Unfortunately, one company learned this lesson the hard way.
Continue readingFranchise Agreement Terms Sink Company’s SDVOSB Application
It’s a refrain that my colleagues and I have often heard: if you’re a franchisee, it can be really, really hard–perhaps almost impossible–to be verified as a service-disabled veteran-owned small business.
A recent case demonstrates the difficulties in obtaining SDVOSB status as a franchisee. In the case, the SBA’s Office of Hearings and Appeals held that the Center for Verification and Eligibility had correctly denied a company’s SDVOSB application because, in the eyes of the CVE and SBA, the terms of the franchise agreement impeded the veteran’s control of the company.
Continue readingSBA’s SDVOSB “Normal Business Hours” Rule Needs Fixing–Here’s How
SBA’s regulations for service-disabled veteran-owned small businesses create a rebuttable presumption that a service-disabled veteran doesn’t control the company if the veteran is unable to work normal business hours in the company’s industry.
The rule sounds reasonable at first blush, but as a recent SBA Office of Hearings and Appeals case demonstrates, the SBA may apply the presumption even to a one-person start-up with no contracts. Not many people can afford to quit their day jobs before their businesses truly get off the ground–creating a real conundrum for SDVOSB start-ups.
For the sake of fairness, the SBA’s Normal Business Hours rule needs fixing, pronto. Here’s how to do it.
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