Tag Archives: SBA size appeals

SBA Affiliation Rules: “Inter-Affiliate Transactions” Exception Is Narrow

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Under the SBA’s affiliation rules, the so-called “inter-affiliate transactions” exception applies only where the companies in question would be eligible to file a consolidated tax return.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the inter-affiliate transactions exception does not apply when affiliated companies are ineligible to file a consolidated tax return–a result that seems to authorize “double counting” of affiliated companies’ revenues in the context of SBA size determinations.

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SBA OHA: Providing Specifications & Funding Is Not “Manufacturing”

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A business was not engaged in “manufacturing” within the meaning of the SBA’s regulations where the firm provided another entity with specifications and financing, and the second entity produced the end item being acquired by the government.

As demonstrated in a recent SBA Office of Hearings and Appeals decision, being a “manufacturer” means engaging in the primary activities of transforming substances into an end item.  Merely providing specifications and financing doesn’t do the trick.

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SBIR Program: SBA OHA Explains The Ownership Requirements

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A firm will not qualify as a small business for a Small Business Innovation Research (SBIR) grant if it does not meet the SBIR program’s regulatory ownership and control requirements–and those requirements can be confusing.

In a recent size appeal decision, the SBA Office of Hearings and Appeals explained how the SBIR program’s ownership and control requirements work in practice.

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SBA 8(a) JVs: No OHA Appeals Of Disapprovals

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The SBA’s Office of Hearings and Appeals does not have jurisdiction to hear an appeal challenging the SBA’s refusal to approve a joint venture for an 8(a) set-aside contract.

In a recent decision, OHA dismissed an appeal filed by an 8(a) mentor-protege joint venture, in which the joint venture attempted to challenge the SBA’s decision not to approve the joint venture to pursue an 8(a) set-aside.

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Size Protests: Only SBA Can Grant Extension To Response Deadline

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Only the SBA has the power to grant an extension to the short time deadline for a company to respond to a SBA size protest.

As demonstrated in a recent SBA Office of Hearings and Appeals decision, although the SBA’s practice is to require the procuring agency to grant a concurrent extension, the procuring agency’s agreement alone–in the absence of a corresponding SBA extension–will not permit a protested company to file a late response.

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SBA Affiliation Rules: President Controlled Company Despite Removal Provision

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A company’s President was deemed to control the company for purposes of the SBA affiliation rules, even though the company’s majority shareholder had the unilateral right to remove the President from office at any time.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that a company’s President exercised “critical influence” over the company, and that the President’s influence was not rendered illusory simply because the 100% owner could remove the President from office.

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Forming Eight JVs Did Not Create Affiliation Between JV Members

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An 8(a) protege and its mentor were not affiliated with one another, despite forming eight joint ventures over a four-year period–and winning 15 contracts with those joint ventures.

In a recent size appeal case, the SBA Office of Hearings and Appeals upheld the decision of the SBA Area Office, which found that the mentor and protege were not affiliated despite their substantial history of joint venturing.

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