Recently, SBA’s VetCert Program announced that it had gotten through its backlog, meaning that the system has returned to normal, so to speak. With this in mind, many new service-disabled veteran-owned small businesses (SDVOSBs) no doubt are looking at getting into the SDVOSB program. Indeed, some of you reading this may be the owners of some of those businesses. Considering that we just looked at an SDVOSB appeal regarding the control requirements for an SDVOSB, today, we’re going to go further and provide a general rundown of the SDVOSB Program to update our past post on this topic.
Continue readingTag Archives: SDVOSB control
OHA SDVOSB Appeal: Voting Provisions Scuttle Veteran Control
In a recent decision, SBA’s Office of Hearings and Appeals (OHA) emphasized the importance of a careful reading and complete understanding of the control and ownership requirements for Service-Disabled Veteran Owned Small Businesses (SDVOSBs). This decision provides contractors with an excellent opportunity to brush up on SBA’s control rules regarding qualifying and non-qualifying owners. As the appellant found out in this case, while it may seem to some at first glance that simple majority ownership by the service-disabled veteran is enough to meet SDVOSB requirements, voting provisions matter as well. Failure to keep in mind all aspects of SDVOSB requirements could lead to a denial of SDVOSB status. Let’s take a look at the language of the regulation in question, and how this case illustrates the potential consequences of overlooking a critical item in an otherwise-compliant application for SDVOSB certification.
Continue readingHow Extraordinary! Revised SBA Rule Gives Clear Guidance on Extraordinary Circumstances
Many of the SBA’s small business programs have restrictions on what are commonly referred to as “extraordinary circumstances” or “extraordinary actions.” It’s a topic that we have discussed many times before, including this blog post discussing a case at SBA’s Office of Hearings and Appeals, reviewing extraordinary circumstances in the context of control and operating agreements. SBA often discusses extraordinary circumstances in the context of joint venture control, where the managing venturer must control decisions except for those considered to be extraordinary. But there is a different meaning in the context of an entity seeking certification under an SBA socioeconomic program, where the qualifying individual must have control over all actions and circumstances except for those determined to be extraordinary. This post will focus on the latter situation. And, as any knowledgeable small business federal government contractor can attest to, knowing what actions are and are not extraordinary, is very important to maintain eligibility for the SBA’s programs.
Continue readingOHA: Show me the Management, or Fail SDVOSB Certification
A recent OHA decision reminds us that it’s important to show and tell the SBA how a company seeking certification is meeting the SBA’s requirements for control of a socioeconomic company. Like many of these decisions involving SBA’s programs, it comes out of the Service-Disabled Veteran-Owned Small Business (SDVOSB) VetCert program. That’s because the SDVOSB program allows appeals of denials of certifications. The other programs don’t allow such broad reasons for appeals from certifications (or at least have restrictions on them).
Continue readingGood Timing: SBA Decision on Full-Time Devotion Allows For Two Jobs if No Hours Overlap
There are multiple overlaps in SBA’s socioeconomic rules for the 8(a) Program, Women-Owned Small Business Program (WOSB), and the Service-Disabled Veteran-Owned Small Business (SDVOSB) Program. One in particular has often caused some confusion for our clients: the full-time devotion requirement. This rule generally requires that the service-disabled veteran owner (or equivalent key owner in the other programs) work full time for the company with the SDVOSB status. But what does this mean in practice, especially for start-up companies where the owner may be working a second job. A recent SBA decision sheds some light on the full-time devotion rule.
Continue readingClarity is Key: An Example of Why Clear Language is Important for Showing SDVOSB Control
While SBA has taken over SDVOSB certification from the VA (along with some other rule changes), some things remain the same. One thing which we think will never change, is that making sure the language in your agreements is clear, is vital for the federal contractor (and indeed all businesses). While this is obvious for things like operating agreements and bylaws, documentation like meeting minutes should be clear as well. In a recent appeal of a denial of SDVOSB certification, a company had to go through what must have been a frustrating ordeal that might have been prevented with just a little extra language in the meeting minutes, only to have to deal with further frustration due to a couple of details.
Continue readingSBA Says Goodbye to Reasonable Commute Rule for SDVOSBs
SBA, without much commentary, recently removed the so-called reasonable commute requirement for service-disabled veterans (SDV) who owned or managed service-disabled veteran-owned small businesses (SDVOSB). This rule used to require that veterans live near the principal office or job site, but it sometimes caused issues for SDVOSBs because of how restrictive it could be. Thankfully, SBA has removed this requirement. Since SBA brought little attention to this change, we want to highlight it in this post and say farewell to this SDVOSB requirement.
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