Tag Archives: SDVOSB eligibility

SDVOSB’s Operating Agreement Caused Affiliation

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In a recent SBA Office of Hearings and Appeals size decision, a service-disabled veteran-owned small business’s operating agreement caused affiliation under the SBA’s affiliation rules, despite the fact that the majority owner was also labeled as the 51% manager.

SBA OHA’s decision in Size Appeal of Washington Patriot Construction, LLC, SBA No. SIZ-5447 (2013) shows the importance of carefully drafting a small business’s corporate operating agreements or bylaws to prevent affiliation with other companies controlled by the small business’s minority owners.

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SDVOSB Fraud: DOJ Alleges Non-SDVs Received $13 Million

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Two brothers fraudulently misrepresented themselves to be service-disabled veterans and received $13 million in VA SDVOSB set-aside awards, according to a U.S. Department of Justice press release.

The brothers, Raymond Testa and Gerald Testa, both of New York, were recently arrested and charged with major wire fraud.  If convicted, they face penalties of up to 10 years in prison and/or a fine of up to $1 million.

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VA CVE: SDVOSB Reconsiderations Taking 128 Days

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Did your company file a request for reconsideration of a VA CVE SDVOSB verification denial?  If so, be prepared to wait awhile–approximately 128 days, according to a recent VA CVE email.

The email, which was sent to a number of SDVOSBs and VOSBs (and kindly shared with me) indicates that the VA CVE is currently processing approximately 300 requests for reconsideration.  As a result, the VA CVE says, the time frame to process a request for reconsideration is now more than double the regulatory goal of 60 days.

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VA CVE Announces “Pre-Determination Findings” To Improve SDVOSB Verification

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The VA Center for Veterans Enterprise will soon begin giving some applicants the opportunity to correct problems with their SDVOSB verification applications before denying their applications.

In a letter sent yesterday to a number of SDVOSB advocates, VA OSDBU Executive Director Thomas Leney announced that the VA CVE’s new “pre-determination findings” program will launch on May 1, 2013.  If the new program works as intended, it could significantly reduce the number of SDVOSBs requesting reconsideration, lead to quicker verifications, and reduce the backlog of verification applications.

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SDVOSB Eligibility Not Affected By Ownership Transfer Restriction, Says Federal Court

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As many service-disabled veteran-owned small businesses have discovered, the VA CVE believes that so-called “right of first refusal” provisions prevent veterans from freely selling or transferring their ownership interests.  Because such transfer restrictions are commonplace in standard corporate bylaws and operating agreements, countless SDVOSBs have been denied VA CVE verification for including them.

Those days may be over.

In a decision released to the public late last week, the U.S. Court of Federal Claims held that the VA OSDBU had erred by sustaining a SDVOSB eligibility protest on the basis of the company’s right of first refusal provision.  That decision, Miles Construction, LLC v. United States, No. 12-597C (2013), also includes other important rulings on the scope of “unconditional” ownership and the VA OSDBU’s evaluation of SDVOSB eligibility protests.

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A Slap On The Wrist? Contractor Avoids Jail Time For SDVOSB Fraud

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A man who lied about being a service-disabled veteran–and received nearly $6 million in VA SDVOSB set-asides–will not spend a single day in jail.

According to a Department of Justice press release, the man in question, John Witty, was sentenced to a fine, probation, and community service.  Yes, Witty’s wallet will be lighter, and maybe there were extenuating circumstances not evident from the press release–but the lack of jail time seems a tad generous.

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VA CVE Verification: Federal Court Rules Veteran Can “Control” SDVOSB Remotely

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In an important decision impacting many SDVOSB verification applicants, the U.S. Court of Federal Claims has held that the VA’s SDVOSB regulations did not prevent a service-disabled veteran from controlling his company remotely.

In KWV, Inc. v. United States, No. 12-882C (2013), the Court held that a veteran could control his Rhode Island-based construction company by electronic means, even though the veteran spent half of the year residing in Florida.

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