The organizational documents for a business seeking certification under a SBA socio-economic program can play an important part in a company demonstrating its eligibility under the SBA’s requirement for control by the company’s owners, such as a service-disabled veteran or disadvantaged owner. Unlike some of the SBA’s requirements for eligibility, the manner in which a program applicant or participant might run afoul of this requirement are not always obvious. Typical provisions in the organizational documents that, under “non-SBA” circumstances may seem innocuous, may unintentionally undermine the disadvantaged owner’s requirement of showing of unconditional ownership and control.
After the Supreme Court’s unanimous Kingdomware decision affirmed the VA’s statutory obligation to prioritize SDVOSBs in its contracting, the VA authorized the use of so-called “tiered evaluations.” In a typical VA tiered evaluation, various categories of offerors can submit proposals, but SDVOSB proposals are considered first, then VOSB proposals, and so on.
Recently, a non-SDVOSB small business protested the VA’s decision to open discussions with the only SDVOSB offeror to submit a proposal–discussions that allowed the SDVOSB to win the contract. But according to the GAO, the small business couldn’t file a valid protest because the small business wasn’t in the same tier.
Ownership of a Service-Disabled Veteran-Owned Business has to be unconditional. As the owner of an SDVOSB recently found out, unconditional ownership generally means there can be no restrictions on the service-disabled veteran owner’s ability to sell the ownership interest. Let’s explore the details.
Under the VA’s Rule of Two, the VA is required to set aside solicitations for veteran-owned businesses if there is a reasonable expectation of receiving offers from two or more such businesses capable of performing the required work at a fair and reasonable price. But how reasonable does the VA’s expectation have to be in a given procurement?
GAO recently reviewed the reasonableness of VA’s efforts and found them lacking.
The SBA Office of Hearings and Appeals denied an SDVOSB-status protest recently where the protester’s main argument amounted to an allegation that the owner of a competitor failed to identify on social media that he had a service-related disability.
OHA called the allegation “completely without merit.”
GAO recently gave its blessing to a VA decision not to follow the Rule of Two, despite knowing several SDVOSBs would bid. The VA’s decision was based on the contracting officer’s opinion that prices would not be fair and reasonable based on an evaluation of prices and market research.
The decision is important for providing some clarification on what research a contracting officer must undertake to establish that prices will not be fair and reasonable for purposes of the Rule of Two.
The Small Business Administration Office of Hearings and Appeals has denied a protest of the service-disabled veteran-owned small business status of a company seeking to perform work for the U.S. Department of Veterans Affairs.
The decision was not particularly controversial or otherwise notable in and of itself. What is notable is that this was the first VA-status SDVOSB protest decision ever issued by OHA.