Recent Small Business Administration Ruling Agrees with Protest that Service-Disabled Veteran-Owned Small Business was Not Controlled by Service-Disabled Veteran

June 26, 2020
By Danielle Dietrich
Posted in Business Services, Women and Diverse-Owned Businesses

The Small Business Administration (SBA) Office of Hearings and Appeals (OHA) recently sustained a protester’s challenge to a company’s status as a Service-Disabled Veteran-Owned Small Business (SDVOSB).

Covenant Construction Services was the unsuccessful bidder on a commercial construction contract on a project entirely set aside for SDVOSB.  Covenant protested the SDVODB certification of winning bidder, Concord Construction, Inc., on the basis that the service-disabled veteran owner of Concord did not actually control Concord because he worked full-time for another business (not a SDVOSB).  The 49% owner of Concord (who was not a service-disabled veteran) worked full time for Concord.

In order to be a SDVOSB, the service-disabled veteran must “control” the small business.  Federal regulations provide a rebuttable presumption that “a service-disabled veteran does not control the firm when the service-disabled veteran is not able to work for the firm during the normal working hours that businesses in that industry normally work.”  13 C.F.R. § 125.12(k).

On June 8, 2020, OHA issued its decision, finding that Concord was not a SDVOSB, and that it did not provide evidence to rebut the presumption that the service-disabled veteran did not control the business when he worked full-time for another company.

A copy of the opinion can be found here: https://govt.westlaw.com/sbaoha/Document/I060f18fcb20e11eaacfacd2d37fb36e9?viewType=FullText&listSource=Search&originationContext=Search+Result&transitionType=SearchItem&contextData=(sc.Search)&navigationPath=Search%2fv1%2fresults%2fnavigation%2fi0ad62d3300000172dd82c921fac836d4%3fNav%3dADMINDECISION_PUBLICVIEW%26fragmentIdentifier%3dI060f18fcb20e11eaacfacd2d37fb36e9%26startIndex%3d1%26transitionType%3dSearchItem%26contextData%3d%2528sc.Default%2529%26originationContext%3dSearch%2520Result&list=ADMINDECISION_PUBLICVIEW&rank=2&t_Method=tnc&t_querytext=Small+Business%26+da(last+3+months)

If your company needs advice regarding a Small Business Administration or certification matter, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.