The essential elements of the government’s Service-Disabled Veteran-Owned Small Business (SDVOSB) program are ownership and control of the business by a qualifying service-disabled veteran of the U.S. military.
A recent protest challenged a firm’s SDVOSB status on that precise basis – i.e., that a service-disabled vet did not control the day-to-day operations of the company. The Small Business Administration’s Office of Hearings and Appeals (OHA) denied the protest in summary fashion. In doing so, the decision provides a winning playbook for other protested SDVOSB firms.
Specifically, in denying the protest, OHA relied on the awardee’s ability to demonstrate:
· 51% (or more) Ownership by the Service Disabled Vet
· Unconditional Control by the Service Disabled Vet; and
· The Service Disabled Vet’s Management Ability and Experience.
Primarily by relying on the company’s Operating Agreement, the SDVOSB demonstrated that only “member-managers” have the ability to make business decisions, direct the organization, and legally bind the company. The company’s only member-manager is a service-disabled vet. Further, the company relied on evidence of the service-disabled vet’s management experience as evidence of his ability to run the company and make strategic decisions.
Is every SDVOSB status protest going to be this straightforward? No. Allegations will vary and – of course – the protested firm may face unique challenges based on any number of factors unique to its business.
However, regardless of whatever issues come to define the protest – a challenged SDVOSB cannot go wrong in focusing its response on: (1) 51%+ ownership, (2) unconditional control, and (3) proof of the service-disabled vet’s ability to run the business.