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The appellant challenged SBA’s determination that it was not an eligible HUBZone business. SBA determined certain of the business’s employees were listed on the appellant’s payroll but were only employees for the purpose of maintaining HUBZone status. OHA affirmed this determination and denied the appeal.
HUBZone Appeal of CS Government Solutions, LLC, SBA No. HUB-105
- Background – SBA found the appellant was not an eligible HUBZone small business concern. The appellant appealed the determination arguing it was clearly erroneous. The appellant was a joint venture between Sirius Federal, LLC (Sirius) and Cynergy Professional Systems, LLC (Cynergy).
- Certain Individuals – The issue was whether SBA’s determination that certain individuals could not count as employees of Cynergy was a clear error of fact or law. SBA’s Suspension and Debarment Official noted that these certain individuals appeared on the payroll for numerous other businesses seeking to obtain or maintain HUBZone certification. They appeared to be included in Cynergy’s payroll only to maintain HUBZone certification and were not legitimate Cynergy employees. If these individuals were not Cynergy employees, Cynergy would not have the requisite 35% of its employees necessary to be a qualified HUBZone concern under the subject procurement.
- Decision – 13 C.F.R. § 126.103 provides that SBA will not merely review payroll records and leave it at that. The agency will review the the totality of the circumstances, meaning all aspects of the relationship. Here, other than the payroll records, there was merely one sheet of contacts with Contracting Officers. Among other things, the individuals did not work for forty hours in four weeks preceding the date of review. Thus, OHA denied the appeal and affirmed SBA’s determination.
Matthew T. Schoonover, John M. Mattox II, Ian P. Patterson, and Timothy J. Laughlin of Schoonover & Moriarty, LLC, appeared for Appellant CS Government Solutions, LLC.
Shane J. McCall, Nicole D. Pottroff, John L. Holtz, Gregory P. Weber, Stephanie L. Ellis and Annie E. Birney of Koprince, McCall, Pottroff, LLC appeared for BahFed Corporation. Allison Mueller Amann appeared for SBA.
— Case summary by Joshua Lim, Assistant Editor.
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