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Published on December 15, 2022 • Law

Business Was Owned by a Man. Why Did the Company Think It Still Qualified as a Women-Owned Business?

A company was awarded a contract set aside for women-owned small businesses (WOSBs), but the company was not owned by a woman. The company claimed it still qualified as a WOSB because it had been owned by a woman at one point and was still performing another contract that had been set aside for WOSBs. But OHA found that just because a company’s certification as a WOSB for one contract was still valid, the company did not continue to qualify as a WOSB for future contracts.

SonCoast Procurement, LLC, SBA No. WOSB-117

Background

The Defense Logistics Agency awarded a contract to SonCoast Procurement. The contract was set aside for women-owned businesses. Another offeror filed a protest, alleging that SonCoast was owned by a man. The SBA determined that SonCoast was ineligible for award because it was not a women-owned business. SonCoast appealed to the SBA’s Office of Hearings and Appeals.

Analysis

SonCoast did not dispute that it was currently owned by a man. Nevertheless, SonCoast still believed it qualified as a women-owned business. SonCoast had previously been owned by a women, and it was currently performing another contract set aside for women-owned business. SonCoast noted that the SBA website stated that firms certified as WOSBs remain certified for the duration of existing contracts. SonCoast reasoned that because it was still performing an existing contract set aside for WOSBs, it was still a WOSB.

OHA found that SonCoast had misinterpreted the statement on the SBA webpage. The purpose of the statement was to ensure holders of existing WOSB contracts that they would continue perform as a certified business for the duration of the contract. In other words, the statement simply meant that if a WOSB’s status changed while performing a WOSB set aside, they would not lose the contract. This, however, did not mean that a firm that is no longer owned by a woman could continue to be an eligible WOSB for future contracts.

SonCoast is represented by its CEO Todd Hirsch. The government is represented by Kate DePriest of the Small Business Administration.

--Case summary by Craig LaChance, Senior Editor

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