The protester challenged the SDVOSB status of the awardee, alleging the company’s qualified veteran had died. The protester argued the awardee did not fall under the surviving spouse rule because the awardee was a sole proprietorship and the surviving spouse could not acquire the deceased veteran’s interest in a sole proprietorship. But OHA found the awardee was not entirely a sole proprietorship and even if it had been, transfer of interest was permissible.
VSBC Protest of Anderson Boneless Beef Holdings, LLC, SBA No. VSBC-409-P
- Protest – The protester challenged the SDVOSB status of the awardee. The awardee’s veteran owner had died. The protester argued the owner’s wife was not an eligible veteran because she was not listed in the VetCert database. Additionally, the deceased veteran had been engaged in numerous outside activities, would have to rely extensively on subcontractors, and thus was ineligible under the ostensible subcontractor rule. The also alleged the wife was not qualified under the surviving spouse rule.
- Denial – OHA denied the protest concluding that the awardee met the burden of establishing it was an eligible SDVOSB.
- VetCert Database: Whether someone is listed in the VetCert database is not a ground for an SDVOSB protest. Regardless, the wife was listed in the database.
- Outside Activities: The protester’s argument that the veteran did not devote his full-time efforts to the concern were beside the point because the veteran had passed away.
- Ostensible Subcontractor Rule: OHA found that the ostensible subcontractor rule did not apply to this case. The contract involved manufactured goods, and the rule does not apply to manufactured goods.
- Surviving Spouse Rule: The surviving spouse rule permits a small business to remain qualified as a small business owned and controlled by service-disabled veteran for some time after a veteran passes away if the spouse acquires the veteran’s ownership interest. The protester claimed the veteran’s wife could not meet the requirements of the surviving spouse rule because she could not acquire the ownership interest since the sole proprietorship expired with him. However, SBA specifically included sole proprietorships among businesses included in the category of “business concerns.” Moreover, OHA noted that the awardee was not strictly a sole proprietorship because the veteran’s ownership interest was put into a family trust.
The protester was represented by Jonathan D. Perrone of Whitcomb, Selinsky, P.C.. Sarah C. Reida of Legal Meets Practical, LLC represented the awardee.
— Case summary by Joshua Lim, Assistant Editor
