The protester challenged an awardee’s status as an SDVOSB. The protester alleged the awardee was not controlled by a service-disabled veteran because its veteran CEO worked another job as chief brewmaster for a meadery. OHA, however, found that the meadery job didn’t impact the CEO’s control of the company. The CEO worked for the SDVOSB during normal business hours. He only moonlighted at the meadery on nights and weekends.
CVE Protests of Crosstown Courier Service, Inc., RE: Caduceus Medical Logistics LLC, SBA No. CVE-239-P
Background
The Department of Veterans Affairs awarded Caduceus Medical Logistics three contracts for medical courier services. The contracts were set aside for SDVOSBs. Crosstown filed three protests with the contracting officer, alleging that Caduceus was not an eligible SDVOSB. In each protest, Crosstown alleged that Caduceus was not controlled by a service-disable veteran. Crosstown contended that while Caduceus’s CEO was a service-disabled veteran, he lacked experience to run a medical services company. Crosstown further alleged that the CEO was employed as a brewmaster for a meadery and thus was not able to work full time for the awardee. Crosstown also claimed that Caduceus was co-located with another company and was dependent on this other company.
The contracting officer referred the matter to the SBA’s Office of Hearings and Appeals.
Analysis
Operating Agreement
Caduceus’s operating agreement indicated that the veteran CEO owed more than 51% of the company, and that he was vested with complete control with the authority to make all decisions affecting its business.
Prior Experience
Crosstown contended the CEO didn’t really control the company because he lacked experience in the medical courier industry. OHA reasoned that this may be the case, but SBA regulations only require that a service-disabled veteran have management experience needed to run the concern. Here, the CEO had multiple years of management experience.
Full Time Work
The CEO was indeed the brewmaster for a meadery. But OHA found that he still worked for Caduceus during normal business hours and only worked for the meadery on nights and weekends.
Relationship with Other Company
Crosstown alleged Caduceus was co-located and shared management with another company. OHA found that the owner of this other company was a minority owner of Caduceus. Nevertheless, this other company was not an operational business. It had no bank account and no real resources to share with Caduceus. Given that this other company was not an operational, it was unlikely Caduceus would be unduly reliant on the company.
Reasonable Commute
Lastly, Crosstown alleged Caduceus’s CEO did not live within reasonable proximity of the company’s job sites. There is a presumption that a veteran does not control an SDVOSB when they do not live within a reasonable commute of the company’s headquarters.
Here, the CEO may not have lived close to the job sites, but he did reside within reasonable proximity of its headquarters. In fact, the headquarters were in his house. OHA would not presume a lack of control.
Crosstown is represented by Steven A. Neeley and Michael J. Schrier of Husch Blackwell LLP. Caduceus is represented by Julie M. Nichols and James S. Phillips of Roeder, Cocron, Phillips, PLLC.
