An unsuccessful offeror challenged the size of a putative small business. The SBA Area Office denied the protest. The protester appealed. OHA reversed. The Area Office had not analyzed affiliation under the SBA's multiple-minority shareholder rule.
Size Appeal of S3-RQ JV, SBA No. SIZ-6297
- Size Protest - The protester argued the awardee was not small due to affiliations with other businesses. The awardee acknowledged eight affiliates but denied three. The SBA Area Office sided with the awardee. The protester appealed.
- OHA Reverses - OHA found the Area Office had not fully explored the awardee's affiliations under SBA's multiple-minority shareholder rule. To wit: when two or more shareholders hold approximately equal minority interests that combined would be larger than any other stock holding, each minority owner is presumed to control the concern based on their minority interest. The SBA Area Office had to determine whether some of the awardee's minority shareholders controlled the awardee. OHA also determined the Area Office erred when it improperly merged two separate affiliates in its analysis.
-- Case summary by Joshua Lim, Assistant Editor