“Educating the Government Contracting Community”

COFC Holds Residency is Not Sole Determining Factor in Determining Ownership & Control of VOSB Company

The U.S. Court of Federal Claims recently issued an opinion clarifying the scope of reliance on an owner’s residency in determining ownership and control under the Veteran’s First Contracting Program.

In KWV, Incorporated v. U.S., the plaintiff was a business certified as a veteran-owned small business (VOSB) by the Center for Veterans Enterprise (CVE) by the U.S. Department of Veterans Affairs. KWV challenged its disqualification as a veteran-owned small business by the Office of Small Business and Disadvantaged Business Utilization (OSDBU) in response to a status protest filed against KWV by one of its competitors, Alares, LLC. OSDBU sided with Alares and concluded that the veteran in question was not “truly in control of the company” solely based on the veteran’s residency in another state. As OSDBU reasoned, the veteran’s residency made him “unable to manage the day-to-day operations of KWV.”

The Court, however, found that the OSDBU’s decision to revoke KWV’s VOSB status was arbitrary and capricious because as the Court noted, residency is not a determinative factor for control. In finding in favor of KWV, the Court noted that OSDBU “did not address any of those factors that 38 C.F.R. § 74.4 does identify as being relevant to control, viz.,’strategic policy setting,’ ‘day-to-day management and administration of business operations,’ and ‘managerial experience of the extent and complexity needed to run the concern.’” Moreover, the Court found that the agency overlooked and failed to examine the veteran’s involvement in the day-to-day management while present in Florida through a number of available communication methods such as “telephone, email and other electronic means.”

Thus, in ruling against the agency, the Court noted, “[a]side from OSDBU’s misplaced reliance on [the veteran’s] residency as the determinative factor for control, there is nothing in the administrative record to suggest that [the veteran] was not exercising sufficient control over KWV.”

http://www.uscfc.uscourts.gov/sites/default/files/opinions/LETTOW.KWV050913.pdf

Recent Developments

The National Institutes of Health (NIH) needs more Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) for its CIO-Solutions and Partners 3 (CIO-SP3) Small Business Government-wide Acquisition Contract (GWAC). Because a number of prior awardees… Read More

View All Recent Developments

Announcements

GCARL started the year off with a victorious bang for a client, Alpha Transcription, in a “Bet the Company” protest. If Alpha Transcription lost it could have been devastating for them. The Transcription Services Industry and Market is… Read More

View All Announcements

For More Information

Fill out our online form