As there were three different protests combined into one, it is good to lay some initial groundwork to keep things straight. In Caduceus Med. Logistics LLC, SBA No. CVE-239 (2022), a SDVOSB was challenged related to three different contracts they received for Medical Courier Services. The SDVOSB was 81% owned by a service-disabled veteran and 19% by a non-veteran. So, the major focus of the protests were on whether the service-disabled veteran “fully controlled” the SDVOSB. The service-disabled veteran served as the CEO and the managing member of the company, while the non-veteran owner served as the President of the SDVOSB.
The three protests (and their supplemental filings) presented basically the same arguments and allegations related to control, which were focused on the experience of the service-disabled veteran owner, the full-time devotion of the service-disabled veteran owner to the SDVOSB, and the service-disabled veteran owner’s oversight of the SDVOSB and its work…
It is quite common for SDVOSB certifications to fail due to the service-disabled veteran owner having another job, not having a clear operating agreement designating the service-disabled owner as the ultimate control and majority owner, or the service-disabled veteran owner is not located near enough to the company’s headquarters/work. This case demonstrates that an SDVOSB can be successfully overseen and controlled by a service-disabled owner who has a second job, so long as that second job is not more important than the SDVOSB and occurs outside of the SDVOSB’s normal business hours. Additionally, as industries across the nation have shifted to being run from homes, it may be possible for service-disabled veteran owners to exercise the needed control over their SDVOSBs, if the headquarters are located at their home (or rather close to it), they have robust oversight structures in place, and they truly are exercising the day-to-day and long term decision making authority that is expected of them. Of course, the bedrock of all of this, was a strongly established reporting, decision making, and authority structure built into the SDVOSB, established through its operating documents, which ensured control (and ownership) was undoubtedly with the service-disabled veteran owner… Read the full article here.
