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The federal government uses its contracting dollars not only to purchase the supplies and services it needs, but also to support broader policy goals. For example, the government has special contracting priorities for veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs), as well as women-owned small businesses (WOSBs) and economically-disadvantaged women-owned small businesses (EDWOSBs), and others, like the 8(a) business development program and small businesses more generally. In other words, these special types of businesses are able to compete for government contracts with a limited pool of competitors (and limited competition should yield a higher likelihood of business success for these small businesses). But access to these contracting priorities comes with a complex web of regulatory requirements unparalleled in the commercial sector. And one way to make sure that only eligible small businesses are receiving these special set-aside and sole-source awards is through what is known as a “status protest,” where it is alleged that the specialized small business does not actually qualify for the status and priority that is being claimed.

This article spotlights two relatively unique protests to a small business’s specialized status: (1) veteran-owned small business Center for Verification and Evaluation (CVE) status protests for U.S. Department of Veterans Affairs procurements and (2) women-owned small business status protests. Notably, the process for each type of status protest differs markedly—veteran-owned small business CVE status protests are handled at the Small Business Administration (SBA) Office of Hearings and Appeals (OHA), whereas women-owned small business protests start with SBA, followed by an appeal to the SBA OHA. While these protest procedures may be utilized less frequently than a standard small business size protest or a bid protest at the Government Accountability Office (GAO) or U.S. Court of Federal Claims, these specialized protests relating to VOSBs and WOSBs can be a useful tool in a disappointed offeror’s toolbox to challenge an unsuccessful contract award. Moreover, these specialized protests require tight deadlines, so VOSBs and WOSBs must be at the ready to either file or defend a status protest when needed.

Looking at these two processes together, it is clear that the government does not take a one-size-fits-all approach to its various small business programs. There is significant overlap in eligibility requirements at a general level, but each small business status is unique, with its own requirements and its own protest process. These inconsistent regulations and processes may make the federal government’s small business contracting program seem overly complex and serve as a real barrier to entry for new (typically small) businesses. Indeed, the numbers of small business government contractors continue to dwindle,[1] which may reflect the perception that the potential risks and burdens of federal contracting (like status protests) outweigh the potential benefits.

But while status protests may be daunting, they also serve as a relatively fast and efficient means to ensure that a veteran-owned or woman-owned small business is eligible and deserving of the special contracting preferences provided to them. Should you find yourself in a position to bring or defend such a protest, what follows is an overview of each process.

Veteran-Owned Small Business CVE Status Protests

Starting in 2018, the SBA OHA began addressing protests of eligibility for inclusion in the U.S. Department of Veterans Affairs (VA) Center for Verification and Evaluation database,[2] the database in which any veteran-owned small business must find itself in order to do business with the VA. Notably, CVE eligibility protests at OHA (referred to herein as veteran-owned small business status protests) are distinct from SDVOSB eligibility protests for non-VA procurements, which are governed by different regulations at 13 C.F.R. Part 125, Subpart D, and decided by the SBA’s Director of Government Contracting. There is also a separate process for a veteran-owned small business to challenge a CVE decision to deny or cancel its veteran-owned status in the CVE database, which is referred to as a CVE Appeal.[3] Those processes are beyond the scope of this article.

As of this writing, OHA has issued written public decisions in fewer than 100 CVE protests, so the precedent under these regulations is still new and evolving. As a result, many of these decisions look to common principles from other non-CVE decisions to interpret the relevant regulations. Perhaps you are thinking of filing a veteran-owned small business status protest against a competitor SDVOSB or VOSB that just won a VA award, or maybe your veteran-owned status has been challenged by a competitor; in either case, what follows is an overview of the process to give you an idea of what to expect.

Timeline of a Veteran-Owned Small Business Status Protest Filed by an Unsuccessful VA-Offeror

Who Can File a Veteran-Owned Small Business Status Protest?

There are three ways that a veteran-owned small business status protest can start: it can be filed by (1) the Secretary of the VA (or a designee) challenging the veteran-owned status of a company, generally, or, in the case of a VA contract awarded to a small business, either (2) the contracting officer or (3) an unsuccessful offeror can file a challenge with the contracting officer, which in turn is referred to the SBA OHA.[4] What this means in practice is that if you are a disappointed offeror and you have grounds to believe that the awardee is not an eligible veteran-owned small business for a VA contract, you can file a CVE protest yourself. But, unlike the VA, your time is limited.

When Is a Veteran-Owned Small Business Status Protest Filed?

Protest timeliness depends on who is filing the veteran-owned small business status protest. An offeror challenging the awardee’s status must file with the contracting officer within five business days of notice of the apparent awardee.[5] (The contracting officer will then refer the protest to the SBA.) Separately, a contracting officer may file a veteran-owned small business status protest at any time during “the life of the VA contract.”[6] Similarly, the Secretary of the VA (or designee) may file a veteran-owned small business status protest at any time.[7] While the best course of action for a disappointed bidder is to speedily file a veteran-owned small business status protest within the five-business-day deadline, all is not lost if the protester later becomes aware of viable protest grounds concerning the awardee. The protester can still contact either the contracting officer or Secretary of the VA (or designee) to try to convince them to file a protest.

What Grounds Are There for Filing a Veteran-Owned Small Business Status Protest?

There are three grounds for filing a veteran-owned small business status protest:

  • Status: The protest must raise specific allegations that the challenged small business owner(s) cannot provide appropriate documentation to show they are a “veteran,” “service-disabled veteran,” or “service-disabled veteran with a permanent and severe disability”;
  • Ownership and control: The protester must present credible evidence that the business is not 51% owned and controlled by one or more veterans or service-disabled veterans; or
  • Unusual reliance: The protestor alleges that the small business is unusually reliant on a non-CVE-verified subcontractor or that such subcontractor is performing the primary and vital requirements of a VA contract.[8]

While status, in general, is typically a more clear-cut issue—one that can usually be resolved fairly efficiently by reviewing VA documentation—ownership and control (especially control) and unusual reliance are less intuitive. The business must be at least 51% unconditionally and directly owned by a veteran (with certain limited exceptions for ownership by the veteran’s permanent caregiver or surviving spouse).[9]

There are a number of factors that contribute to who is deemed to control the small business. The veteran must conduct both the long-term decision-making and the day-to-day management and administration of the business operations.[10] But it is important to note that if another individual or entity has the power to control the small business, even if that control is never exercised, that is sufficient to disqualify the company. Consequently, veteran-owned small businesses must be careful not to cede to another entity approval authority (or veto power) over key business decisions. And such businesses should be careful regarding circumstances that raise questions about control, such as whether:

  • The veteran’s current or former employer (or a principal thereof) is involved in the management or ownership of the new veteran-owned business;
  • Co-located businesses, or companies that share resources, are in the same or similar line of business with enmeshed ownership;
  • Part-owners are providing critical financial bonding or support;
  • Critical licenses are held by other individuals or entities; or
  • Dependent business relationships exist between the veteran-owned business and other individuals or entities.[11]

Another potentially problematic constraint is the requirement that the veteran owner be physically located within a reasonable commute to the firm’s headquarters or job-site locations, with the regulations presuming that someone who is merely telecommuting is not exercising sufficient “control.”[12] This requirement is particularly problematic in today’s remote-work environment, where working from home has increasingly become the norm. This presumption is not overcome by the veteran’s ability to work remotely while delegating the responsibility of managing the business to others.[13] The regulations require hands-on control and interaction, not merely virtual or via teleconference, notwithstanding the fact that many of us work in an increasingly virtual space.

“Unusual reliance,” on the other hand, comes into play when the business violates the ostensible subcontractor rule—a situation where the subcontractor is performing the majority of the work under a services contract, such that the company is only ostensibly a subcontractor, but in reality would be functioning more like the prime.[14] The veteran-owned small business cannot subcontract to a non–similarly situated entity (i.e., another VOSB or SDVOSB, depending on the circumstances) the primary and vital requirements of the contract and cannot be unduly reliant on a non–similarly situated subcontractor to perform the contract. If the business, with any similarly situated entity, will meet the limitations on subcontracting rule (i.e., performing at least 50% of the contract work itself and subcontracting no more than 50% to other companies),[15] then it is not unusually reliant on a subcontractor.[16]

When a protest is filed in response to a specific procurement, eligibility is determined as of two key dates, and the veteran-owned business must be found eligible as of both dates: (1) the date of the bid or initial offer, including price, and (2) the date the veteran-owned small business status protest was filed with the contracting officer.[17] If the protest is not filed in response to a specific procurement, eligibility is determined as of the date the veteran-owned small business status protest is filed.[18]

What Does a Veteran-Owned Small Business Status Protest Look Like?

Unlike many filings in other judicial or quasi-judicial fora, there is no specific format for a veteran-owned small business status protest. In fact, normally, the protest will look just like a letter addressed to the contracting officer. But it must still contain a few key pieces of information:

  • the solicitation or contract number;
  • specific allegations, supported by credible evidence (documents, attachments, web links, etc.) that the business is ineligible for the CVE database (on the grounds specified above);
  • any other pertinent information the OHA administrative judge should consider; and
  • the name, address, telephone number, email address or fax number, and signature of the protester or its attorney.[19]

The rules of evidence are looser at OHA than in most courts. While OHA uses the Federal Rules of Evidence as a general guide, OHA judges may admit hearsay evidence deemed relevant and reliable.[20] Further, the judge has discretion regarding the weight to be afforded to any admissible hearsay evidence.[21] What this means is that protesters can use evidence like property records, company website information, etc. to bolster their protest grounds in the first place.

Like bid protests at the GAO or Court of Federal Claims, if you are a disappointed offeror filing a status protest and you want to see the case file, you should request a protective order within five days of filing the protest (unless good cause is shown as to why you could not have asked for a protective order earlier).[22] Alternatively, you can just request the protective order in your initial status protest.[23] Gaining access to information under a protective order effectively requires hiring outside counsel in most cases. You do not, strictly speaking, need to have an attorney to file a CVE status protest. But having outside counsel admitted under the protective order ensures that the protestor has the chance to raise supplemental protest grounds after reviewing the administrative record.

What Happens After a Veteran-Owned Small Business Status Protest Is Filed?

Once filed, the OHA administrative judge will review the protest and make some initial determinations:

  • If the protest is premature, untimely, nonspecific, or based on non-protestable allegations, the administrative judge will issue a notice of dismissal, citing the reasons for the dismissal. This is a final agency action.[24]
  • If the protest is timely, sufficiently specific, and based upon protestable allegations, the administrative judge will issue a notice and order setting out the due date for responses, including the filing of the CVE administrative record. The following parties will be notified: the protester, the protested small business concern, the Director of CVE, VA counsel, and, if applicable, the contracting officer.[25]

If the OHA administrative judge determines the protest should proceed, the Director of CVE must transmit the case file relating to the protested concern’s inclusion in the CVE database to OHA within the timetable established by the judge’s notice and order.[26] The protester then has 15 days within receiving or viewing the case file to file any supplemental protest grounds.[27]

The protested concern, the Director of CVE, the contracting officer, and any other interested party may respond to the protest and supplemental protest within 15 days.[28] The record closes the date the final response is due. A reply from the protestor may only be filed with the administrative judge’s permission.[29]

Can the Contracting Officer Award the Contract While the Veteran-Owned Small Business Status Protest Is Pending?

Generally, no; the award is stayed pending the administrative judge’s decision. The contracting officer, however, may notify the judge if the contracting officer determines that an award must be made to protect the public interest contract while the protest is pending.[30]

What Is the Basis for the Administrative Judge’s Final Decision?

The veteran-owned small business being challenged has the burden of proving its eligibility by a preponderance of the evidence.[31] The administrative judge gives greater weight to “specific, signed, factual evidence” than to “general unsupported allegations or opinions.”[32] If a party refuses or fails to provide requested information within a required time period, the judge “may assume” that disclosure would be contrary to that party’s interests.[33] The judge will base the decision “primarily” on the case file and information provided by the parties.[34] The judge has discretion to investigate issues beyond those raised in the protest and may make requests for additional information from the parties or may use other information.[35] There is, however, no formal discovery (beyond, of course, the review of the administrative CVE record).[36] In “extraordinary circumstances,” the judge will hold an oral hearing to question witnesses and test other evidence.[37]

How Long Until a Veteran-Owned Small Business Status Protest Is Decided?

All in all, it is likely that a protest that survives an initial dismissal will take from approximately six weeks to several months to resolve, depending on the scope and complexity of the protest, including the number of supplemental protest grounds and additional replies. I have seen protests resolved swiftly; I have seen other protests take nearly a year. It depends heavily on the complexity of the issues, the administrative judge’s caseload, and the urgency of the need for a formal decision.

What Is the Effect of the Decision?

If the judge determines the protested concern is a valid veteran-owned business or otherwise dismisses the protest, the contracting officer may award the contract to the protested concern and proceed with performance. If, however, the business is deemed to be ineligible, the contract is deemed void ab initio (invalid from the outset) and:

  • the contracting officer must rescind the award and award to the next eligible offeror in line for award;
  • the Director of CVE (soon to be the SBA in 2023), must remove the business from the veteran-owned small business database; and
  • the business may not submit any VA offers until CVE recertifies the disqualified company (soon to be any set-aside or sole source offers governmentwide until the SBA recertifies the disqualified company).[38]

The contracting officer must enter the disqualification decision in[39] The decision will be served on all of the parties and is considered the final agency action effective upon issuance.[40] While the decision may not be appealed, any party may file a request for reconsideration showing a material error of fact or law within 20 days of the decision.[41] Or an administrative judge may reconsider a decision on his or her own initiative.[42]

Upon issuance of the final decision, a party could seek to have the decision invalidated or reviewed at the U.S. Court of Federal Claims by alleging the decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under the Administrative Procedure Act.[43] But that review at the Court of Federal Claims will be highly deferential to the SBA OHA process.[44]

CVE Protests May Soon Include All Veteran-Owned Small Business Status Protests

Currently, the SBA’s Director of Government Contracting handles status protests of self-certified SDVOSBs and VOSBs for non-VA procurements, while OHA handles CVE protests—reviewing the record and analysis that CVE conducted in issuing a formal certification to an SDVOSB or VOSB. But this landscape is set to change on January 1, 2023, if a proposed rule is enacted that requires certification for SDVOSBs and VOSBs government-wide (not just at the VA) to qualify for set-asides and sole-source procurements.[45] The independent authority to issue a SDVOSB or VOSB certification will move from the VA’s CVE, newly shifting to the SBA.[46] With broadened certification requirements will come a broadened pool of potential SDVOSB and VOSB protests, all of which will be handled by OHA, regardless of the procuring agency. At that point, CVE protests will be known as veteran-owned or service-disabled veteran-owned small business status protests; or they may be known as something else entirely. The above overview of the CVE protest process as it stands today will likely soon be the process for all SDVOSB and VOSB status protests (although the proposed rule does not amend 13 C.F.R. Part 134, which outlines the CVE process, the current proposed rule merely notes that section will be amended separately). Time will tell how these regulations are consolidated or amended, but the process is likely to remain substantially the same.

Women-Owned Small Business Status Protests

As with the veteran-owned small business CVE status protest outlined above, one oversight mechanism to ensure compliance with the WOSB and EDWOSB regulations and requirements is the ability of competitors to file a protest at the SBA. What follows is an overview of what you need to know if you are thinking of bringing, or defending, a WOSB protest, and, if you lose, how you can go about appealing that decision. The protest and appeal process can move quickly, with tight turnaround times of as little as five days to protest or respond. While the initial protest will likely be resolved in under six weeks, any further appeal to the SBA Office of Hearings and Appeals or litigation in federal court could draw the process out by several months. The WOSB and EDWOSB regulations are set forth at 13 C.F.R. Subpart F (§§ 127.600–127.605).

Timeline of a WOSB Protest Filed by a Disappointed Offeror

Timeline of a WOSB Appeal

Who Can File a WOSB Protest?

There are three potential sources of WOSB protests:

(1) SBA;

(2) the contracting officer; or

(3) another offeror.[47]

For sole-source procurements, however, only the SBA or the contracting officer may bring a protest.[48] What this means in practice is that if you are a disappointed offeror and you have grounds to believe that the competitive awardee is not an eligible WOSB or EDWOSB, you can bring a WOSB/EDWOSB protest. But if you believe that an ineligible competitor received a WOSB or EDWOSB sole-source contract, then you must convince the contracting officer or SBA to bring the protest.

When Is a WOSB Protest Filed?

A disappointed offeror must file a protest with the contracting officer prior to the close of business on the fifth business day after the later of:

  • notice by the contracting officer of the apparent successful offeror or of the actual award (negotiated procurements); or
  • bid opening (sealed bids).[49]

A protest prior to bid opening or notice of the intended awardee is premature.[50] The protest only applies to the procurement in question.[51]

The contracting officer or SBA may file a protest any time after bid opening or notification of the apparent awardee, as is the case if a potential offeror manages to convince the contracting officer to challenge a sole-source awardee’s eligibility.[52]

Can a WOSB Protest and Size Status Protest Be Filed Together?

No, a WOSB/EDWOSB protest and size protest must be filed separately, although both are filed with the contracting officer.[53] But each type of protest has its own set of regulations, although the timing and process for each protest is similar.

What Are Grounds for Filing a WOSB Protest?

The protest must present sufficient credible evidence to show:

  • the concern is not 51% owned and controlled by one or more women who are U.S. citizens;
  • in the case of an EDWOSB contract, the concern is not at least 51% owned and controlled by one or more economically disadvantaged women;
  • the concern is unusually reliant on a small, non–similarly situated entity subcontractor (i.e., not another WOSB or EDWOSB);
  • a small, non-WOSB/EDWOSB subcontractor is performing the primary and vital requirements of a set-aside or sole-source WOSB or EDWOSB contract;
  • the contracting officer may bring a protest if the apparent successful offeror failed to provide all required documentation;
  • the WOSB or EDWOSB partner to a joint venture did not meet the eligibility; or
  • the WOSB or EDWOSB joint venture did not meet the applicable requirements.[54]

What Does a WOSB Protest Look Like?

As with a CVE protest, there is no specific format for a WOSB or EDWOSB protest. It must be in writing and set forth specific allegations or facts supporting the protest grounds.[55] Generally, it is styled as a letter setting forth the background, the factual allegations supporting the protest, and request for relief from the contracting officer and SBA.

Where Is a WOSB Protest Filed?

A disappointed offeror must deliver their protest to the contracting officer.[56] A protest filed directly by the contracting officer or SBA is delivered to the SBA’s Director of Government Contracting.[57]

What Happens After a WOSB Protest Is Filed?

Upon receiving a disappointed offeror’s protest, the contracting officer forwards the protest to the SBA, along with a referral letter and documents.[58] The SBA will then determine whether to dismiss the protest or proceed, and the SBA will notify the contracting officer and protester of its decision.[59] Grounds for dismissal include if the protest is premature, untimely, nonspecific, or based on nonprotestable allegations.[60] If the SBA determines the protest will proceed, it will notify the protested WOSB and request information and documents responding to the protest within five business days.[61] SBA may draw an adverse inference if the business does not provide the requested documents or information.[62] In other words, the WOSB must immediately compile its response—there is no time for delay. If the WOSB does not respond completely, the SBA may hold that against the WOSB in making the final determination.

In most cases the contracting officer will stay the award of the pending contract until the protest is determined. But the contracting officer may award the contract notwithstanding the protest, if the contracting officer determines in writing that award must be made to protect the public interest.[63]

The SBA will typically issue a written determination of the status of the protested concern within 15 business days, unless the contracting officer grants an extension.[64] But if SBA takes longer, the contracting officer may award the contract if he or she determines in writing there is an immediate need to award the contract and that waiting for SBA’s decision will prejudice the government.[65]

If the SBA sustains the protest and determines that the WOSB does not qualify, the concern must remove its WOSB/EDWOSB status from the federal System for Award Management; the business is then ineligible and may not submit an offer as a WOSB until it has been recertified.[66] The effect of the sustained protest is immediate.[67] If the contract was awarded, it must be terminated, unless an appeal has been filed.[68] If the protested business timely appeals to OHA after award, the contracting officer must consider whether performance can be suspended until the appeal is decided.[69] If OHA affirms the SBA’s ineligibility decision, the contracting officer must either terminate the contract, not exercise the next option (i.e., allow performance to continue until the end of the current period of performance), or not award further task or delivery orders.[70]

Regardless of SBA’s decision, the SBA has discretion to consider the protest allegations in determining whether to conduct a separate program eligibility examination of the protested concern, verifying the accuracy of the business’s WOSB/EDWOSB status.[71]

Can the SBA’s Decision Be Appealed?

Yes, the WOSB, the protester, or the contracting officer may appeal the SBA’s decision to OHA within 10 business days of receiving the protest decision.[72] As noted above, OHA is a quasi-judicial forum. Just as with the initial protest, there is no required format of an appeal petition, but it must provide a full and specific explanation of why the decision below is based on a clear error of fact or law.[73] The appeal must be served upon the SBA Director of Government Contracting, the contracting officer, the protested concern or the protester, and the SBA Office of General Counsel.[74] The SBA Director of Government Contracting, upon receipt of the appeal petition, will send OHA a copy of the protest file.[75]

OHA will dismiss the appeal if it is untimely or if the matter has been decided or is in litigation before a court of competent jurisdiction.[76] But after the appeal has been filed, starting litigation in court does not preclude OHA from rendering a final decision on the matter.[77]

Anyone who was served with the appeal petition may (but is not required to) file a response within seven business days of service, at which point the record closes.[78]

OHA must issue a decision within 15 business days after close of the record, if practicable.[79] OHA will make a determination on the basis of the written protest file without discovery or oral hearings.[80] The decision is final and effective immediately.[81] OHA may reconsider an appeal decision within 20 calendar days of the decision’s issuance, either on the administrative judge’s own initiative or upon a petition for reconsideration filed by any party who appeared in the proceeding, which must be filed within the 20-day window for reconsideration.[82] Alternatively, the administrative judge may remand the proceeding to the SBA Director of Government Contracting for a new WOSB or EDWOSB determination if the SBA failed to address issues of decisional significance, did not address all relevant evidence, or did not identify specifically the evidence upon which it relied.[83] Once remanded, OHA no longer has jurisdiction, unless a new appeal is filed from the SBA’s new WOSB/EDWOSB determination.[84]

As with veteran-owned small business CVE protests, upon issuance of the decision, a party could seek to have the WOSB decision at OHA invalidated at the Court of Federal Claims by alleging the decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under the Administrative Procedure Act.[85] But, again, that review at the Court of Federal Claims will be highly deferential to the SBA OHA process.[86]

Closing Thoughts and Takeaways

The federal government has an annual goal of awarding 3% of all federal contracting dollars to SDVOSBs (which the government continuously meets) and 5% to WOSBs (which the government continuously misses).[87] In FY 2021, this translated to $25 billion in SDVOSB prime contracts, $5.2 billion in SDVOSB subcontracts, $26.2 billion in WOSB prime contracts, and $12.2 billion in WOSB subcontracts. These are lucrative sectors within the federal marketplace, but veteran-owned and women-owned small businesses must be sure to continuously meet the rigorous, unique ownership and control requirements to qualify for set-aside and sole-source awards. Competitors, the contracting officer, and the SBA will be on the lookout for businesses that may not be eligible and may use the protest processes at SBA and OHA to challenge eligibility.

For a disappointed offeror, veteran-owned and women-owned small business status protests can provide a relatively fast, efficient means to stay the award of a contract and challenge the status of a competitor. A status protest may be a preferable alternative to a GAO protest if there is good reason to question the awardee’s eligibility. Or, more commonly, a veteran-owned or woman-owned small business status protest may be filed in parallel with a GAO protest, giving a protestor two alternate avenues to challenge a competitor’s award.

These protests have short deadlines—a disappointed offeror has only five business days to file the protest and the protested concern has only five business days to respond (or face an adverse inference for any information not timely provided). As a result, a disappointed offeror that suspects a competitor in a procurement is ineligible should consider gathering evidence and outlining a protest before the award decision. And businesses should ensure that their corporate documents and evidence of eligibility are well-organized and easily accessible so that they may be quickly provided in the event of a protest. Much of the relevant information was likely assembled for the women-owned small business’s initial certification through the SBA or an approved third-party certifier or for the veteran-owned small business’s initial certification through CVE (but likely soon to be SBA starting in January 2023). So, continuing to have this information close at hand is a wise best practice.

But, from a protested concern’s perspective, these status protests can be an unwelcome hurdle before receiving a contract. Ultimately, women-owned and veteran-owned small business protests are a good reminder that these specialty small businesses should be mindful of the regulatory requirements regarding status, ownership and control, and unusual reliance on an ongoing basis—not just when they are certified or recertified every three years. It is important that the qualifying owners meaningfully control the small business and are not merely a front for someone else. Further, veteran-owned and women-owned small businesses should be conscious that their competitors may be on the lookout for viable protest grounds.

Specialty small businesses may want to take a regular, holistic look at their business practices to ensure that they are above reproach, but particularly before submitting any proposals. Veteran-owned and women-owned small business eligibility should remain a consideration in ongoing corporate governance and structure decisions. Businesses should carefully consider the impact of any changes in ownership or corporate structure after certification, such as bringing in new part-owners of the business, revising corporate documents that could cede too much control, or delegating too much decision-making. Trying to anticipate and ward off potential small business status protest grounds may avoid stayed awards, a fast and stressful protest process, and the potential loss of eligibility for lucrative federal set-aside and sole-source awards. Moreover, a false certification could give rise to fraud liability, and no one wants to be accused of defrauding the U.S. government.

Ultimately, any small business seeking to enter the federal marketplace should be well-versed in the applicable regulations, but this is particularly true of specialty small businesses. It is not enough to comply with contract terms and conditions; these businesses must meticulously maintain their veteran-owned or women-owned status through meeting day-to-day management and control requirements, ownership structure requirements, and knowledge of how and when to challenge or defend their small business status. As we have seen above, requirements for veteran-owned and women-owned small business status protests vary greatly in terms of the logistics, but the ultimate result is the same: a quick, detailed look to make sure that a business is eligible for award.

©2022. Published in The Procurement Lawyer, Vol. 57, No. 4, Fall 2022, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.


[1]. See Government Wide FY2021 Small Business Procurement Scorecard, U.S. Small Bus. Admin.,

[2]. 38 C.F.R. pt. 74; 13 C.F.R. § 134.102(u), 134 subpt. J.

[3]. 13 C.F.R. pt. 134, subpt. K.

[4]. Id. § 134.1002.

[5]. Id. § 134.1004(a)(2)(i).

[6]. Id. § 134.1004(a)(2)(ii).

[7]. Id. § 134.1004(a)(1).

[8]. Id. § 134.1003(a), (b), (c).

[9]. Id. §§ 125.12, 125.13; 38 C.F.R. § 74.3.

[10]. 13 C.F.R. § 125.13; see also 38 C.F.R. § 74.4.

[11]. 13 C.F.R. § 125.14(i).

[12]. Id. § 125.14(l).

[13]. Id.

[14] See id. § 125.18(f).

[15]. Id. § 125.6.

[16] See id. § 125.18(f)(2).

[17]. Id. § 134.1003(d)(1).

[18]. Id. § 134.1003(d)(2).

[19]. Id. § 134.1005(a).

[20]. Id. § 134.223.

[21]. Id.

[22]. Id. § 134.1007(d); see also id. § 134.205.

[23] Id. § 134.1005(b).

[24]. Id. § 134.1007(b).

[25]. Id. § 134.1007(a).

[26]. Id. § 134.1007(c).

[27]. Id. § 134.1007(e).

[28]. Id. § 134.1007(f)(1).

[29]. Id. § 134.1007(f)(3).

[30]. Id. § 134.1007(h).

[31] Id. § 134.1010.

[32] Id. § 134.1011.

[33] Id.

[34] Id. § 134.1007(g).

[35] Id.

[36] Id. § 134.1008.

[37]. Id. § 134.1009.

[38] Id. § 134.1007(j).

[39] See id. § 134.1007(j)(3).

[40] Id. § 134.1007(i).

[41] Id. § 134.1013.

[42]. Id..

[43] See 28 U.S.C. § 1491(b)(1); Superior Optical Labs, Inc. v. United States, 158 Fed. Cl. 262 (2022).

[44] Superior Optical Labs, Inc., 158 Fed. Cl. at 273; Darton Innovative Techs., Inc. v. United States, 153 Fed. Cl. 440, 451 (2021); Obsidian Sols. Grp., LLC v. United States, 153 Fed. Cl. 334, 341–42 (2021); Eagle Design & Mgmt., Inc. v. United States, 57 Fed. Cl. 271, 273 (2002).

[45]. 87 Fed. Reg. 40141 (July 6, 2022).

[46]. Id.

[47]. 13 C.F.R. §§ 127.102, 127.600.

[48]. Id. § 127.600(a).

[49]. Id. § 127.603(c)(1), (2).

[50]. Id. § 127.603(c)(4).

[51]. Id. § 127.603(c)(5).

[52]. Id. § 127.603(c)(3).

[53]. Id. § 127.601.

[54]. Id. § 127.602.

[55]. Id. § 127.603(a).

[56]. Id. § 127.603(b)(1).

[57]. Id. § 127.603(b)(2).

[58]. Id. § 127.603(d).

[59]. Id. § 127.604(a), (b).

[60]. Id. § 127.604(b).

[61]. Id. § 127.604(c).

[62]. Id. § 127.604(c)(1).

[63]. Id. § 127.604(a).

[64]. Id. § 127.604(d).

[65]. Id.

[66]. See id. § 127.604(f).

[67]. Id.

[68]. Id. § 127.604(f)(2)(i).

[69]. Id. §§ 127.604(f)(2)(ii), 134.704.

[70]. Id. § 127.604(f)(2)(iii).

[71]. See id. § 127 subpt. D.

[72]. Id. §§ 127.605, 134.703.

[73]. Id. § 134.705(a).

[74]. Id. § 134.705(b).

[75]. Id. § 134.707.

[76]. Id. § 134.709.

[77]. Id. § 134.709(b).

[78]. Id. §§ 134.710, 134.713.

[79]. Id. § 134.714.

[80]. See id. §§ 134.711, 134.712.

[81]. Id. § 134.714.

[82]. Id. § 134.715(a).

[83]. Id. § 134.715(b).

[84]. Id.

[85] See 28 U.S.C. § 1491(b)(1).

[86] See supra, note 44.

[87]. U.S. Small Bus. Admin., FY 2022 Goaling Guidelines (Mar. 2022), available at; Government Wide FY2021 Small Business Procurement Scorecard, supra note 1.