We recently prevailed in defending an SBA Size Determination that was appealed to the U.S. SBA Office of Hearing and Appeals. The VA awarded three contracts to G&C for construction projects at national cemeteries. Our client, Freedom Contracting, submitted a size protest.
We argued that G&C was affiliated with several other companies based on family relationships and common management. The Office of Hearings and Appeals agreed and counted the revenue of several other affiliated companies when determining whether G&C exceeded the $33.5M small business size standard.
The second issue was an accounting one. G&C argued that revenue exchanged between affiliates should not be counted towards revenue. G&C cited an exclusion under SBA size standard regulation 13 C.F.R. § 121.104(a), which excludes revenue between “transactions between a concern and its domestic or foreign affiliates.” The Office of Hearing and Appeals held that this provision only applied to revenue “between a parent company and its subsidiary, irrespective of whether a consolidated tax return was filed.” This prevents companies affiliated by other means, such as by common management or ownership, from unfairly excluding revenue between themselves when determining size.
SIZE APPEAL OF: G&C Fab-Con, LLC, APPELLANT, SBA No. SIZ-5649 (March 23, 2015)
