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SmallGovCon: Nonprofit Parent Companies do not Automatically Cause Affiliation for SBA Size Determinations

The Office of Hearings and Appeals, more commonly referred to as OHA, is tasked with deciding size determination appeals that arise under the Small Business Act of 1958, as well as 13 C.F.R. parts 121 and 134. When an unsuccessful offeror raises a question, via a size protest, regarding an Awardee’s size under the North American Industry Classification System (NAICS) code on any given solicitation, the SBA Area Office will review the protest and issue a size determination. Then, a losing party can appeal the size determination to OHA.

Affiliation is a common topic that OHA addresses. In a recent decision, OHA looked at the question of how nonprofits fit into the affiliation rules. Since a small business has to be a for-profit entity, can a small business be affiliated with a nonprofit parent company?…

On appeal, ACS Ventures again asserted that Awardee was affiliated with the non-profit parent company. Further, ACS Ventures claimed that the parent company’s non-profit status rendered Awardee ineligible for award per 13 C.F.R. 121.105(a)(1), which requires that a small business concern must be “organized for profit” in order to be eligible for SBA assistance. Finally, ACS Ventures claimed that Awardee’s relationship with its non-profit parent company gave it an unfair advantage when competing with other for-profit concerns.

Despite ACS Ventures’ claims, OHA precedent holds that “mere affiliation with a non-profit organization does not render a small business ineligible for small business set-aside contracts.” Accordingly, Awardee’s affiliation with the non-profit parent company did not make Awardee an “other than small” business and did not, in turn, make Awardee ineligible for award… Read the full article here.

This topic has 0 replies, 1 voice, and was last updated 4 months, 1 week ago by Jackie Gilbert.

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