SIZE APPEAL OF: SAGE ACQUISITIONS, LLC, APPELLANT
SBA No. SIZ-5783, 20162016 WL 6
In a recently published decision, the SBA’s Office of Hearings and Appeals (“OHA”) held that when the 8(a) partner to a Joint Venture protected from affiliation by the Mentor Protégé exception performs only the “administrative and ministerial” functions of a contract, the Joint Venture rules are not followed. Thus, affiliation will be found, and, in this case, the firm found “other than small.” Other factors in this determination included:
- One member of the joint venture was affiliated with another firm (bringing those revenues into play for size determination;
- The 8(a) partner in the joint venture did not have the power to control the joint venture;
- The other than small partner could exercise negative control over the joint venture; and
- The 8(a)partner’s work was administrative and ministerial, the 8(a) firm failed to gain the substantive experience required in the regulations.
- Thus, the joint venture did not follow the requirements of the regulations, affiliation was found, and the joint venture was deemed other than small.