Small Business Designation

Small Business Designation Appeal Succeeds

Maryland-based INV Technologies, Inc. has won an appeal over whether it was eligible for a small business designation for a contract with the U.S. Air Force.

INV was announced as the winner of the contract, but a company that lost out on the bidding filed a protest to INV’s small business designation. The protest argued that INV’s owner and president, Chandan Jhunjhunwala, was also the program management office manager for SNAP, Inc., and that relationship constituted a relationship between the two companies.

INV lost the initial protest but appealed the decision. The SBA Office of Hearings and Appeals reversed the decision and awarded INV the contract, saying that Jhunjhunwala was not a “key employee” of Snap.

The office stated, “(T)he touchstone issue is control. A connection between two concerns does not necessarily cause affiliation.  There must be an element of control present” and added, “[a] key employee is one who, because of his position in the concern, has a critical influence over the operations or management of the concern.”

According to the facts in the case, INV was “owned and solely controlled by Mr. Jhunjhunwala.” However, “the record does not support the conclusion that [Mr. Jhunjhunwala] could control both [INV] and SNAP.” This allowed them to keep their small business designation.

Source

KDuncan & Company is dedicated to providing knowledge and support for small government contractors about concerns regarding government contracting. For questions on areas such as as cost proposals, accounting systems, DCAA compliance, and incurred cost audits, reach out to KDuncan & Company.

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