Gregory Landscaping Services, Inc. was awarded a contract to provide landscaping and grounds maintenance at Fort Rucker in Alabama. The company was a husband and wife team, and Bethany Kellis owned 51% and her husband, Rhett Kellis, owned the remaining 49%. The family also has several other companies that Bethany either owned an interest or was an employee.
After the contract was awarded, another bidder filed a protest. The protester argued that the contract was a women-owned and small business (WOSB) set aside and made the case that Gregory Landscaping Services, Inc. did not qualify for the designation.
The Small Business Administration heard the appeal and decided to treat Bethany and Rhett as a single entity, because they had “a shared identity of interest as there is no clear line of fracture between them.” They also ruled that Gregory was affiliated with other family-owned businesses, because the company had not shown a clear line of separation. Thus, the SBA ruled that Gregory did not qualify for the WOSB program designation.
Gregory appealed the ruling, and the SBA Office of Hearings and Appeals heard the case. The company presented several arguments that the husband and wife team should be treated as separate entities and not as a single person under the WOSB program. The appeal was denied.
The office agreed with the initial ruling and said Small Business Administration has plenty of case history to create “a rebuttable presumption that close family members have identical interests and must be treated as one person.” It argued that there was clear evidence that Bethany owned an interest in another family company.
The ruling shows that family-owned companies need to be careful when seeking minority or small business status for a government contract.
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