• R.D. Lieberman,Consultant

A Business Controlled by a Man is not "Woman-Owned"

The Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) recently considered whether a business was a “Women-Owned Small Business” (“WOSB"). One section of the SBA rules on WOSB’s is 13 CFR § 127.201, and this requires that one or more women must unconditionally and directly own at least 51 percent of the concern. In addition, the SBA rules require that the management and daily business operations of the concern must be controlled by one or more women, 13 CFR § 127.202(a), and a woman must hold the firm’s highest officer position. 13 CFR § 127.202(b). Although a woman met the 51 percent ownership requirement, she did not have control of the company, and OHA ruled that the concern was not a WOSB under the SBA rules. Yard Masters, Inc. SBA No. WOSB-109, Oct. 11, 2017.

First, OHA concluded that there was adequate documentation that Sally Wade owned 51 percent of the company’s stock, and met that requirement for a WOSB. However, Yard Masters had argued that Sally Wade was the Chief Executive Officer (“CEO”). However, the Board of Directors never formally created the position of CEO, and never changed the Bylaws to do so. The concern’s Bylaws clearly stated that the President was the corporation’s “chief administrative and executive officer.” That position was held by Bryce Wade, a man, who had been head of the corporation for 10 prior years. Further, Mr. Wade had signed Yard Master’s offer for the procurement at issue in this appeal, and executed all binding documents on its behalf. OHA concluded that Mr. Wade managed the concern’s day-to-day operations, and therefore, Yard Masters was not controlled by a woman, and was not a WOSB.

For other helpful suggestions on government contracting, visit:

Richard D. Lieberman’s FAR Consulting & Training at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes.

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The website of Richard Donald Lieberman, a government contracts consultant and retired attorney who is the author of both "The 100 Worst Mistakes in Government Contracting" (with Jason Morgan) and "The 100 Worst Government Mistakes in Government Contracting." Richard Lieberman concentrates on Federal Acquisition Regulation (FAR) consulting and training, including  commercial item contracting (FAR Part 12), compliance with proposal requirements (FAR Part 15 negotiated procurement), sealed bidding (FAR Part 14), compliance with solicitation requirements, contract administration (FAR Part 42), contract modifications and changes (FAR Part 43), subcontracting and flowdown requirements (FAR Part 44), government property (FAR Part 45), quality assurance (FAR Part 46), obtaining invoiced payments owed to contractors,  and other compliance with the FAR. Mr.Lieberman is also involved in numerous community service activities.  See LinkedIn profile at https://www.linkedin.com/in/richard-d-lieberman-3a25257a/.This website and blog are for educational and information purposes only.  Nothing posted on this website constitutes legal advice, which can only be obtained from a qualified attorney. Website Owner/Consultant does not engage in the practice of law and will not provide legal advice or legal services based on competence and standing in the law. Legal filings and other aspects of a legal practice must be performed by an appropriate attorney. Using this website does not establish an attorney-client relationship. Although the author strives to present accurate information, the information provided on this site is not guaranteed to be complete, correct or up-to-date.  The views expressed on this blog are solely those of the author. FAR Consulting & Training, Bethesda, Maryland, Tel. 202-520-5780, rliebermanconsultant@gmail.com

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