On July 21, 2021, the VA Center for Verification and Evaluation (CVE) cancelled a contractor’s verification status because it did not report a change in ownership within 30 days of its occurrence. As a result, the contractor had to wait six (6) months before reapplying for verification.

The contractor appealed CVE’s cancellation of its verification. The SBA Office of Hearings and Appeals (SBA OHA) upheld CVE’s cancellation as proper. SBA OHA noted that the VA regulation requires notification of ownership change within 30 days and does not permit a contractor to cure this defect after CVE discovered it. As a result, the contractor had to wait 6-months before reapplying for verification.

The VA regulations on SDVOSBs provide that:

A participant may remain eligible after a change in its ownership or business structure, so long as one or more veterans own and control it after the change. The participant must file an updated VA Form 0877 and supporting documentation identifying the new veteran owners or the new business interest within 30 days of the change .

Because the contactor failed to submit a Form 0877 to report the ownership change, OHA held that the VA CVE properly cancelled its SDVOSB status:

To be an eligible SDVOSB, a concern must be owned and controlled by a service-disabled veteran. 13 C.F.R. § 125.11. A concern must file a VA Form 0877 identifying its owners/stockholders as part of the application process. 38 C.F.R. § 74.12. A change in a concern’s ownership must be documented with a new VA Form 0877, identifying the new owners within 30 days of the change. 38 C.F.R. § 74.3(b)(1) (emphasis supplied).

In the Matter of: Warrior Service Company, LLC, SBA CVE 214-A (December 9, 2021)