SBA SDVOSB OHA Certification Appeal

The situation

James, 52, is a US Army veteran with a 70% VA service-connected disability rating (traumatic brain injury from a 2005 IED strike). In 2017, James co-founded Apex Defense Systems LLC (cybersecurity consulting, $3.8M revenue) with two business partners, James holds 51% ownership; his two non-veteran partners hold 49% combined.

In April 2024, James applied for SBA SDVOSB certification (he previously held VA CVE certification, which expired after the January 2023 consolidation). In September 2024, SBA denied the application. Denial grounds: "Applicant does not demonstrate unconditional control of the firm, the LLC Operating Agreement's supermajority voting provision (requiring 66.7% member vote for 'material business decisions' including hiring/firing officers, entering contracts over $500,000, adding or removing members) allows the non-veteran members to block decisions that would otherwise be within the veteran-owner's management authority. Therefore, the veteran-owner does not 'unconditionally control' the firm within the meaning of 13 CFR § 128.202."

James has 30 days from the SBA denial letter to file an OHA appeal.

What James needs to understand: (a) 13 CFR § 128.202 requires the veteran to 'unconditionally control' the firm, but 'unconditional control' applies to DAILY OPERATIONS AND LONG-TERM DECISIONS, not necessarily every extraordinary corporate action. SBA's own regulations at 13 CFR § 128.202(b) acknowledge that supermajority requirements for "extraordinary business decisions" (like selling the business, issuing new equity, or dissolving the company) do not necessarily undermine unconditional control, because even non-veteran-controlled companies require supermajority votes for these decisions. (b) The key distinction is between extraordinary corporate actions vs. operational management. If James's operating agreement's supermajority provision covers only extraordinary corporate-level decisions (adding members, winding up) but NOT day-to-day management decisions (hiring/firing employees, entering client contracts in the normal course of business), James may have a strong argument that the supermajority clause does not impair his operational control. (c) The OHA appeal should include: (i) an amended operating agreement (if James and his partners can agree) that narrows the supermajority clause to truly extraordinary decisions; OR (ii) an argument that the existing supermajority clause covers only the types of extraordinary actions that SBA's own regulations allow to require supermajority votes; (iii) evidence of James's actual operational control (employment decisions he made, contracts he signed, business accounts he manages). (d) The 30-day deadline is non-negotiable. Missing it waives OHA appeal rights. Attorney quote: $8,500. The control analysis and operating agreement review are structured analytical tasks.

Second portrait: Lisa, 46, is an Army veteran (40% VA service-connected disability for PTSD). She founded Federal IT Solutions LLC in 2018 and held VA CVE SDVOSB certification from 2020-2023. In January 2023, Lisa applied for SBA SDVOSB certification to continue qualifying for set-asides.

SBA's denial (March 2024): "The applicant fails to demonstrate unconditional control, the firm's Chief Operating Officer (a non-veteran) manages day-to-day operations including employee supervision, client project delivery, and contract performance. The veteran-owner's role appears to be primarily focused on business development and external relationships rather than the operational control required by 13 CFR § 128.202."

What Lisa needs to understand: (a) The SBA auditor applied the wrong standard. Under 13 CFR § 128.202, "unconditional control" means the veteran HOLDS THE HIGHEST OFFICER POSITION AND MAKES LONG-TERM STRATEGIC DECISIONS, it does NOT require the veteran to personally manage every operational function. The regulation specifically permits veteran-owners to delegate supervisory and operational tasks to employees. (b) Lisa's OHA appeal should demonstrate: (i) Lisa holds the CEO title and is the highest officer of Federal IT Solutions; (ii) Lisa makes all hiring and firing decisions, strategic client decisions, and long-term business direction decisions; (iii) the COO is a delegated manager who REPORTS TO LISA and cannot act independently of Lisa's direction; (iv) Lisa signs all significant contracts and is the public face of the firm to government contracting officers. (c) The business development focus does NOT disqualify veteran control. Many veteran-owned government contractors have veteran-owners who focus on business development while operational staff handle project delivery, SBA's regulations require the veteran to control the FIRM, not to personally deliver every line of code or service. (d) Documentation: Lisa needs corporate resolutions, emails showing her directing the COO, employment agreements, and client communications showing her as the primary decision-maker.

Who receives this

Service-disabled veteran (SDVOSB) or veteran (VOSB) small business owners who: (a) received an SBA denial of their initial SDVOSB/VOSB certification application; or (b) received an SBA Notice of Intent to Decertify their SDVOSB/VOSB status. Primary segments: (1) Veterans who transitioned from VA CVE to SBA certification (2023-2025) and received denials under SBA's more stringent documentation/control standards; (2) SDVOSB firms where the veteran-owner co-manages with non-veteran partners or employees and SBA raised "unconditional control" objections; (3) SDVOSB firms where operating agreement provisions triggered the supermajority/control objection. Scale: The SBA processed approximately 3,000-5,000 SDVOSB/VOSB certification applications in FY2023-2024 (the first year as sole certifier); OHA received a significant increase in SDVOSB appeals post-consolidation.

Why the agency will not advise you

SBA cannot advise applicants how to contest its own denials. OHA is genuinely independent (established 1983, 13 CFR Part 134). appeals.sba.gov = FILING PORTAL only. SmallGovCon = informational blog (not self-serve). Potomac Law / Whitcomb Selinsky / Smith Pachter = professional services (not self-serve). DEMOGRAPHIC WAVE: The FY2021 NDAA consolidation from VA CVE to SBA created a defined class of veterans needing fresh SBA certification under new standards, generating a wave of denials and OHA appeals in 2023-2025 as VA CVE certifications expired.

Key facts, with sources

• The SBA's SDVOSB and VOSB certification programs (13 CFR Part 128) provide federal contract set-asides: SDVOSB set-asides are available under FAR 19.1405 when two or more SDVOSBs can perform the work at a fair price. As of January 1, 2023 (NDAA for Fiscal Year 2021, § 862), the SBA became the sole certifying authority for SDVOSB and VOSB certification, eliminating the prior parallel VA CVE (Center for Verification and Evaluation) certification program. Veterans who held VA CVE certification must obtain SBA certification to continue qualifying for SDVOSB/VOSB set-asides. The SBA's OHA hears appeals of SDVOSB/VOSB certification denials and decertification decisions. The OHA was established in 1983 as an independent body within the SBA (13 CFR Part 134), OHA Administrative Law Judges are NOT employees of the SBA's Office of Government Contracting and Business Development (the unit that makes certification decisions). When the SBA denies an SDVOSB/VOSB application or initiates decertification, the applicant has 30 days to file an appeal with OHA. Key eligibility requirements: (a) 51%+ unconditional ownership by one or more service-disabled veterans (SDVOSBs) or veterans (VOSBs); (b) the service-disabled veteran must 'unconditionally control' the firm, managing day-to-day operations, holding the highest officer position, and controlling long-term strategic decisions; (c) for SDVOSB, the veteran must have a VA service-connected disability rating (any non-zero rating); (d) the firm must qualify as 'small' under applicable SBA size standards. The SBA Case Management Portal (appeals.sba.gov) is an online filing system for OHA appeals, it is a FILING PORTAL, not a substantive defense-analysis tool. Source: SBA SDVOSB and VOSB Certification — OHA Appeals · 13 CFR Part 128 — SDVOSB/VOSB Program · SBA SDVOSB Certification — SmallGovCon
• The FY2021 NDAA consolidation of SDVOSB/VOSB certification from VA CVE to SBA created a new wave of certification disputes in 2023-2025 as veterans with prior VA CVE certification applied for fresh SBA certification and encountered SBA's documentation standards, which differ in some respects from the prior VA CVE standards. SBA's most common grounds for SDVOSB/VOSB denial: (1) VETERAN CONTROL issues, particularly where the veteran's operating agreement or shareholder agreement contains supermajority voting requirements for 'major business decisions' that effectively give non-veteran partners veto power; SBA's position is that any provision allowing non-veterans to block the veteran's management decisions undermines 'unconditional control'; (2) DOCUMENTATION gaps, particularly for veterans who transferred VA CVE certification to SBA certification without updating documentation to SBA's standards. Government contracting attorneys who specialize in SDVOSB OHA appeals include: Potomac Law Group (potomaclaw.com), Whitcomb Selinsky PC, Smith Pachter McWhorter, and Koprince McCall Pottroff (SmallGovCon's law firm). These firms charge $3,000-$20,000+ for OHA appeal representation. SmallGovCon (smallgovcon.com) publishes extensive informational blog content about SDVOSB OHA appeals, it is NOT a self-serve analysis tool. No self-serve SDVOSB OHA appeal preparation tool was found. Note: SBA HUBZone certification DENIALS are NOT appealable to OHA, OHA jurisdiction for HUBZone covers only competitor PROTESTS of HUBZone status in specific procurement actions, not initial certification denials. SDVOSB/VOSB denials ARE OHA-appealable. Source: OHA Will Hear Your SDVOSB Appeal Now — SmallGovCon · SDVOSB OHA Appeal Solutions — Potomac Law Group · SDVOSB Certification Denial Appeal — Whitcomb Selinsky

When to bring in a professional

Self-serve responses fit routine cases: clear facts, amounts a business can absorb, and a deadline still ahead of you. Bring in a licensed professional when the amount at stake is large relative to their fee, the facts are genuinely disputed, criminal exposure is possible, or the deadline has already passed. A short paid consultation to sanity-check your plan is often worth it even when you handle the filing yourself.

All sources for this guide

1. SBA SDVOSB and VOSB Certification — OHA Appeals
2. 13 CFR Part 128 — SDVOSB/VOSB Program
3. SBA SDVOSB Certification — SmallGovCon
4. OHA Will Hear Your SDVOSB Appeal Now — SmallGovCon
5. SDVOSB OHA Appeal Solutions — Potomac Law Group
6. SDVOSB Certification Denial Appeal — Whitcomb Selinsky