Decision Released: SBA Office of Hearings and Appeals Denies Protest for the VA Program Support Integration (PSI) Functions

SBA No. VSBC-407-P

Background On September 15, 2022, the VA issued Solicitation No. 36C10G22R0005 (the Solicitation) for Program Support Integration (PSI) functions. The Contracting Officer (CO) issued the procurement as a 100% SDVOSB set-aside and designated North American Industry Classification System (NAICS) code 541611 Administrative Management and General Management Consulting Services, with a corresponding $21.5 million annual receipts size standard as the appropriate code. (The Solicitation listed $16.5 million, but the higher figure was the actual code as of that date. It is now $24.5 million.) The VA intends to award one Indefinite Delivery Indefinite Quantity (IDIQ) contract. Initial offers were due October 17, 2022. Final proposal revisions were due August 31, 2023. On February 26, 2024, offerors were notified that GoldPath was the apparent successful offeror.

On March 4, 2024, Protestor filed the instant protest against GoldPath’s SDVOSB status and size status.² Protestor argues GoldPath is not an eligible SDVOSB. GoldPath is a mentor-protégé joint venture between Pathways 2 Solutions, Inc. (Pathways) the protégé and JR Reingold & Associates, Inc. (JRR) the mentor. Protestor alleges the responsible manager for the contrast is a JRR employee. Protestor further alleges GoldPath’s joint venture agreement (JVA) is not in compliance with the applicable SBA regulation. (Protest, at 1-2.)

Protestor notes GoldPath’s SAM.gov registrations list the same address as JRR, 1321 Duke St., Alexandria, VA. Protestor alleges it learned that JRR employees would be program executive and responsible/program manager for the contract. Pathways address is a single-family house in Michigan, and another in an apartment in Tennessee. Protestor further alleges Pathways status as a corporation was listed as “Inactive-Revoked” with the Tennessee Secretary of State from October 11, 2021 to June 15, 2022. Protestor asserts this means Pathways was not an active entity when SBA approved its mentor-protégé agreement with JRR. As such, it had ceased to exist as an entity and was not eligible to be a protégé. Therefore, the mentor-protégé agreement was invalid at the time of approval and the mentor-protégé exception for affiliation does not apply. (Id., at 3-4, citing Size Appeal of Hallmark-Phoenix 8, LLC, SBA No. SIZ-5046 (2009).)

Discussion

An SDVOSB may enter into a joint venture agreement with one or more other small business concerns or its mentor for the purpose of performing an SDVOSB contract. 13 C.F.R. § 128.402(a). “The [joint venture] itself need not be a certified VOSB or SDVOSB” so long as the managing member of the joint venture is certified. 13 CFR § 128.402(a). Pathways is a certified SDVOSB, with an expiration date of August 24, 2026. CF, Exhs. 18, 24, Response to Protest at 4, Jones Declaration at 1.

Protestor argues that GoldPath is not an eligible joint venture, because Pathways, the SDVOSB, was not a valid corporation at the time the SBA approved the Mentor/Protégé agreement. This argument is meritless. Pathways, through a clerical error, was temporarily listed as inactive by the Tennessee Division of Business Services. Pathways corrected the error and was reinstated. Tennessee law provides that once reinstated, the reinstatement relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its business as if the dissolution had never occurred. T.C.A. § 48-24-203. The statute does not stand for the proposition that once a corporation’s charter is revoked that corporation no longer exists and acts by it are invalid. The reinstatement validates the corporation’s existence and privileges from the date of revocation. Loveday v. Cate, 854 S.W.2d 877, 880 (Tenn. App. 1992). As GoldPath argues, Protestors’ reliance upon Size Appeal of Hallmark-Phoenix 8, LLC, SBA No. SIZ-5046 (2009) is misplaced. That case dealt with the issue of whether a concern was a “former affiliate”, it is not applicable here …

Decision

On March 27, 2024, Blue Water Thinking, LLC (Protestor) protested the Service-Disabled Veteran-Owned Small Business (SDVOSB) status of GoldPath Communications JV, LLC (GoldPath), in connection with Department of Veterans Affairs (VA) Solicitation No. 36C10G22R0005. Protestor contends that. For the reasons discussed infra, the protest is DENIED.

Read the decision here.

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