Identity of Interest Affiliation Explained

Anyone who does business with a small business government contractor will always want to be aware of any potential bases for affiliation that might arise. However, the so-called “identity of interest” affiliation, as described in 13 C.F.R. § 121.103(f), is a particularly easy type of affiliation for a firm to have and not even realize it. It is important to be aware of the way identity of interest affiliation can be found and how to avoid it. Additionally, it is important to note how it can be discovered by the U.S. Small Business Administration (“SBA”): during a size protest or another issue.

There are three general categories of identity of interest affiliation. First, if you own a company, and your close family member owns a company, those two companies could be found affiliated. Second, if you have common investments in multiple companies, those companies could be found affiliated. Third, if your company depends on one other company for a significant portion of your company’s annual revenue, the companies could be found affiliated.

A recent case before SBA’s Office of Hearings and Appeals (“OHA”) illustrates how affiliation can be found based on identity of interest. In Size Appeal of Gregory Landscape Services, Inc., SBA No. SIZ-5793 (2016), Gregory Landscape Services, Inc. (“GLS”) was awarded a contract set aside for women-owned small businesses (“WOSB”) and its size status was protested. The protest alleged that GLS was being used by a large business, NaturChem, Inc. (“NaturChem”), to bid on WOSB set-aside contracts, and that GLS and NaturChem were affiliated because the majority owner of GLS was married to an employee of NaturChem. The protest also noted that the husband of the majority owner of GLS was related to the owner of NaturChem.  READ MORE….