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Wigs Plus, LLC, Files Appeal Against Denial of SDVOSB Certification

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On February 20, 2023, Wigs Plus L.L.C. filed an appeal against the Small Business Administration regarding the denial of their SDVOSB certification application. The SBA had determined that Wigs Plus L.L.C. did not meet the requirement of demonstrating full control by service-disabled veterans. Wigs Plus L.L.C. disputes the SBA's denial decision and sought a reversal from the SBA's Office of Hearings and Appeals.

Appellant's Ownership Structure

Bennie R. Williams, Jr., a service-disabled veteran, holds a 60% ownership stake in Wigs Plus LLC (Appellant), while his wife, Leslie K. Williams, owns the remaining 40%. Leslie K. Williams serves as the CEO and sole manager of the company, as confirmed by Wigs Plus LLC's Articles of Organization and annual report. Appellant also supplied a copy of its current Operating Agreement, which explicitly identifies Bennie R. Williams, Jr. and Leslie K. Williams as the sole members of the company.

In the Operating Agreement, members are granted exclusive management rights, but there are limitations on individual members' authority to enter into contracts or obligations. These actions can only be carried out by the Managing Member or a corporate officer. In this case, the designated Managing Member is Bennie R. Williams, Jr.

The Operating Agreement stipulates the presence of three officers: President, Secretary, and Treasurer. Through the voting process, Bennie R. Williams, Jr. was elected to serve as both President and Treasurer, while Leslie K. Williams was elected as Secretary. In a letter, Bennie R. Williams, Jr. explicitly stated that he delegated authority to Leslie K. Williams for the day-to-day operations of Wigs Plus LLC. 

Denial, Appeal and Analysis

The Small Business Administration denied Wigs Plus LLC's application for SDVOSB certification on the grounds that they were unable to ascertain whether a service-disabled veteran held the highest officer position within the company. Furthermore, concerns were raised regarding the extent of control exercised by Bennie R. Williams, Jr. over the company's decision-making.

During the appeal process, the Appellant made two key arguments.

First, they argued that the "CEO" title used by Leslie K. Williams in the annual report is inconsequential as she relinquished this position following an organizational meeting held on February 3, 2023. However, the Appellant failed to provide any evidence supporting this claim or demonstrate that she had been removed from her role as CEO. The minutes of the meeting did not mention her removal, undermining the validity of this argument.

Secondly, the Appellant argued that comments made by Bennie R. Williams, Jr. in a letter were taken out of context by the SBA. However, the SBA considered Mr. Williams's explicit statement acknowledging that he had delegated authority to oversee the day-to-day operations of the Appellant to his wife. This acknowledgment implies that Mrs. Williams had a significant level of control and involvement in the organization, regardless of her formal title. Therefore, the OHA contends that the Director of Government Contracting was justified in giving weight to the literal text of Mr. Williams's statement.

Ultimately, the Office of Hearings and Appeals found that Wigs Plus LLC fell short of meeting the burden of proof required to establish their status as a VOSB or SDVOSB, citing the contradictory information provided by Wigs Plus LLC during the application process as a significant factor. Consequently, the appeal was denied.


Looking to start or get help with your Service Disabled Veteran-Owned Small Business? Visit our dedicated page on SDVOSB SBA Verification for more information or to request your free consultation.

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