Kai Makani Consulting Denied SDVOSB Status Over Control Issues

Kai Makani Consulting, LLC v. U.S. Small Business Administration involved an SDVOSB certification application that was denied because the company’s operating agreement did not provide sufficient control to its service-disabled veteran owners. Two service-disabled veterans collectively owned 60 percent, but significant decisions required unanimous consent of all members, including non-veterans.

The SBA and OHA concluded that these provisions gave non-veteran members veto power and prevented the veterans from exercising the control required by SBA regulations. The OHA affirmed the denial, underscoring that majority ownership and executive titles alone are not enough when governance documents restrict qualifying veteran control.

Original article:https://www.whitcomblawpc.com/business-law-blog/kai-makani-consulting-denied-sdvosb-status-over-control-issues