PilieroMazza obtained a favorable size protest decision on behalf of an intervenor after it's appeal against Condor Reliability Services (Condor).  The intervenor challenged Condor’s size status primarily based on a familial identity of interest between Condor’s owner and the owner of another company, Alpa Technology and Services (Alpa).  The Small Business Administration (SBA) Area Office agreed that Condor and Alpa were affiliated and thus Condor was found to be ineligible for the procurement. 

Condor appealed the Area Office’s decision to the SBA’s Office of Hearings and Appeals (OHA) and argued that the Area Office relied on irrelevant facts in making its determination. Namely, Condor asserted that the respective owners of Condor and Alpa own only a minority interest in the other’s company, which means that neither has the ability to control the other’s company.  Condor also argued that a familial relationship cannot form the basis of affiliation on its own.  Finally, Condor claimed that the SBA was prevented from finding affiliation between Condor and Alpa because the SBA did not previously question the relationship when it approved Alpa’s 8(a) application. 

OHA’s ruling agreed with PilieroMazza’s responsive pleading and confirmed existing precedent regarding affiliation between family members.  This precedent holds that when there is a familial identity of interest, a clear fracture must be shown to rebut the presumption of affiliation.  In this case, OHA rejected Condor’s argument that affiliation between Condor and Alpa did not exist since the respective owners only held a minority interest in the other’s company.  OHA made clear that when family members are involved, the issue is not whether each family member has the ability to control the other’s company but whether there is a clear fracture between the two; even a minority ownership interest in the other’s company is a sign that sufficient fracture is lacking.  OHA also found that a familial relationship alone can form the basis of affiliation when there is no mentor/protégé relationship between the two family members’ companies.  And lastly, OHA rejected Condor’s assertion that the SBA was estopped from enforcing its size regulations because of the SBA’s previous handling of Alpa’s 8(a) application.  According to OHA, for such an argument to be successful, Condor must demonstrate that the SBA committed affirmative misconduct and there was no such allegation, let alone determination, in this case.