SIZE APPEAL OF: CLARITY COMMUNICATIONS GROUP, LLC. APPELLANT

*1 On April 8, 2019, the U.S. Small Business Administration (SBA) Office of Government Contracting — Area III (Area Office) issued Size Determination Nos. 3-2019-044, 045, 046, 047, 048, and 049 (Size Determinations), concluding that Clarity Communications Group, LLC (Appellant) is not eligible for award of the subject procurements. Appellant failed to provide the Area Office with requested information regarding a potential affiliate and so the Area Office applied an adverse inference against Appellant. Appellant maintains that the size determination is clearly erroneous, and requests that SBA's Office of Hearings and Appeals (OHA) reverse. For the reasons discussed infra, the appeal is denied, and the size determination is affirmed.

*1 OHA decides size determination appeals under the Small Business Act of 1958, 15 U.S.C. 1 et seq., and 13 C.F.R. parts 121 and 134. Appellant filed the appeal within fifteen days of receiving the size determination, so the appeal is timely. 13 C.F.R. § 134.304(a). Accordingly, this matter is properly before OHA for decision.

*1 On January 22, 2019, Defense Information Systems Agency (DISA), Defense Information Technology Contracting Office (DITCO), Scott Air Force Base issued Solicitation Nos. HC101319QA328 and HC101319QA329 for telecommunications equipment. More specifically, the contractor will install and maintain 10 Gigabit Ethernet/Fiber cable for the purposes of computer services. (Size Determination at 1.) The difference between the two subject procurements was location. HC101319QA328 was for cables between the Letter Kenny Army Depot in Chambersburg, PA to John Kingman Road in Ft. Belvoir, VA. (Id.) HC101319QA329 was for cables between the Letter Kenny Army Depot in Chambersburg, PA to Carlisle Pike in Mechanicsburg, PA. (Id.)

*1 The Contracting Officer (CO) set aside the procurements entirely for small businesses and assigned North American Industrial Classification System (NAICS) codes 517311, Wired Telecommunications Carriers and 517911 Telecommunications Resellers, both with a corresponding 1,500 employee size standard. (Id.) On September 28, 2018, the CO selected Appellant for award of solicitations Nos. HC101319QA328 and HC101319QA329. (Id.)

*2 On March 6, 2019, the CO transmitted to the Area Office the size protests which he had received regarding the two solicitations. (Email from K. Knowles (CO) to I. Bascumbe, March 6, 2019.) Three different firms filed size protests regarding the two solicitation; Carrollwoods, Inc. dba Carroll Communications (Carroll), One Voice Government Solutions, LLC (One Voice), and Veteran Communications Group, Inc. (Veteran). (Size Determination at 1.) They alleged that Appellant is not a small business due to its affiliation with Segra Communications, which in turn is majority owned by EQT Partners. (Id.)

*2 Carroll's protest was delivered to the CO on March 1, 2019. In its protest, Carroll alleged that Appellant is a wholly owned subsidiary of Segra Communications, itself majority owned by EQT Partners, a private equity company. (Carroll Protest at 1.) Carroll argued that SBA rules require companies holding a DISA BOA that are majority-owned by private equity companies should count all employees in all companies that the private equity company owns in their size count. (Id.) In this case, since Appellant is owned by a private equity company, it would no longer be under the 1,500-employee size limit. (Id.)

*2 One Voice's protest was delivered to the CO on March 1, 2019. (One Voice Protest at 2.) It contains the same allegations that Carroll's protest laid out regarding Appellant's ownership by a private equity company. (Id.) Veteran's protest was also delivered on March 1, 2019 and contains the same allegations. (Veteran Protest at 1.)

*2 The Area Office informed Appellant of the protests on March 8, 2019. It requested the following documents:

*2 (Protest Notice at 5.)

*2 On March 18, 2019, in response to the allegations in these protests, Appellant submitted its SBA Form 355 and other supporting documents. (Response at 1.) In the response, Appellant reiterates that it is in fact a small business that meets the size standard of 1,500 employees. (Id.) Appellant proceeded to describe its history and the nature of its ownership changes. (Id. at 1-2.) Appellant was founded in 1998 and entered the federal marketplace in 2006. (Id. at 1.) It became an “indirect subsidiary” of Lumos Networks Corp. (Lumos Networks) on January 4, 2017. (Id.) Later in 2017, private infrastructure fund EQT Infrastructure III acquired Lumos Networks through its investment vehicles MTN Infrastructure Sidecar 1 SCSp and MTN Infrastructure Sidecar 2 SCSp. (Id. at 2.) EQT Infrastructure III is managed by [REDACTED]. (Id.) In April 2018, Spirit Communications was also acquired by EQT Infrastructure III. (Id.) Appellant claims that while EQT Infrastructure III is “advised and managed by certain members of the EQT group, the ultimate owners/beneficiaries are the investors in EQT Infrastructure III.” (Id.) [REDACTED] (Id.) The exact corporate structure was attached in the Organization Charts. (Id., Organization Charts.)

*3 Appellant claims that no EQT entity is involved in the day-to-day operations or management of Lumos Networks or Appellant. (Id. at 2.) Instead, the Board of Directors of MTN Infrastructure TopCo, Inc. (MTN TopCo), the parent company of Lumos Networks and Spirit Communications, provides active oversight and makes decisions regarding Lumos and its indirect subsidiary, the Appellant. (Id.) The MTN TopCo companies adopted the brand name “Segra” in 2019. (Id.)

*3 Appellant argues that there is no reason to count employees employed by EQT entities located above MTN TopCo in the organization chart when performing a size determination. (Id.) Appellant claims that this is because entities above MTN TopCo have no meaningful control over Appellant. (Id.) The total number of employees for MTN TopCo and its subsidiaries is [REDACTED], below the 1,500 size standard. (Id.) In the alternative, Appellant argued that counting all EQT entities in the size determination would provide an employee count of under 1,500. (Id. at 2-3.) This would also be below the 1,500 size standard. (Id. at 3.)

*3 In the response package, Appellant included many exhibits and forms, including SBA Form 355, ownership information, names and information on officers and directors of appellant, an organizational chart, and various financial records.

*3 On March 27, 2019, the Area Office contacted Appellant to request further information, to be submitted by March 28, 2019. (Email, I. Bascumbe to M. McDermott, March 27, 2019.) Specifically, the Area Office requested details into the parties with ownership interest of Lumos Networks and information on the board of directors and officers. (Id.) The Area Office also requested the same information on MTN TopCo and EQT Infrastructure, along with total employees and ownership family information. (Id.) The Area Office further explained that this information was necessary for the size determination because under 13 C.F.R. § 121.103(c)(3), when voting stock is widely held with no single block of stock considered large compared to other holders, the company's Board of Directors and CEO or President are deemed to have power to control. (Id.) As such, the Area Office required the information to complete the ownership and control analysis. (Id.)

*3 On March 28, 2019, Appellant responded to the Area Office's request for more information. (March 28 Response.) In the response, Appellant provides the details on the number of employees, officers, members of the boards of directors, and ownership on seven different entities on the Organization Chart up until EQT Holdings Cooperatief, W.A. (Id.) Appellant reiterated its position that no control or decision-making regarding Clarity occurred above MTN TopCo. (Id.) Those positioned above MTN TopCo were passive investors had no influence on the manner in which Appellant conducted business. (Id.) In providing details for EQT Holdings Cooperatief, W.A., Appellant claimed that it was not a corporation, but a Dutch cooperative association of its member investors. (Id.) Appellant provided the employee count for EQT Holdings Cooperatief, W.A. as [REDACTED], and gave a list of the [REDACTED] voting member investors, each with a [REDACTED] voting share. (Id.)

*4 The Area Office additionally requested information on all entities the following individuals have ownership interest in, are officers of, or are board directors of, along with the total employee count for those entities and people related to the individuals:

*4 Finally, the Area Office asked whether Appellant's count of [REDACTED] employees included EQT AB's [REDACTED] employees. (Id.) The Area Office asked Appellant to provide the requested information by April 1, 2019. (Id.)

*4 Appellant submitted a response on April 1, 2019. (April 1 Response.) In the response, Appellant reiterated its position that MTN TopCo was the entity which held the actual control and decision-making powers for Appellant. (Id.) Appellant declined to provide further information on EQT Cooperatief and its members. (Id.)

*4 On April 8, 2019, the Area Office issued Size Determination Nos. 3-2019-044, 045, 046, 047, 048, and 049, concluding that Appellant is other than small because of its affiliation with the other firms in the EQT Cooperatief structure, and is thus is ineligible for the subject procurement. (Size Determination at 6.)

*4 The Area Office first considered affiliation based on stock ownership. An entity that owns, or has the power to control, 50% or more of a concern's voting stock, or a block of voting stock which is large compared to other outstanding blocks of voting stock, controls or has the power to control the concern. (Id. at 3, citing 13 C.F.R. § 121.103(c)(2).)

*4 The Area Office then found that Appellant is wholly owned by Lumos Networks Acquisitions, LLC, which is owned by Lumos Networks Corporation (Lumos Networks). Lumos Networks is in turn wholly owned by MTN Infrastructure TopCo, LP., which is wholly owned through holding companies by [HOLDING COMPANY NAME REDACTED], which is owned through two holding companies owned by [HOLDING COMPANY NAME REDACTED], which is majority owned and controlled by EQT Holdings Cooperatief W.A. and minority owned by Investor AB.² (Size Determination at 3.) The Area Office further found that the following [[REDACTED] entities each own [AN EQUAL SHARE] of the EQT Holdings Cooperatief W.A.:

*5 According to the Area Office, because the above entities each own [REDACTED] and the minority holdings are equal, the Area Office presumed that each entity controls or has the power to control EQT Holdings Cooperatief W.A. (Id. at 4, citing 13 C.F.R. § 121.103(c)(2).)

*5 The Area Office further found that because each of the investors in EQT Holdings Cooperatief W.A. has the power to control the concern and EQT Holdings Cooperatief W.A. has a controlling ownership in Lumos Network Acquisitions, LLC, Lumos Networks Corp., MTN Infrastructure TopCo, Inc., MTN Infrastructure TopCo, LP, EQT Infrastructure III (GP) SCS, EQT AB, and [REDACTED], these firms and their subsidiaries are all affiliated with Appellant. (Size Determination at 4, citing 13 C.F.R. §§ 121.103(c)(1), 103(c)(2).)

*5 The Area Office then noted Appellant had failed to provide the names of the entities and ownership interest for each member of EQT Holdings Cooperatief W.A., the total number of employees for the affiliated entities and/or subsidiaries owned by each member, and information on the officers and boards and ownership interest in other entities and any officer or board positions in other entities not already disclosed. As a result of Appellant's failure to disclose, the Area Office drew an adverse inference against Appellant about the ownership interests of the members of EQT Holdings Cooperatief W.A. and the officers and Board of Directors of EQT Holdings Cooperatief W.A. to find Appellant other than small. (Size Determination at 4-5.) Appellant failed to provide the requested information, and so the Area Office assumed that the information would be adverse. (Id.)

*5 The Area Office dismissed Appellant's argument that Appellant's Board of Directors had power to control Appellant, and that the power did not exist above MTN TopCo. (Id. at 4-5.) Concerns and entities are affiliates of each other when one has the power to control the other, it does not matter whether the control is exercised, so long as the power to control exists. (Id., citing 13 C.F.R. § 121.103(a)(1).) The Area Office further found that EQT Holdings Cooperatief W.A. is not a publicly traded entity and the stock is equally held by 16 members and it is therefore not a widely held corporation. (Size Determination at 5, citing Size Appeal of W&T Travel Services, LLC, SBA No. SIZ-5721 (2016.).)

*5 The Area Office relied on 13 C.F.R. § 121.1008(d) in its application of adverse inference, which states that:

*6 (Id. at 5-6; 13 C.F.R. § 121.1008(d).) The Area Office went on to apply the three-part test on adverse inference determinations. An adverse inference determination requires that: (1) the requested information be relevant to an issue in the size determination; (2) there be a level of connection between the protested concern and the firm from which the information was requested; and (3) the request for information be specific. (Size Determination at 5, citing Size Appeal of USA Jet Airlines, Inc. SBA No. SIZ-4919, at 13 (2008).) The Area Office found that:

*6 The Area Office found Appellant affiliated with Lumos Network Acquisitions, LLC, Lumos Networks Corp., MTN Infrastructure TopCo, Inc., MTN Infrastructure TopCo, LP, EQT Infrastructure III (GP) SCS, EQT AB, and [REDACTED], and EQT Holdings Cooperatief W.A. The Area Office stated that the number of employees for all of Appellant's affiliates could not be determined because Appellant did not supply the information requested. (Id. at 6.) Therefore, the Area Office drew an adverse inference and presumed the information would demonstrate Appellant was not a small business concern, and thus determined that Appellant was not a small business. (Id.)

*6 On April 23, 2019, Appellant filed the instant appeal, arguing that the Area Office erred in making its decision. (Appeal at 1.) More specifically, Appellant claims that the Area Office ignored that control and management of Appellant rested with MTN Infrastructure TopCo, Inc. (MTN TopCo), that the Area Office's inquiry into the “passive investors” such as EQT Holdings Cooperatief W.A. (EQT Cooperatief) were not relevant to the issue of control and went beyond the scope of the SBA's rules, and that the Area Office improperly drew the adverse inference. (Id., at 1-2.)

*7 Appellant argues the Area Office's decision to ignore Appellant's insistence that MTN TopCo was the controlling entity of Appellant lost “sight of the guiding principles underlying the SBA size determination analysis set forth in 13 C.F.R. § 121.103(a).” (Id. at 6.) Appellant also argues that the Size Determination stretched 13 C.F.R. § 121.103(c)(2) “far beyond the ambit of its intended purpose.” (Id.) Appellant argues that this proves the Size Determination is based upon clear errors of fact and law, and thus should be reversed. (Id.) The three “guiding principles” that Appellant points to are 1) the SBA should focus on the entity that actually exercises control over the contested firm, 2) the SBA should consider factors such as management to determine the existence of affiliation, and 3) the SBA should look at the totality of circumstances when determining affiliation. (Id. at 6-7, citing 13 C.F.R. § 121.103(a)(1), (2) & (5).)

*7 For the first factor, control, Appellant argues that the Area Office should have limited its inquiry into MTN TopCo because it is the only entity that exercises management and control over Appellant. (Appeal at 7.) Appellant claims that no EQT entity has control over Appellant. (Id.)

*7 For the second factor, Appellant argues that the Area Office was required to consider not merely ownership, but other factors such as management, previous ties to other concerns, and contractual relationships, in determining whether affiliation exists. (Id. at 8.) Appellant argues that the Area Office failed to consider management, previous relationships, and contractual relationships. (Id.) Appellant argues that there are no “previous relations” or “ties” or management power between EQT entities and Appellant. (Id.) Therefore, the Area Office should not have considered entities above MTN TopCo to be affiliates with Appellant. (Id.)

*7 For the third factor, Appellant argues SBA is required to consider the totality of the circumstances. Appellant maintains the concept prohibits the Area Office from engaging in a “formalistic analysis” of affiliation by only inquiring into a concern's ownership. (Id. at 9.) Appellant argues that the reality of the corporate structure is that EQT Cooperatief has never exercised a power to control Appellant, and the hypothetical control it may have is irrelevant. (Id.) Appellant claims that by relying on only ownership to determine affiliation, Appellant is not considering the totality of circumstances. (Id. at 10.)

*8 Appellant argues that it has successfully shown that EQT Cooperatief had no power to control Appellant. (Id. at 10-11, citing 13 C.F.R. § 121.103(c)(2).) Appellant argues that the Area Office should not have investigated the individual owners of EQT Cooperatief because they do not exert control over Appellant. (Appeal at 11.) Appellant argues that control under the multiple minority shareholder rule (13 C.F.R. § 121.103(c)(2)) may be rebutted, and it has done so by demonstrating that control stops with MTN Top Co. (Id.)

*8 Appellant further argues that under 13 C.F.R. §§ 121.105 and 121.103(c)(2), the Area Office could not inquire into EQT Cooperatief. (Id. at 12.) Appellant argues that the stock control analysis rule is limited to “the concern whose size is at issue” and that Appellant, not EQT Cooperatief was that concern. (Id.) Appellant argues that when an SBA regulation mentions “concern,” it does not include the concern's affiliates unless the regulation explicitly includes a concern's affiliates. (Id. at 13, citing Size Appeal of Digital Management, Inc., SBA No. SIZ-5709 (2016) at 14.) Therefore, the Area Office's use of 13 C.F.R. § 121.103(c)(2) should not have been applied to EQT Cooperatief to impute ownership control of the investor-entities onto EQT Cooperatief. (Id.)

*8 Appellant goes on to highlight that the Committee on Foreign Investment in the United States (CFIUS) found that control of Appellant did not rise above EQT AB, which is below EQT Cooperatief. (Id. at 14.) Appellant argues that this shows the Size Determination contradicts the CFIUS decision.

*8 Finally, Appellant argues that the Area Office was incorrect to draw an adverse inference against it. (Id. at 16-17.) Appellant argues that the information sought (information on the investor-entities of EQT Cooperatief) was not relevant to the size determination because EQT Cooperatief did not exercise control over Appellant. (Id.) Thus, the Area Office's drawing of the adverse inference fails the three part test because the information it sought was not relevant to the size determination. (Id.)

*8 Appellant has the burden of proving, by a preponderance of the evidence, all elements of the appeal. Specifically, Appellant must prove that the size determination is based upon a clear error of fact or law. 13 C.F.R. § 134.314. OHA will disturb an area office's size determination only if, after reviewing the record, the administrative judge has a definite and firm conviction that the area office erred in making its key findings of fact or law. (Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-4775, at 11 (2006).)

*9 Appellant argues that it was incorrect for the Area Office to include entities above MTN TopCo in the Size Determination investigation. Appellant claims that this is because control and management over Appellant ends at MTN TopCo, and that entities such as EQT Cooperatief and its own investor-entities do not exercise control and management over MTN TopCo. As such, Appellant argues that entities above MTN TopCo should not be considered affiliates.

*9 Appellant's argument misunderstands SBA's regulations regarding affiliation. The following two regulations are controlling here:

*9 (13 C.F.R. § 103(a)(1), emphasis supplied.)

*9 (13 C.F.R. § 103(c)(1).)

*9 Appellant argues that there are no other relationships or ties between Appellant and entities above MTN TopCo. However, ownership is a clear relationship and tie. There is a clear chain of ownership from Appellant up through EQT Cooperatief. Thus, all the intermediate entities and EQT Cooperatief are affiliates of Appellant through an application of 13 C.F.R. §§ 121.103(a)(1) and 121.03(c)(1). Appellant misunderstands the regulation. One concern's ownership of another is, by itself, sufficient grounds to find the concerns affiliated. Size Appeal of Vocare Services, Inc., SBA No. SIZ-5266, at 6 (2011). In promulgating the rule, SBA expressly rejected the idea that majority ownership should result only in a presumption of affiliation which can be rebutted by specific facts in a particular case, and instead adopted a bright line rule that any entity owning 50% or more of a concern is deemed to control it. Id., citing 61 Fed. Reg. 3,280, 3,281 (Jan. 31, 1996). Affiliation is based upon control, or the power to control, whether that power is exercised or not. Size Appeal of Perry Johnson & Assoc., Inc., SBA No. SIZ-5943 (2018). As Appellant's ultimate owner, EQT Cooperatief has the power to control Appellant. While EQT Cooperatief does not exercise that power, on the basis of the record here, that is merely EQT Cooperatief's choice. There is nothing to prevent EQT Cooperatief from taking control of Appellant, should it be deemed advisable. Appellant can point to no precedent which supports the argument that a concern is not affiliated with another concern which owns it.

*10 Appellant's argument that control is actually exercised only by MTN TopCo is irrelevant, because the regulation states that so long as the power to control exists, the entities are affiliated. 13 C.F.R. § 103(a)(1); see also Size Determination of Potomac River Group, LLC SBA No. SIZ-5689 (2015) at 5 (finding that a passive investor with power to control is still affiliated because it had the power to control).

*10 Appellant's reliance on 13 C.F.R. § 121.103(a)(2) is misplaced. While SBA considers factors such as ownership, management, and contractual relationships in making affiliation findings, any one of those factors may be decisive in determining affiliation. The factors mentioned in § 121.103(a)(2) do not modify each other. The regulation states that the “SBA considers factors such as ownership, management, previous relationships with or ties to another concern, and contractual relationships.” 13 C.F.R. § 121.103(a)(2). The use of the phrasing “considers” and “such as,” in addition to the regulation's placement within a list, demonstrate that this list of factors does not require the SBA to find each such factor in order to show affiliation. Rather, the regulation itemizes a number of the various independent grounds for finding affiliation. Affiliation may be based upon a finding of ownership alone (13 C.F.R. § 121.103(c); Size Appeal of Industria Lechera de Puerto Rico, Inc., SBA No. SIZ-5533 (2014)), upon common management alone (13 C.F.R. § 121.103(e); Size Appeal of ZLynx Enterprises, Inc., SBA No. SIZ-6010 (2019))) or identity of interest due to contractual relationships alone (13 C.F.R. § 121.103(f); Size Appeal of Heritage of America, LLC, SBA No. SIZ-5017 (2008).

*10 Appellant's reliance on 13 C.F.R. § 121.103(a)(5) is also misplaced. A finding of affiliation is based upon the totality of the circumstances when no one factor is sufficient to support a finding of affiliation. It does not modify any finding of affiliation on other grounds. Rather, it is relied upon when, while there is no one factor which supports a finding of affiliation, the circumstances are so suggestive of affiliation as to support a finding based upon the totality of the circumstances. Size Appeal of National Security Assoc., Inc., SBA No. SIZ-5097 (2018). The regulation does not restrict the SBA from finding affiliation based on a single factor.

*11 Under 13 C.F.R. § 121.103(c)(2), because all the shareholders of EQT Cooperatief have minority holdings which are equal or approximately equal in size, each one of them is presumed to control or have the power to control the concern. Appellant's argument that the regulation is inapplicable here because it has rebutted the presumption is not supported by the record. Appellant's arguments went to EQT Cooperatief's lack of control over Appellant, when EQT Cooperatief clearly had the power to do so through its ownership, it merely chose not to exercise it. Appellant made no showing that the shareholders of EQT Cooperatief did not control it, which is the rebuttal required by the regulation. Appellant's argument that § 121.103(c)(2) does not control here is meritless.

*11 Appellant further argues that the SBA regulation, in addition to Digital Management, SBA No. SIZ-5709, prohibits the Area Office from inquiring into EQT Cooperatief under 13 C.F.R. § 121.103(c)(2) because EQT Cooperatief is an affiliate rather than the concern at issue. This is a misapplication of the holding in Digital Management. In Digital Management, the issue was whether the Appellant's affiliate's actions triggered recertification under 13 C.F.R. § 121.404(g). Digital Management at 14. Digital Management held that 13 C.F.R. § 121.103(a)(1), setting the general principle for finding affiliation, included affiliates in definition of concern. Id. In the instant Size Determination investigation, however, the issue was whether EQT Cooperatief's investor-entities had ownership or control over other entities that could be affiliated with Appellant. OHA has affirmed Area Office findings that show the application of 13 C.F.R. § 121.103(c)(2) on affiliated firms. Size Appeal of Vocare Servs., Inc., SBA No. SIZ-5266, at 6 (2011).

*11 Appellant's claim that the CFIUS finding contradicts with a finding of affiliation is irrelevant, because CFIUS findings are not binding precedent at OHA. Even if it were, size determinations for size standards based on number of employees are made regarding the state of the concern for the previous 12 calendar months, while the CFIUS finding was made in 2017. See 13 C.F.R. § 121.106(b).

*11 On the issue of adverse inference, the question is whether the Area Office correctly applied the three-part test for adverse inference determinations. The test requires that (1) the requested information be relevant to an issue in the size determination; (2) there be a level of connection between the protested concern and the firm from which the information was requested; and (3) the request for information be specific. Size Appeal of Forterra Systems, Inc., SBA No. SIZ-5029, at 9 (2009). If all three prongs of the test are met, the challenged business must submit the information to the area office or suffer an adverse inference that the information would show that the challenged business was other than small. 13 C.F.R. § 121.1008(d).

*12 In the instant appeal, Appellant argues that the Area Office incorrectly applied the first prong of the three-part test. Appellant claims the requested information was irrelevant to determining Appellant's size. However, “it is settled that it is the Area Office's role to determine what is relevant to a size determination, and not the challenged firm's; otherwise, firms could submit only information favorable to themselves.” Size Appeal of Kadix Systems, LLC, SBA SIZ-5016 at 16 (2008), citing Size Appeal of Continuant, Inc., SBA No. SIZ-4839, at 3 (2007). The Area Office considered Appellant's argument that the requested information on EQT Cooperatief's owners was not relevant due to a lack of affiliation but decided that the information was relevant to the size determination. Appellant was obligated to timely produce the information the Area Office requested or suffer the consequences of an adverse inference.

*12 Further, Appellant's argument that EQT Cooperatief is not an affiliate of Appellant is meritless, as described above. This is due to an application of 13 C.F.R. §§ 121.103(a)(1) and 103(c)(1), in which the successive ownership of Appellant through intermediary firms is demonstrated to extend to EQT Cooperatief. Thus, information requested on the ownership interests of EQT Cooperatief's investor-entities was relevant.

*12 Under OHA's three-part test on adverse inference determinations, the Area Office's adverse inference determination was proper. First, the SBA requested information that was relevant to the issue of Appellant's size, because it requested information regarding owners of EQT Cooperatief, an affiliate and owner of Appellant. Second, there was a connection between the protested concern and the firm from which the information was requested, as these were connected by a string of intermediate firms, all tied by ownership interests. Third and finally, the request for information was specific because the Area Office specifically named documents and evidence that would help it determine the size of Appellant, such as the employees of the entities and what other firms those entities owned. It is the challenged firm which bears the burden of establishing that it is small. 13 C.F.R. § 121.1009(c). By declining to submit the requested information, Appellant failed to meet that burden. (See Size Appeal of Continuant, Inc., SBA No. SIZ-4839, at 4 (2007).) As a result, the Area Office's decision to draw an adverse inference was not in error.

*13 Appellant has not shown clear error in the size determination. The appeal therefore is DENIED, and the size determination is AFFIRMED. This is the final decision of the Small Business Administration. 13 C.F.R. § 134.316(d).