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SIZE APPEAL OF: PIASECKI AIRCRAFT CORP., APPELLANT RE: AURORA FLIGHT SCIENCES CORP.

SBA No. SIZ-5816, 20172017 WL 953492March 1, 2017

SBA No. SIZ-5816, 2017 (S.B.A.), 2017 WL 953492
Small Business Administration (S.B.A.)
Office of Hearings and Appeals
[Size Appeal]
*1 SIZE APPEAL OF: PIASECKI AIRCRAFT CORP., APPELLANT
*1 RE: AURORA FLIGHT SCIENCES CORP.
*1 SBA No. SIZ-5816
*1 Appealed from Size Determination No. 02-2016-106
*1 March 1, 2017
 
ORDER REMANDING PROCEEDING1
 
*1 On January 25, 2017, the U.S. Small Business Administration (SBA) Office of Government Contracting, Area II (Area Office) issued Size Determination No. 02-2016-106, finding Aurora Flight Sciences Corp. (Aurora) is an eligible small business for the Small Business Innovation Research (SBIR) award at issue.
*1 On February 9, 2017, Piasecki Aircraft Corp (Appellant) filed the instant appeal. Appellant, who had protested Aurora's size, contends the size determination is clearly erroneous, and requests that SBA's Office of Hearings and Appeals (OHA) reverse the size determination and find Aurora not an eligible small business for the SBIR award.
*1 The basis of this appeal is Appellant's assertion the Area Office ignored Appellant's argument that outside investors had negative control over Aurora. Appellant argues that negative control is not speculation, and that OHA has found negative control when shareholders and investors have had the power to block actions by a concern's officers or Board of Directors.
*1 As relief, Appellant requests OHA vacate the size determination and rule that Aurora is other than small.
*1 On February 27, 2017, after reviewing the Area Office file under the terms of a protective order, Appellant filed a motion for leave to file a Supplemental Appeal together with the proposed Supplemental Appeal. Appellant maintains the Area Office failed to properly evaluate the record before it, which raised concerns about the relationship between Aurora and its investors. Appellant argues that the record establishes Aurora's investors have negative control over the firm. Appellant argues again OHA should vacate the size determination and either rule that Aurora is other than small, or remand the matter to the Area Office for a new size determination.
*1 Also on February 27th, Aurora filed a response to the appeal. Aurora asserts Appellant's arguments are based on speculation and fiction, not fact, that they ignore the SBA rule excepting licensed small business investment companies from SBA's affiliation rules, and that Appellant has failed to show any investor has negative control over Aurora. Aurora also filed a Motion to Admit New Evidence, together with the evidence.
*1 On February 24, 2017, SBA moved to remand the proceedings to the Area Office. When SBA requests a remand, it is, in effect, confessing error. Size Appeal of Newport Materials, LLC, SBA No. SIZ-5753 (2016). OHA has held that in such cases it is appropriate to permit SBA the opportunity to correct its error or mistake. Id.
*1 Accordingly, I GRANT SBA's Motion, VACATE Size Determination No. 02-2016-106, and REMAND these proceedings to the Area Office for a new size determination. The other motions pending are now moot. The parties may refile with the Area Office the evidence and arguments they have filed with OHA.
*2 Christopher Holleman
*2 Administrative Judge

Footnotes

OHA decides size determination appeals under the Small Business Act of 1958, 15 U.S.C. § 631 et seq., and 13 C.F.R. parts 121 and 134.
SBA No. SIZ-5816, 2017 (S.B.A.), 2017 WL 953492
End of Document