Wigs Plus, LLC files an appeal against SDVOSB certification denial Whitcomb Selensky, P.C

Wigs Plus, LLC files an appeal against SDVOSB certification denial  Whitcomb Selensky, P.C

On February 20, 2023, Wigs Plus LLC filed an appeal against the SBA regarding the denial of its SDVOSB certification application. The SBA determined that Wigs Plus LLC did not meet the requirement to demonstrate complete control by service-disabled veterans. Wigs Plus LLC is contesting the SBA denial and is requesting a reversal of the decision from the SBA Office of Hearings and Appeals.

Appellant’s ownership structure

Benny R. Williams, Jr., a service-disabled veteran, owns a 60% ownership interest in Wigs Plus LLC (Appellant), while his wife, Leslie K. Williams, the remaining 40%. Leslie K. Williams is the CEO and sole director of the company, as confirmed by Wigs Plus LLC’s articles of association and annual report. Appellant also provided a copy of its existing operating agreement, which expressly identifies Benny R. Williams, Jr. and Leslie K. Williams as the only two members of the company.

In an operating agreement, members are given exclusive management rights, but there are restrictions on the power of individual members to enter into contracts or commitments. These actions can only be carried out by the managing member or an officer of the company. In this case, the designated managing member is Bennie R. Williams, Jr.

The operating agreement stipulates the presence of three officials: the president, the secretary, and the treasurer. Through a vote, Benny R. Williams, Jr. was elected to serve as President and Treasurer, while Leslie K. Williams was elected to serve as President and Treasurer. Williams is secretary. In a letter, Benny R. Williams Jr. explicitly stated that he had delegated authority to Leslie K. Williams for the day-to-day operations of Wigs Plus LLC.

Denial, appeal, and analysis

The SBA denied Wigs Plus LLC’s application for SDVOSB certification on the grounds that it could not confirm whether a service-disabled veteran held the highest officer position within the company. Furthermore, concerns have been raised about the extent of control exercised by Benny R. Williams Jr. on the company’s decision-making process.

During the appeal process, the appellant made two main arguments.

First, they argued that the title “CEO” used by Leslie K. Williams’s annual report is insignificant because she relinquished that position following an organizational meeting held on February 3, 2023. However, the appellant failed to provide any evidence to support this claim or prove that she was removed from her position as CEO. The minutes of the meeting did not mention her dismissal, which undermines the validity of this argument.

Second, appellant argued that the comments made by Benny R. Williams Jr. in a letter that was taken out of context by the SBA. However, the SBA considered Mr Williams’ frank statement in which he acknowledged that he had delegated authority to oversee the appellant’s day-to-day operations to his wife. This statement indicates that Ms. Williams has a significant level of control and involvement in the organization, regardless of her official title. Thus, the Oregon Health Authority contends that the Director of Government Contracting was justified in giving weight to the verbatim text of Mr. Williams’ statement.

Ultimately, the Office of Hearings and Appeals found that Wigs Plus LLC was unable to meet the burden of proof required to establish its status as a VOSB or SDVOSB, citing contradictory information provided by Wigs Plus LLC during the application process as an important factor. Accordingly, the appeal was dismissed.

(See source.)

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