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SBA says Ross contractor not vet-owned

| Wednesday, Oct. 23, 2013, 12:30 p.m.

A Ross contractor plans to fight a Small Business Administration ruling that his firm does not deserve the “service-disabled veteran-owned” label that won it a $1.5 million Air Force contract, he said on Wednesday.

Jason Harris disputes the SBA's claim that Battalion LLC is controlled by Harris' former employer, Ernie Sota, who owns Sota Construction LLC and 49 percent of Battalion. Harris owns 51 percent of Battalion, according to documents he filed with the government.

“I'm confident in the way I have the company structured, based on the fact that I've already achieved certification” as a business owned by a disabled veteran, Harris said.

Said Sota, “Documents will show that I'm not in control of the business by virtue of the fact that I'm a minority investor. Unlike in Congress, majority still rules.”

Sota, speaking “as a taxpayer,” said the bid protest “is clearly the result of a disgruntled bidder” who could not match Battalion's bid.

The Department of Veterans Affairs certified Battalion in March as eligible for the Service-Disabled Veteran-Owned Small Business program, which gives such companies an edge in winning contracts.

Battalion won an Air Force contract on Aug. 26 to replace exterior finishes and windows on two buildings at the 911th Airlift Wing in Coraopolis. A losing bidder, the Connecticut firm Douglas P. Fleming LLC, filed a complaint accusing Battalion of being a front for Sota Construction in Bellevue.

The SBA agreed in a decision issued on Tuesday. It ordered Harris to remove the designation from his government registration and bars him from applying for federal contracts as such a business.

Sota Construction employed Harris five months ago, the SBA said. A Sota company owns the building that Battalion lists as its headquarters. Battalion's address is a two-story office, where a placard beside the door in September listed One 80 Real Estate Services as occupant. One 80's registered address is Sota Construction's address in Bellevue, according to state records.

Sota Construction provided “critical financial support” to Battalion and was its only funding source the SBA said it could find. Sota put up the bid bonding for the 911th project, the SBA said.

“This information has led me to conclude that Mr. Sota, and not you, controls Battalion,” the SBA told Harris.

Harris said he stopped working for Sota when he started Battalion in 2012 and that Sota is “simply a passive investor.” Sota, whose construction company touts more than 30 commercial and residential projects on its website, helped Harris start his business, he said.

“In no way whatsoever does Ernie Sota control Battalion,” Harris said. Sota “gave me an opportunity to start my own business, to fulfill my dream. ... Ernie makes zero decisions in the company.”

Battalion lists two employees in documents filed with the government, but the SBA found no evidence the company paid anyone, including Harris.

“Your resume shows that you formed Battalion in 2012, but the W-2s submitted do not evidence you being an employee of Battalion. In fact, your W-2s were issued by (Sota Construction),” the SBA said in an email to Harris explaining its decision. “You claim to be Battalion's managing member, and in charge of all decisions of the firm, while not being employed by the company.”

Harris said his W-2 showed no income from Battalion because this was to be Battalion's first project. He said he has no equipment or employees, but has a commitment from someone to become site superintendent on the 911th project. No subcontracts on the project will go to Sota Construction, he said.

Harris has until Nov. 5 to appeal. The Air Force contract is on hold.

Mike Wereschagin is a staff writer for Trib Total Media. He can be reached at 412-320-7900 or mwereschagin@tribweb.com.

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