Court rules against Primary Health Care in SBA size dispute

The U.S. Court of Federal Claims ruled against Primary Health Care, LLC, in a case concerning its eligibility as a small business for federal contracts. The court's decision affects the company’s ability to compete for government contracts designated for small businesses. This ruling is significant as it clarifies the criteria for small business eligibility under federal regulations.

In the case, Primary Health Care, LLC, doing business as Anglin Distinctive Health Care JV, LLC, challenged a decision made by the Small Business Administration (SBA) that deemed it "other than small." The SBA's determination was based on the fact that the joint venture between Primary Health Care and its partner no longer met the requirements for small business status by the time of the final proposal revisions. The case is officially documented as Docket No. 25-1795, filed on May 28, 2026.

Background

The parties involved in this case include Primary Health Care, LLC, and the United States government, represented by the SBA. The dispute arose after the SBA found that Primary Health Care did not qualify as a small business due to the termination of its mentor-protégé agreement with Anglin Consulting Group, Inc. This agreement had originally allowed the joint venture to qualify for small business status.

The case began when the Defense Health Agency issued a solicitation for a small-business set-aside contract on November 15, 2022. Primary Health Care, formed as a joint venture two days after the solicitation was announced, self-certified its eligibility as a small business. However, after the mentor-protégé agreement was terminated on January 30, 2024, the SBA determined that the joint venture no longer qualified as small by the time of the final proposal revisions.

The Ruling

Judge Stephen S. Schwartz presided over the case and ruled in favor of the United States, stating that the SBA's decision was not arbitrary or capricious. The court found that the SBA appropriately determined that Primary Health Care was "other than small" based on the lack of a valid mentor-protégé agreement at the time of final proposal revisions. The opinion noted, "The existence of a valid mentor-protégé agreement continues to matter at least through the date of final proposal revisions."

The court emphasized that the SBA's regulations required that the joint venture must be based on a valid mentor-protégé agreement, which was no longer in effect by the time of the final proposal revisions. As a result, the court denied Primary Health Care's motion for judgment and granted the government's cross-motion.

Impact

This ruling has significant implications for small businesses seeking federal contracts. It reinforces the importance of maintaining valid mentor-protégé agreements throughout the contracting process. The decision clarifies that a business's eligibility as a small entity can be evaluated at multiple points during the procurement process, particularly at the final proposal revision stage.

Going forward, small businesses and their partners must ensure compliance with SBA regulations to maintain their eligibility for federal contracts. The ruling may influence how joint ventures are structured and managed, particularly regarding mentor-protégé relationships.

What's Next

Primary Health Care may consider appealing the decision, but details about any potential appeal were not available in the court filing. There are no related cases pending that directly address this issue at this time.