Hiring a veteran CEO for set-aside contracts: Not going to work

"I’ll buy a company, bring in a service-disabled veteran as the majority owner on paper, and we’ll crush the set-aside market.” It sounds clever. It’s not. It’s illegal, and SBA will shut it down fast. I very often run into searchers, investors, or independent sponsors that find a gov con business with veteran set-asides and want to buy the business, then hire a veteran to keep the contracts, all while keeping themselves as majority owner. It's just not going to work. Here’s why: -13 CFR §###-###-#### –###-###-#### says the veteran must unconditionally own at least 51%, control day-to-day operations, and hold the top officer role full-time. If you keep veto power or run the show yourself, you’re out. Case precedent: - Miles Construction (2013) – minority protections can’t gut “unconditional” ownership. - Precise Management, Inc. (SBA OHA 2024) – 51% veteran ownership still failed because of “negative control” clauses. There is no “figurehead” loophole. The veteran must actually own it, run it, and control it. Period. Want to play in the SDVOSB space as a non-veteran? Your real options: - A true 51/49 partnership where the veteran is in charge - A compliant joint venture - Mentor-Protégé JV under SBA rules - Teaming/subcontracting with a certified SDVOSB Bottom line: You can get creative with structure — but you can’t fake control.