net worth, excluding ownership interest and home equity, is $ 96,157. Plaintiff charges that the SBA abused its discretion in finding that Mr. Sandhu was nevertheless not economically disadvantaged.
Yet plaintiff's argument rests on a flawed interpretation of the applicable regulations. To be sure, the fact that net worth (properly calculated to exclude ownership interest and home equity) is below the threshold amount is a factor in favor of finding economic disadvantage. However, it is only one factor among others. Under 13 C.F.R. § 124.106(a)(2)(i), the SBA may consider not only net worth, but assets, and substantial assets may prove a countervailing factor.
Plaintiff argues, incorrectly, that the definition of the term "assets" must parallel the definition of the term "net worth," i.e., that both terms must exclude ownership interest and home equity. Yet nothing in the regulations indicates that the definitions of "assets" and "net worth" must be the same. Section 124.106(a)(2)(i)(E) expressly defines "net worth" as to exclude ownership interest and home equity, but no such regulatory or statutory provision limits the definition of "assets" this way. In act, the regulations expressly provide that the SBA may consider the "total fair market value of all assets." 13 C.F.R. § 124.106(a)(2)(i) (emphasis added).
In applying these regulations to this case, the SBA appropriately acknowledged that Mr. Sandhu's net worth, properly calculated, excludes his ownership interest in SRS. (SBA Letter of September 30, at 1-2.) However, the SBA also appropriately weighed Mr. Sandhu's $ 4.6 million in total assets as another "specific factor to be considered" (13 C.F.R. § 124.106(a)(2)(i)), and reasonably concluded that SRS was not entitled to SDB status.
VI. SECOND MOTION FOR PRELIMINARY INJUNCTION
SRS's motion for a second preliminary injunction shall be denied as moot. This new preliminary injunction motion, filed January 10, 1994, challenges the SBA's decision that SRS is not an SDB for the purposes of another government contract, the so-called "Marshall procurement."
However, SRS concedes that once this court rules on the cross-motions resolved in this memorandum opinion, the relief SRS seeks in its second preliminary injunction motion will not be needed. (Pl.'s Motion for Preliminary Injunction, at P 1.) Accordingly, SRS's motion for a second preliminary injunction shall be denied as moot.
VII. SUPPLEMENTAL COMPLAINT
SRS's motion for leave to file a supplemental complaint shall be denied. The supplemental complaint argues, among other things, that the SBA wrongly denied SRS's SDB protest against SCITEK.
In light of the relief today afforded SRS on the proposed award to SCITEK, which is now permanently enjoined, it is not clear that SRS will suffer any harm from the SBA determination as to SCITEK. In any event, deciding the issues raised by the supplemental complaint will unreasonably delay disposition of this case. For these reasons, SRS's supplemental complaint must await another day. SRS is free to recast the arguments of its supplemental complaint as a complaint in a new, perhaps related, action before this court.
VIII. MOTION FOR EXTENSION OF TIME
SRS's motion for an extension of time to file its opposition to defendants' motion to dismiss or for summary judgment is granted, nuno pro tunc, until November 8, 1993. SRS requested that its opposition be due eleven days after this court ruled on SRS's anticipated motion to compel production. SRS withdrew its motion to compel on November 8, 1993, and filed its opposition to defendants' cross-motion that day. Its opposition shall be deemed timely filed.
A separate order shall issue this date.
Royce C. Lamberth
United States District Judge