Your TL;DR: EBHC has appeared on NIH’s List of Substantially Affected Organizations since December 23, 2014. Despite how the term may sound, being an SAO is not a sanction, warning, or finding of wrongdoing. NIH maintains the list to assist its employees in complying with federal ethics and financial-interest rules. EBHC’s listing is associated with NAICS 541720, Research and Development in the Social Sciences and Humanities, a classification that reflects work we have performed for years.
Search for EBHC in the National Institutes of Health’s List of Substantially Affected Organizations, and you will find us there. We have been there for quite some time, too. NIH’s historical record for our business goes back to December 23, 2014.
We realize that “Substantially Affected Organizations,” or SAO, can sound concerning if you encounter the term without any context. A client conducting due diligence might reasonably wonder why a consulting firm appears on a federal ethics list, whether inclusion indicates some type of problem, or whether it affects our ability to work with organizations pursuing NIH funding. The short answer is much less dramatic: the SAO list exists primarily for NIH employees, not as a rating or warning system for the organizations appearing on it.
NIH describes the list as a resource that assists its employees in identifying organizations considered substantially affected so they can comply with Department of Health and Human Services regulations. NIH also states that the list was produced using North American Industry Classification System, or NAICS, codes, and is not all-inclusive. Understanding that purpose changes the meaning of finding EBHC on the list considerably.
If you encounter an SAO designation while conducting due diligence on a consultant, partner, or other organization, start with the underlying NIH ethics guidance before assuming the designation says something about that organization’s conduct.
What Does “Substantially Affected Organization” Actually Mean?
The term comes from federal ethics regulations governing certain NIH employees and their financial interests and outside activities. NIH guidance defines an SAO to include biotechnology or pharmaceutical companies, medical device manufacturers, entities significantly involved in specified research and development activities, organizations primarily composed of those entities, and other organizations determined to be substantially affected by NIH programs, policies, or operations. Why does NIH care about identifying these organizations? The answer has to do with the integrity of federal decision-making.
Certain NIH employees must report financial interests in SAOs, and financial interests may be prohibited or limited depending on the employee and circumstances. Separate federal conflict-of-interest rules can also require an employee to recuse from a particular matter when it would affect the employee’s own or imputed financial interests. NIH explicitly tells employees that responsibility for complying with these requirements rests with the employee. That context is important. The list is part of an employee ethics framework. Its purpose is to assist NIH personnel in recognizing organizations that could be relevant to their ethics obligations.
Why Is EBHC on the List?
This is where our actual NIH record provides useful context. The record identifies our trade name as E B Howard Consulting and associates the business with NAICS 541720, Research and Development in the Social Sciences and Humanities. Our NIH listing history dates back to December 23, 2014.
NAICS 541720 is not an arbitrary label. The U.S. Census Bureau describes the classification as covering establishments primarily engaged in research and analysis in areas including economics, sociology, psychology, behavior, language, and other social science and humanities research. NIH specifically includes 541720 among the NAICS codes it uses to create its SAO list. That classification is entirely reasonable for EBHC.
Our work has long included research and evaluation, particularly within government-funded projects and innovation ecosystems. We evaluate programs, analyze evidence, conduct funding research, and work alongside organizations engaged in research and development. The fact that a research-oriented NAICS classification places us within the scope of an NIH employee ethics resource is consistent with that work. There is a GAP, however, between what the phrase “Substantially Affected Organizations” sounds like in ordinary language and what it means within this particular federal regulatory context. Without the latter, it is easy to attach significance to a designation that NIH itself does not attach.
What Our SAO Listing Does Not Tell You
Being on NIH’s SAO list is not the same thing as being sanctioned, debarred, investigated, or found to have violated a federal requirement. NIH does not describe the SAO database as a list of organizations with compliance problems. It describes it as a tool for employees to identify organizations relevant to financial-interest rules. There is another useful detail in NIH’s own guidance: appearing in the database is not even the final word on SAO status in every situation. NIH maintains a separate list of entities that appeared on the Dun & Bradstreet-generated SAO list but were subsequently determined not to be SAOs. NIH also maintains a list of additional organizations determined to be SAOs even though they were not included on the D&B list.
That tells you quite a bit about how the resource should be interpreted. It is a compliance tool built to assist NIH employees with classifications and agency determinations supporting that process. It is not designed to serve as a due diligence scorecard for prospective clients.
Does EBHC’s SAO Status Affect Our Clients?
For a typical EBHC client, our appearance on the SAO list does not change the consulting relationship. It does not mean an organization cannot retain EBHC for funding research, grant writing, SBIR/STTR support, or evaluation. It does not indicate that EBHC is ineligible to work with organizations pursuing NIH opportunities. It does not tell you anything about the quality of our work, our performance for clients, or our standing with a funding agency. The designation becomes particularly relevant when an NIH employee has a financial interest in, or potentially certain outside activities involving, an organization considered an SAO. That employee may have reporting, limitation, recusal, or other ethics obligations depending on the circumstances. NIH directs employees to their ethics officials for guidance when an organization’s status or the application of the rules is unclear.
Why Being on the List Since 2014 Matters
The December 23, 2014, listing date of EBHC provides a useful perspective. EBHC did not suddenly appear in the SAO system following a recent event. Our presence dates back more than a decade and corresponds to a NAICS classification that NIH explicitly identifies among the codes used to construct its SAO list. That history also illustrates why we wanted to address the subject publicly. Organizations operating in the federal funding ecosystem encounter plenty of terminology that has a precise regulatory meaning and a very different everyday meaning. “Substantially affected” is one of those phrases. A founder searching for a consultant may read it one way. An NIH ethics official reads it within a specific regulatory framework. Those interpretations are not interchangeable. We would rather make the distinction clear.
EBHC has been on NIH’s List of Substantially Affected Organizations since December 23, 2014. Our listing is associated with NAICS 541720, Research and Development in the Social Sciences and Humanities, one of the classifications NIH identifies for creating its SAO list. The list exists to support NIH employees in complying with federal ethics requirements concerning financial interests and related matters.
For clients, prospective clients, and collaborators who encounter our name there, that is the context worth knowing.