Appeal of decision finding company ineligible for SDVOSB certification is denied. To be an eligible SDVOSB, a service-disabled veteran must either personally possess an applicable business license or supervise someone who possesses the license. Here, a service-disabled veteran did not possess a required construction license, and the company could not establish that the veteran supervised an employee who possessed the license. In fact, the company could not even prove the service-disabled veteran controlled the business.
Barry Capital Projects, Inc., which had been certified as a Service-Disable Veteran-Owned Small Business in 2013 and 2015, applied for recertification in 2018. The Department of Veterans Affairs noted several problems with application: (1) Barry was in the construction business, but the service-disabled veteran (SDV) who purportedly ran the company did not have a construction license; (2) it did not appear that an SDV controlled the day-to-day operations of Barry; and (3) Barry had an outstanding debt for unpaid payroll taxes. The VA was not satisfied with Barry’s attempts to resolve these issues and thus denied the company’s application for SDVOSB certification. Barry appealed to SBA’s Office of Hearing and Appeals.
OHA noted that at the outset that to qualify as an SDVOSB, a business must be owned or controlled by an SDV. One of the factors that determines whether an SDV controls the business is whether the SDV possesses a license required to maintain the business, and if not, whether the SDV has control over a person who does possess a license.
Barry first argued that it was not required to have a construction license. But OHA noted that Barry was in the residential remodeling business in Minnesota. Minnesota statutes require a residential remodeler to have a construction license. Because a construction license is required for residential remodelers in Minnesota, any Minnesota SDVOSB in that industry must have such a license.
Next, Barry contended that one of its non-SDV principals possessed a construction license and that this person was managed and supervised by the company’s President who was an SDV. The VA had asked Barry to provide the President’s work schedule to establish his management of the company. Rather than provide a schedule, Barry simply contended that the President’s hours varied due to the seasonal construction schedule in Minnesota.
But OHA found this excuse unacceptable, reasoning that even with the seasonal nature of construction work, it was not impossible for Barry to provide a schedule for its President. A sample schedule with an explanation about the cyclical nature of the business would have sufficed. Absent this, OHA determined, Barry could not prove that an SDV controlled either the company or the non-SDV with the construction license.
Barry also argued that it had paid the outstanding payroll tax debt. But OHA opined that the burden is on an appellant to submit information regarding its suitability as an SDVOSB. Barry had not submitted check stub, bank statements, or a letter from the debtor to indicate the debt had been satisfied.
Barry is represented by Mark Barry, its President.
