Manager of 8(a) Applicant Either Worked Full-Time for Another Company or Had the Best Part-Time Job in the History of Employment

The SBA denied an application for admission to the 8(a) Business Development program because the applicant’s manager had two other jobs, so it didn’t appear he managed the applicant on a full-time basis. The manager claimed on appeal that he only worked part-time for the other companies, but he worked full-time for the applicant. OHA didn’t buy it, finding the manager’s contentions were contradicted by the record. In particular, the manager claimed he only worked five hours per week for a landscaping company. But he had not explained how he earned $164,000 per year working only five hours per week.

In the Matter of Brendon Lau Agriculture LLC, SBA No. BDPE-603

Background

Brendan Lau Agriculture applied for admission to SBA 8(a) Business Development program based on the eligibility of its owner Brendon Lau. SBA denied admission, finding that Lau was not devoted to the full-time management of his company. Lau worked for two others companies as foreman for a landscape company and the manager of an aquaponics company. Lau appealed to SBA’s Office of Hearings and Appeals

Analysis

For admission to the 8(a) program, an applicant must be managed on a full-time basis by a disadvantaged individual. OHA generally recognizes full-time as 40 hours per week. If the manager has a second job, it’s not problematic if the other employment does not conflict with the full-time commitment to manage the applicant.

Here, despite multiple requests, Lau had nor produced work schedules from his other jobs. Thus, the SBA was unable to determine how much time he devoted to other work.

While Lau claimed he worked 45 hours per week for his company, this was contradicted by other information in the record showing that he worked as a manager or supervisor for two other companies. OHA did not believe Lau could provide that kind of supervisory work outside of normal working hours. Indeed, while Lau claimed he only worked 5 hours per week for the landscaping company, he earned $164,000 per year from that company. Lau had not explained how he derived that kind of scratch working five hours per week.

Brendan Lau Agriculture is represented by Brendon T.W. Lau. The government is represented by William D. David of the Small Business Administration.