Good Timing: SBA Decision on Full-Time Devotion Allows For Two Jobs if No Hours Overlap

There are multiple overlaps in SBA’s socioeconomic rules for the 8(a) Program, Women-Owned Small Business Program (WOSB), and the Service-Disabled Veteran-Owned Small Business (SDVOSB) Program. One in particular has often caused some confusion for our clients: the full-time devotion requirement. This rule generally requires that the service-disabled veteran owner (or equivalent key owner in the other programs) work full time for the company with the SDVOSB status. But what does this mean in practice, especially for start-up companies where the owner may be working a second job. A recent SBA decision sheds some light on the full-time devotion rule.

SBA considered this issue In & Out Valet Co., SBA No. VSBC-363-P, 2024 (June 12, 2024). That case arose from an SDVOSB protest filed by a competitor after Crown Based Services, LLC (Crown) won an award for valet services for a VA Medical Center. One protest argument concerned the full-time devotion requirement.

The Full-Time Requirement

SBA regulations bar a service-disabled veteran owner from engaging “in outside employment that prevent[[s] [him or her] from devoting the time and attention to the concern necessary to control its management and daily business operations.” 13 C.F.R. § 128.203(i). Normally, the service-disabled veteran “must devote full-time during the business’s normal hours of operations”. Id. Additionally, “[w]here a qualifying veteran claiming to control a business concern devotes fewer hours to the business than its normal hours of operation, SBA will assume that the qualifying veteran does not control the concern, unless the concern demonstrates that the qualifying veteran has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management of the business.” Id.

So, the rule sets up a default assumption–that a veteran owner who does not work full time for the SDVOSB during normal business hours does not control it. But it allows a company to demonstrate veteran control even in the absence . However, historically, it has been hard to overcome this assumption when dealing with the VA Center for Verification and Evaluation (the predecessor to the current CVE at SBA).

Business Hours

In this case, the veteran owner “confirmed that he operates Crown full time, during Crown’s normal business hours of 8:00am to 2:00pm, Monday to Friday. Although [the veteran owner] holds outside employment as an insurance agent from 2:00pm to 8:00pm Monday to Friday, this outside employment does not prevent Mr. Hill from working full time with Crown, during Crown’s normal business hours.”

Based on this confirmation from Crown, OHA denied the protest and concluded that the veteran owner met the full-time devotion requirement. The key takeaway here is that, if a veteran owner (or other key individual for 8(a) or WOSB Program) works a second job, it must be very clear that there is no overlap between the working hours of the SDVOSB company and the second job. Here, OHA did not question the ability of someone to work 12-hour days. After all, that is doable. The key was that there were clear hours set aside for the SDVOSB company.

Contrast this situation with a case we recently discussed. In the prior case, the SDVOSB failed to clearly describe the working hours at the SDVOSB versus the second job and was found noncompliant with the rule. If you have questions about the full time devotion requirement for the SDVOSB, 8(a), or WOSB programs, let us know.

Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919.

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedInTwitter and Facebook.