By Nancy Brown, Executive Director of KYPTAC
From the KYPTAC team, Happy Veterans Day to all veterans, and thank you for your service. In honor of Veterans Day, we are discussing Veteran certifications.
Veterans First Contracting Program
The U.S. Department of Veterans Affairs (VA) allows Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) to become certified through the Veterans First Contracting Program to gain set-aside and sole-source contracts. This can be a great way to tell the largest customer in the world know that your business is operated by a veteran. Not only that, but a Veteran certification gives you more tools in your marketing toolbox that ultimately helps you gain more business opportunities and increase your bottom line.
What are SDVOSB and VOSB programs?
A VOSB must be more than majority or 51% or more owned by a veteran, the veteran owner must have been honorably discharged from service and the veteran owner must be involved in the management and daily business operations.
An SDVOSB is a small business that is owned at least 51% by a disabled veteran deemed by the Veterans Administration. These designated business owners have access to certain federal contract set-asides set by agencies. Also, federal agencies can award contracts as a sole source to SDVOSBs if the award cannot exceed the $4 million for non-manufacturing contracts and up to $7 million for manufacturing contracts.
How much is set aside for SDVOSB?
Executive Order 13360 calls for a significant increase in federal contracting and subcontracting opportunities for SDVOSBs. However, the current minimum threshold for each agency is 3% of their annual spending budget. It equates to $26.1 billion of SDVOSB contracts spanning across multiple industries in FY2020.
How does the government define a service-disabled veteran?
The FAR defines a service-disabled veteran as a person who has served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable, and whose disability was incurred or aggravated in the line of duty in the active military, naval, or air service.
To be considered a Service-Disabled Veteran, the veteran must have a letter from the VA, a DD 214, Certificate of Release or Discharge from Active Duty, or a Statement of Service from the National Archives and Records Administration, stating that the veteran has a service-connected disability.
SBA’s Self-Certification as a Disabled Veteran-Owned Business
You can self-represent your business to the federal government as being owned by a Service-Disabled Veteran by updating the socio-economic status section of your business profile on SAM.gov. Your PTAC consultant can walk you through the self-certification.
Contracting Officers may require documentation of eligibility before awarding set-aside or sole-source contracts under the program. The SBA SDVOSB program is different from the VA program. The SBA program does not provide a priority or preference to SDVOSBs. It simply allows contracting officers to create SDVOSB set-asides or make sole source awards if they choose to do so to meet the 3% government-wide goal.
Changes are coming in 2023
On January 1, 2023, the VA’s Center for Verifications and Evaluations (CVE), will be fully transitioned to the SBA. For years, there have been two federal certification programs for SDVOSBs - one administered by the VA and the other by SBA. Unfortunately, this created some redundancies in government spending and confusion for contractors. Therefore, congress took steps to consolidate the programs back in 2018.
In an attempt to eliminate inconsistent regulatory requirements for the Veteran certification programs, the responsibilities of the Center for Verifications and Evaluations (CVE) are being abolished, transferring the certifications from the VA to the SBA. It is an attempt to eliminate the duplication of effort between the two agencies. Additionally, the transfer will eliminate the self-certification for the non-VA verified SDVOSB program.
The SBA has two years to consolidate the VA’s database of certified SDVOSBs with its own to launch the new certification by January 1, 2023.
SDVOSBs and VOSBs that are not currently verified will have a one-year grace period to apply for certification with SBA. While many factors remain unknown about this new transition, you can rely on the KYPTAC team to deliver more details and information to you. If you have questions or concerns about these changes, contact your procurement consultant.
This article was originally published in our monthly KYPTAC Newsletter. If you have any questions about this topic, your KYPTAC consultant is here to help! Not a client? Sign up here.