2023 brings with it some pretty significant changes to certification for both VOSBs and SDVOSBs. Before we get into the meat of those changes, let’s do a quick overview of what exactly these designations mean, along with an overview of certification.
VOSB (Veteran-Owned Small Business) and SDVOSB (Service-Disabled Veteran-Owned Small Business) certification are programs run by the federal government to help veterans and service-disabled veterans gain access to government contracting opportunities. Obtaining VOSB or SDVOSB certification can be a valuable way for veterans to grow their businesses. The process of obtaining VOSB and SDVOSB certification can be complex, but there are many resources, including the SBA’s veteran contracting assistance programs, available to help veterans navigate the process.
To be eligible for VOSB certification, a business must be at least 51% owned by one or more veterans and whose management and daily operations are controlled by one or more veterans. The certification process involves registering in the Veterans Affairs Vendor Information Pages (VIP) database, completing an application, and providing documentation to prove veteran ownership and control.
SDVOSB certification is similar to VOSB certification, but it is specifically for small businesses that are at least 51% owned and controlled by one or more service-disabled veterans. To obtain SDVOSB certification, a business must first register in the VIP database, then complete an application and provide documentation to prove veteran ownership and control, as well as service-disabled veteran status.
Once certified, VOSB and SDVOSB businesses are eligible to participate in certain government contracting opportunities set aside specifically for veteran-owned small businesses. An example of the benefits for VOSBs and SDVOSBs is that they can have an easier time getting on a GSA schedule.
Agency: Small Business Administration (SBA)
Action: Final Rule (November 29, 2022)
Effective Date: January 01, 2023
Summary: The Small Business Administration (SBA) amends its regulations to implement a statutory requirement to certify Veteran-Owned Small Business Concerns and Service-Disabled Veteran-Owned Small Business Concerns participating in the Veteran Small Business Certification Program.
What does this mean?
- Starting January 1, 2023 (Transfer Date), the SBA oversees/processes/approves certification programs.
- This applies to all Federal contracts – not just Veterans Affairs (VA) contracts.
- Businesses with VA Center for Verification and Evaluation (CVE) certification prior to January 1, 2023 will not lose their status.
- In order to be eligible to receive prime contracts, VOSB and SDVOSB set-asides (competitive or directed), businesses must obtain SBA certification no later than December 31, 2023.
- Subcontractors are not required to obtain SBA certification. They can continue to self-certify.
Background: The SBA amends its regulations to establish a certification program for VOSB and SDVOSB to implement section 862 of the National Defense Authorization Act for Fiscal Year 2021, Public Law 116-283, 128 Stat. 3292 (January 1, 2021) (NDAA 2021).
The Veteran-Owned Small Business and Service-Disabled Veteran-Owned Small Business Programs, set forth in 38 U.S.C. 8127, authorize Federal contracting officers to restrict competition to eligible VOSBs and SDVOSBs for Department of Veterans Affairs (VA) contracts. Previously, to be eligible for VA contracts, VOSBs and SDVOSBs had to be verified by VA’s Center for Verification and Evaluation (CVE) in accordance with 38 U.S.C. 8127. There was no Government-wide SDVOSB certification program, and firms seeking to be awarded SDVOSB sole source or set-aside contracts with Federal agencies other than the VA only needed to self-certify their status as set forth in section 36 of the Small Business Act, 15 U.S.C. 657f.
Section 862 of the NDAA 2021 amended the VOSB/SDVOSB requirements to transfer the responsibility for certification of VOSBs and SDVOSBs to SBA as of January 1, 2023 (Transfer Date) and created a certification requirement at SBA for SDVOSBs seeking sole source and set-aside contracts across the Federal Government. Section 862 also created a one-year grace period after the Transfer Date for businesses to file an application for SDVOSB certification with SBA and to continue to self-certify. Self-certified SDVOSBs that apply within the one-year grace period will maintain eligibility until SBA makes a final eligibility decision. With the exception of this grace period, once this rulemaking is finalized, VOSBs and SDVOSBs that are not certified by SBA’s Veteran Small Business Certification Program will not be eligible to receive sole source or set-aside VOSB or SDVOSB awards across the Federal Government.
Firms verified by VA’s CVE prior to the Transfer Date will be deemed certified by SBA during the time that remains in the firm’s three-year term of eligibility. To be recertified by SBA after the Transfer Date, those verified firms will be required to meet all conditions of eligibility as described in SBA’s revised regulations. In addition, the Administrator may extend a participant’s eligibility period up to one year. To facilitate the transition of those firms already verified by VA’s CVE before the Transfer Date with an eligibility period that expires in the first year of the Program, SBA intends to extend the eligibility of those verified firms for a period up to one year. Firms must continue to meet the VOSB or SDVOSB requirements at all times while certified and may be subject to a program examination or a VOSB or SDVOSB status protest.
SBA will implement the Veteran Small Business Certification Program in a new 13 CFR part 128. Part 128 is organized into the following subparts: Subpart A—Provisions of General Applicability; Subpart B—Eligibility Requirements for the Veteran Small Business Certification Program; Subpart C—Certification of VOSB or SDVOSB Status; Subpart D—Federal Contract Assistance; Subpart E—Protests Concerning VOSB and SDVOSBs; Subpart F—Penalties and Retention of Records; and Subpart G—Surplus Personal Property for VOSB Programs.
SBA received a number of comments requesting that SBA eliminate self-certification entirely. As discussed further below, SBA has considered these comments and decided to implement its proposal to continue allowing self-certification for SDVOSBs at the subcontract level and for purposes of SDVOSB goaling credit. SBA determined that eliminating all forms of self-certification at this time would be contrary to its overarching goal of harmonizing its small business certification programs, which largely allow self-certification for purposes of subcontracts and goaling. Establishing a policy to eliminate self-certification for these purposes could also adversely impact the implementation of the Veteran Small Business Certification Program. Given the broad implications to the federal small business procurement system, SBA believes a change of this magnitude is outside the scope of this rule. SBA intends to comprehensively review the use of self-certification in its socioeconomic certification programs for goaling and subcontracting purposes with federal government stakeholders and SBA contracting program participants. However, SBA anticipates sunsetting these forms of self-certification after five years, through a separate rulemaking.
See for further information and certification details: Federal Register :: Veteran-Owned Small Business and Service-Disabled Veteran-Owned Small Business-Certification
SBA website: Veteran assistance programs (sba.gov)