On July 6, 2022, the Small Business Administration (SBA) issued a proposed rule, mandated by Section 862 of the 2021 National Defense Authorization Act, to establish a government-wide certification program for veteran-owned small businesses (VOSBs) and service-disabled veteran-owned small businesses (SDVOSBs). This program would replace the U.S. Department of Veterans Affairs (VA) Center for Verification and Evaluation (CVE) which is currently used to verify whether VOSBs and SDVOSBs qualify for those respective statuses. The SBA’s certification program would also end self-certification for contractors performing contracts for agencies other than the VA.
The current certification process applies only to VOSBs and SDVOSBs that want to contract with the VA. The VA’s certification affords companies a mandatory preference for all VA contracts where at least two VOSBs or SDVOSBs are expected to bid on the procurement and can perform the required work for a “fair and reasonable” price.
For agencies other than the VA, the awarding agency/contracting officer is responsible for confirming SDVOSB eligibility compliance. According to the SBA, the goal of the proposed rule is to reduce “the ambiguity and uncertainty for contracting officers in the process of making federal contract awards to eligible SDVO firms that were previously only required to self-certify” and to increase the likelihood that contracting officers will set aside more contracting opportunities for VOSBs and SDVOSBs.
Although companies who want to compete for VOSB and SDVOSB set aside contracts at agencies outside the VA have been able to self-certify as to that status, the proposed rule would require all VOSBs and SDVOSBs to pursue formal certification from the SBA. Once the formal certification is obtained, it will have to be renewed every three years.
The SBA expects to issue a final rule and transition to this new program by Jan. 1, 2023, but reserves the right to postpone the deadline if necessary.
Unless things change in the final rule, self-certified contractors will have one year from the transition date to file their application for formal certification, and those that submit their application during the one-year grace period will maintain their eligibility until the SBA makes a final eligibility decision. Contractors certified by the VA before the transition date will maintain their certification until the three-year eligibility period ends. VOSB and SDVOSB eligible companies previously certified under the SBA's Women-Owned Small Business (WOSB) and 8(a) programs will receive an expedited review since they have already had to show their ownership and control structure to be eligible under those programs.
Taft summer associate Celeste Friel co-authored this article.