The Department of Veterans Affairs (VA) is working to find an appropriate balance between preventing fraud in the Veterans First Contracting Program and providing a process that would make it easier for more Veteran-Owned Small Businesses (VOSBs) to become verified.
Audits performed by the GAO and the VA Inspector General both found fraud still exists in the Veterans First Contracting Program, despite the VA’s Verification Program. “Rent-a-Vet” schemes have tarnished the procurement process and have cost legitimate VOSBs millions in contracting dollars. The VA’s proposed amendments are one of the VA’s attempts to help combat that fraud and to make the certification process less confusing and rigorous. Highlights of the proposed changes include:
- Clarifying the eligibility requirements for businesses to obtain verified status.
- Changing the order of requirements.
- Better explaining the review process.
- Revising and adding some definitions.
For example, ownership and control will be redefined by the proposed rule. Small businesses must be owned and controlled, on a day-to-day basis, by qualified veterans. Control is not the same as ownership and includes the long-term decision-making authority and management of the business operations. Supervisory and managerial control (i.e., requisite managerial experience necessary to run the business) must also be demonstrated in order for the business to be verified as a VOSB.
Two new terms, “daily business operations” and “permanent caregiver,” would be added, and the term “daily business operations” would replace the terms “day-to-day management” and “day-to-day operations,” both of which would be removed. Also, “veteran” would be revised to include all people who served on active duty and were discharged or released under conditions other than dishonorable. This particular change is not intended to create a new class of veteran, but to clarify that those who are eligible under the applicable statutes will be found eligible for participation in the program.
There are numerous other proposed changes, which can be found here. Those who are interested in making this process better for VOSBs should review the changes in detail and provide comments on the proposed amendments here. The deadline for submitting comments is Jan. 5, 2016.
This law update was co-authored by Taft partner Suzanne Sumner and Taft paralegal Christina Heidecker.