Proposed SBA Veteran-Owned Small Business Certification Process

Published: August 03, 2022

Federal Market AnalysisContracting TrendsPolicy and LegislationSDVOSBSmall BusinessSBAVA

Last month, SBA released a proposed new process for certifying veteran-owned businesses for the purpose of federal contracting activities. Comments on the proposed new process are due August 5th.

The Veteran-Owned Small Business (VOSB) and Service-Disabled Veteran-Owned Small Business (SDVOSB) programs authorize federal contracting officers to restrict competition to eligible VSOBs and SDVOSBs for VA contracts.

SBA takes over certification of veteran-owned businesses from VA on January 1, 2023 as prescribed by the 2021 National Defense Authorization Act (NDAA). SBA released a draft proposal of the new certification process in the Federal Register on July 6th. Comments are due by the end of this week, on August 5th.

The Federal Register notice describes SBA’s proposed process for certifying VOSBs and SDVOSBs. One of the major changes involves eliminating the self-certification process for SDVOSBs and adopting a government-wide certification process. Self-certified SDVOSBS will be granted a one-year grace period to maintain their eligibility if they submit an application during that timeframe. They must apply for certification under the new rules by December 31, 2023.

Key Components of the Proposed SBA Process:

  • SBA proposes to implement the Veterans Certification Program (Vets Program) in a new 13 CFR part 128 which will specify the program rules.
  • SBA will grant reciprocity to participants in the 8(a) Program and Women-Owned Small Business (WOSB) program that are owned and controlled by veterans or service-disabled veterans.
  • Firms currently certified with the VA Center for Verification and Evaluation (CVE) program will continue to be certified for the remainder of the 3-year eligibility term.
  • SBA generally adopted the procedures that the VA used for application guidelines, rules on continuing eligibility, program examinations, and program exit procedures.
  • For the most part, the eligibility rules are similar to the SDVOSB ownership and control rules that currently exist in SBA’s rules.
  • “SBA has not established the policies and procedures for application processing at this time.” Those details will be released in a future rule.

SBA’s proposed certification process combines its existing rules for eligibility with the application procedures from VA. A summary of the proposed changes from current VA CVE eligibility and processes are listed below:

  • Firm Size: Firms can qualify if they are small for any NAICS code under which they currently conduct business activities, not just a primary NAICS code, but SBA is still working on how to define the meaning of “currently conducts business activities.”
  • Limited Purpose Self-Certification: For the limited purpose of counting agency’s SDVOSB goals, a firm may still self-certify. SBA states that a self-certified SDVOSB may be awarded a small business set-aside and the agency may count the award as both a small business and SDVOSB toward the agency’s goals.
  • Parole Removal: SBA “proposes to eliminate consideration of whether an individual who is currently incarcerated, or on parole or probation owns or controls an applicant concern” as being a responsibility issue. Consequently, the good character review would be limited to whether a company was debarred or suspended.
  • Rebuttable Presumptions: Current SBA regulations list several “rebuttable presumptions” of control by a non-veteran. SBA proposes adopting those existing regulations in full but is “soliciting comment as to whether those rebuttable presumptions should be viewed merely as factors of control by non-veterans rather than conditions of ineligibility that an applicant must rebut.”

Veteran-owned contracting firms should continue to monitor SBA progress for any changes to the certification process or eligibility requirements and follow procedures for maintaining veteran-owned certification standing. Large contractors working with veteran-owned entities in subcontracting roles should also be aware of any changes or deadlines for certification or re-certification and monitor partners’ progress at meeting these requirements.