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Why So Few SDV Contracts? Officials, Business Owners Disagree SBA’s advocate for veterans said service-disabled vets are lagging in federal contracting because so many of their companies are too small to meet the government’s needs. William Elmore, associate administrator for veterans’ business development, told the Senate Small Business Committee that SDV firms as a group are the smallest of all socioeconomic categories registered in the Central Contractor Registration. He said SDV firms account for only seven-tenths of one percent of all businesses, making it difficult for the government to meet its 3% goal for contracting with those firms. “We have to build the capacity of those businesses,” he said at the Jan. 31 hearing. Linda Oliver, acting director of the Defense Department’s Office of Small Business Programs, said the size of most DOD contracts limits opportunities not only for SDVs, but for all small businesses. Committee Chairman John Kerry replied, “What I’m hearing is that there are service-disabled veteran owned businesses ready and willing, and they just don’t get (contracts) or they find it too much of a maze to walk through.” The government has never awarded even 1% of its total contract dollars to SDVs and few agencies have met the 3% goal. Both SBA and the Veterans Affairs Department said they exceeded 3% in 2006. Veteran business owners urged Congress to eliminate the “rule of two” to make it easier to award sole-source contracts to companies owned by service-disabled vets. Under current rules, if two SDV firms are capable of performing a requirement, the contract must be competed rather than awarded sole-source. That is not the case in the 8(a) program. The Senate committee voted last year to eliminate the rule of two for SDVs, but the bill was not enacted. The issue will come up again this year when both houses of Congress consider reauthorizing SBA programs. Republican Rep. Jo Ann Davis of Virginia has proposed legislation, H.R. 109, to make SDV companies automatically eligible for the 8(a) program. Ann Yahner, a retired Navy captain who is president of Penobscot Bay Media LLC in Maine, said SDV firms often “are educating contracting officers because they know very little about the program.” Scott Denniston, director of the Veterans Affairs Department’s Center for Veterans Enterprise, agreed that more training of C.O.’s is needed. He said it is a “cultural issue” of acclimating them to a new program. President Bush’s proposed 2008 budget would allocate an additional $500,000 to SBA’s Office of Veterans Business Development. The office’s budget has been around $750,000 for the past five years, Sen. Kerry said.
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