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Federal Market Intelligence for Small Business |
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Surge in SDVOSB and VOSB verifications at Veterans AffairsVA, SBA officials preparing joint rule on vet ownershipThe Veterans Affairs Dept. has experienced a surge in verifications of veteran-owned small businesses in the last several years, a top official testified at a joint congressional subcommittee hearing. The growth is happening as the VA and Small Business Administration are preparing new joint regulations on ownership and control of veteran-owned firms. As of June 30, the VA had 14,084 firms verified as veteran-owned small businesses (VOSBs) or service-disabled VOSBs (SDVOSBs), Thomas J. Leney, executive director of the VA’s Office of Small and Disadvantaged Business Utilization, said at the July 17 hearing. That total is nearly double the 7,400 verified VOSBs and SDVOSBs in the VA’s database as of 2015, according to a Government Accountability Office report from 2015. It said there were 2,900 verified firms in 2010. Much of the increase happened in fiscal 2017, with nearly a 30% rise in initial applications in the first three quarters of that year, Leney said. The number of new applications has “slightly” grown this fiscal year, with 10,194 initial applications received as of June 30, Leney said. So far, 4,009 applications have been approved this fiscal year, 85 were denied, 1,346 were withdrawn by the applicant and 5,823 were removed for administrative reasons. The administrative reasons included failing to respond to requests for information. Leney said the growth has been spurred in part by the Supreme Court’s Kingdomware decision in 2016. The court declared that under the “Vets Benefits, Health Care and IT Act” of 2006, Congress intended that all VA contracts must be researched under the Rule of Two. The research determines if there are two or more SDVOSBs or VOSBs able to do the work at a fair and reasonable price that offers best value, and are likely to bid on the job. If so, the contract must be awarded to one of those firms. (Note: Leney also recently said the VA has experienced “excessive pricing” in SDVOSB and VOSB set-asides and has instituted a tiered evaluation process to avoid delays from having to redo those set-asides. See related story.) 2017 NDAA changes The 2006 law ordered the VA to give highest priority to SDVOSBs and VOSBs in awarding contracts. The VA set up its own verification program to verify eligible firms. At the same time, service-disabled veterans also may self-certify to win set-asides at other federal agencies. The two paths to certification and two sets of standards for eligibility--the VA’s and the self-certification path--have caused confusion over the years. In the 2017 national defense authorization law, Congress decided to order a single set of standards for ownership and control of veteran-owned firms eligible for federal set-asides. The VA and the Small Business Administration are working together on a joint regulation to create those standards. To prepare for the joint rule, the VA on Jan. 10 proposed to turn over veteran ownership and control matters to the SBA, and the SBA on Jan. 29 proposed regulations to receive that authority. “The final remaining step is to publish final rules addressing the public comments received. This is not a trivial exercise, but we anticipate completing it before the end of Fiscal 2018,” Leney said at the hearing. Wong’s testimony Robb Wong, SBA’s associate administrator for government contracting and business development, also testified at the hearing, for himself and also on behalf of William Gould, a senior advisor to SBA Administrator Linda McMahon. Wong said the VA and SBA formed an “exploratory committee” in December 2017 to look at options for veteran-owned certifications. The panel has six members from VA and six from SBA. One option is for SBA to also certify SDVOSBs, although that would require legislative and regulatory changes, Wong said. SDVOSB certification could be expanded to a governmentwide requirement. Also, the SBA/VA committee is examining the “possibility and subsequent process for moving the VA certification program to SBA,” Wong said. But it would be important to minimize disruptions, he added. That would include disruptions to the 14,000 SDVOSBs and VOSBs already certified by the VA. The hearing was co-sponsored by subcommittees of the House Small Business and the House Veterans Affairs committees.
More information:
House hearing: https://bit.ly/2LdsRgx
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