As we noted just the other day, the federal government operates two SDVOSB programs for contractors. The VA’s program (which encompasses all SDVOSB contractors hoping to contract with the VA) requires firms to pass through a formal certification process. By contrast, the other program, which is run by SBA and governs SDVOSBs for the rest of the federal government, allows for firms to self-certify their eligibility. Both programs do, however, share the same eligibility regulations at 13 C.F.R. Part 125.
SBA’s self-certification feature for SDVOSB is unique among its contracting programs. Indeed, all other programs, including the 8(a), WOSB, and HUBZone programs require formal certification process.
In the recent conference report for the 2021 National Defense Authorization Act, Congress has finally stepped in to implement a single, streamlined SDVOSB program.
This consolidation is important, as it eliminates one of the most confusing aspects of small business federal contracting. Here are the key takeaways:
- VA’s database of certified SDVOSB firms would be transferred to SBA.
- SBA would operate a certification process for all SDVOSBs across the federal government; VA would lose its separate authority to certify SDVOSBs for contracting purposes.
- Contracting officers would only be permitted to award an SDVOSB set-aside or sole source award to SDVOSBs certified by SBA.
- VA’s certification of VOSBs would also be transferred to SBA.
- The handover from VA to SBA would occur 2 years after the bill is enacted. If a self-certifying SDVOSB files an application for formal certification within 1 year of the SDVOSB’s program transfer from VA to SBA, then the SDVOSB could maintain its self-certification until SBA renders a formal certification decision. SDVOSBs that do not file for formal certification within that year would lose their self-certification. This grace period would not apply to VA contracts because SDVOSBs doing VA work are already required to be certified.
- The functions of VA’s Center for Verification and Evaluation (CVE) would be transferred to SBA.
Of course, there are many hoops to jump through (and time) before SDVOSBs see anything different on the ground. At this point, the House and Senate have only agreed to these provisions in a conference committee. Both houses still need to pass the bill. And, of course, the president must sign it before it becomes law. Even then, we’d expect SBA to promulgate implementing regulations that provide additional clarity and details. And by the bill’s own terms, the transfer from VA to SDVOSB would occur two years after the bill’s enactment. In other words, nothing is changing immediately.
Nonetheless, we welcome the eventual implementation of a single SDVOSB contracting program. Not only will it uniformize the program with SBA’s other contracting programs (in terms of requiring formal certification), it will ease contractors’ regulatory compliance. Both results make a great deal of sense.
Stay tuned to GovConBrief to get the latest on this issue. And if you have any questions about SDVOSB requirements, SDVOSB protests, or SDVOSB appeals, please give us a call at 913-954-2630.