At the dawn of the new year, the office in charge of verifying whether a small business meets the requirements for veteran-owned status at the federal level will move from its historical home at the Department of Veterans Affairs to the U.S. Small Business Administration.
This means that the latests an entity can be a self-certified SDVOSB will be December 31, 2023. On January 1, 2023, the Center for Verification and Evaluation (CVE) will transition completely to the SBA. That starts the clock will start ticking on the one-year grace period for self-certified SDVOSBs.
This move has been in the works for years (since 2015ish) and is among the final steps to consolidate the federal government’s two distinct but very similar programs designed to help small businesses owned by veterans, particularly service-disabled veterans.
The SBA has long been the arbiter of the federal government’s small business programs—as it should: the Small Business Act gives it exclusive authority over the size of a business. Thus, the SBA has the 8(a) business development program for socially and economically disadvantaged small businesses, the women-owned and economically-disadvantaged women-owned small business programs, the HUBZone program, and the service-disabled veteran-owned small business program. These programs are governmentwide and provide set-aside work for businesses that qualify.
Meanwhile, the Veterans Benefits, Health Care, and Information Technology Act of 2006 created within the VA an acquisition program to benefit small businesses owned and controlled by veterans and service-disabled veterans. This is called the Veterans First Contracting Program and it allows the VA to set aside VA work for SDVOSBs and VOSBs.
At the outset, there were significant difference between the SBA’s SDVOSB program and the VA’s SDVOSB/VOSB program. As those programs have begun to merge, most of the differences have been sanded away. In October 2018, the SBA and the VA both started using the SBA’s eligibility rules. That same time, the SBA started hearing CVE protests and appeals like this one.
The main differences that have remained are that the VA recognizes VOSBs in addition to SDVOSBs and the SBA has allowed entities to self-certify while the VA requires entities to seek verification from CVE.
According to the SBA’s frequently asked questions, nothing about CVE’s verification process will change due to the relocation, but the SBA will maintain the database that lists all verified concerns.
Importantly, this transfer will not create a governmentwide VOSB program. The VA will remain the only agency that is allowed to set aside work for VOSBs.
CVE coming to SBA does spell the end of self certification however. Self-certified entities will receive a one-year grace period, but after that have to be verified to continue to bid on SDVOSB set-asides regardless of agency.
Self-certified entities are encouraged to submit their applications to CVE now. They do not need to wait for the transfer. One last key point, the grace period can last up to a year but lasts only until CVE makes a determination on verification.