According to the Small Business Administration, the application portal to apply for Veteran Small Business Certification will begin taking applications starting January 9, 2023.
On January 1, 2023, the Small Business Administration took over the Department of Veterans Affairs Center for Verification and Evaluation’s (VA CVE) duty of certifying Veteran Owned Small Businesses (VOSB) and Service-Disabled Veteran Owned Small Businesses (SDVOSB).
Here are a few things you should know about the SBA’s certification program.
Logistically, companies that were certified by CVE prior to January 1, 2023 (or companies still waiting on certification who successfully submitted applications to CVE prior to October 2022) will automatically receive a one-year extension to their program term once approved. In other words, companies that fit this ticket will now be certified to bid on projects as an SD/VOSB for four years instead of the standard three-year certification period. This extension is automatically applied so there is no need for a company to take further action to receive the extension. Once the extension expires, companies will need to use the SBA’s portal moving forward.
Companies that did not meet CVE’s October 2022 cutoff deadline must wait until January 9th to utilize the SBA’s certification portal. SBA will allow companies to self-certify through the year 2023. However, if companies wish to bid on projects past the one-year self-certification period, they must submit an application prior to December 31, 2023 using SBA’s portal. Companies that wish to bid on procurements or task orders in early-2024 may wish to submit their applications prior to this date given SBA’s expected 30-day turnaround for applications.
Lastly, applications submitted on SBA’s “Veteran Small Business Certification Program” portal will auto-populate based on the information contained in each company’s SAM.gov profile. Companies using SBA’s portal may wish to ensure that their SAM.gov profile is up to date prior to submitting their applications.
Differences between the VA CVE and SBA process.
One superficial change–that may only be interesting to practitioners like us–is the use of “certify/certified/certification.” The VA historically had always been sure to use “verify/verified/verification.” It’s even in the name: the “V” in CVE stands for “Verification.” Since the two terms are essentially synonyms, there’s no reason why this should affect any applicants.
More substantively, certification is no longer reliant on specific NAICS codes. CVE used to certify SD/VOSBs based on specific NAICS codes. SBA will now certify based on whether a SD/VOSB is considered small. What matters to SBA is whether or not the SD/VOSB applicant is deemed small under at least one of the NAICS codes listed on the company’s SAM.gov profile.
SBA also envisions lighter, up front document requests. Applicants should still expect to supply SBA with governance documents (operating agreements, articles of organization, resumes, compensation and ownership information). However, unlike CVE, SBA will not ask for tax documents up front. This does not mean that these documents will never be requested, but, the process of providing less documents at the outset should save companies time and resources.
An applicant’s ability to provide full time devotion to the SD/VOSB is also treated differently. In the past, CVE would reject an application if an applicant was not fully devoted to the SD/VOSB. Under SBA’s new rule, the standard is whether an applicant can devote “sufficient” time and attention to the company. For instance, despite the applicant having another job or outside employment, SBA may approve an SD/VOSB application if (1) an applicant can demonstrate that it owns and controls the company and the management of daily operations during normal business hours, or (2) when an applicant would devote fewer hours to the business than its normal hours of operation, the applicant can demonstrate having ultimate managerial and supervisory control over both the long-term decision making and day-to-day management of the business. This standard is consistent with SBA’s devotion rules for WOSB and 8(a) companies.
Finally, in a welcome change, while SBA has indicated that it may take a closer look at JV when it is subject to a protest, SBA’s process for certifying a JV will not require full certification of the JV itself (unlike CVE’s prior requirement). Now, the only requirement is that the managing venturer of the JV must be certified in SBA’s portal as a SD/VOSB. Once certified, the SD/VOSB can then claim the JV as the managing venturer, allowing the JV to pursue contracts based on the managing venturer’s certification. This does not negate the regulatory requirements of JV formation, but does provide a more simplified process for JVs to compete in the SD/VOSB world.
Hopefully, the transition from the VA CVE to the SBA creates a certification process that is more streamlined and one that offers a one stop shop for companies who wish to have multiple small business designations. But who’s to say? An upheaval this dramatic is sure to have growing pains.
Please contact our office if you have any questions about how to certify as an SD/VOSB using the SBA’s new certification portal.
Happy New Year!