Government-Wide SDVOSB Certification: More Details on New Bill

I’ve long predicted that Congress would eventually adopt a formal, Government-wide SDVOSB certification program (or “verification” program, if you prefer).  Maybe my crystal ball is finally right.  As my colleague Matt Schoonover wrote last week, a new bill introduced in the House of Representatives would do just that.

The full text of the bill has now been published.  Here are some of the key details of the Government-wide SDVOSB certification proposal.

    • Government-wide SDVOSB verification won’t happen overnight.  The House bill calls for the certification requirement to kick in “2 years after the date of enactment of this Act.”  What’s more, the SBA and VA can jointly extend the enactment date “an unlimited number of times by a period of not more than 6 months.”  Now, I know that starting up a Government-wide verification program isn’t a simple task, but two years ought to be enough time to get it done.  Are extensions–especially unlimited extensions–really necessary?
    • Self-certified SDVOSBs will get a grace period.  The House bill says that once the program goes live (an event the bill calls the “transfer date”), a self-certified SDVOSB will have one year to file an application for certification.  If the application is filed within the one-year period, the company can continue to rely on its self-certification for non-VA contracts until the SBA makes a decision on the application.  Failing to apply within one year, however, will render the self-certification invalid.  One can quibble about whether companies should get more or less time, but I think that a grace period is a good idea.  Otherwise, SDVOSBs might experience the sort of problems that occurred when the VA’s verification program began.  The VA, you may recall, ultimately adopted a short-lived class deviation to the VAAR in an effort to allow expedited treatment of certain applications.  It seems that Congress may have learned something from that unpleasant experience.
    • SBA will be in charge.  As Matt mentioned in his post, the House bill says that the SBA, not the VA, will be in charge of the Government-wide SDVOSB certification program.  Many veterans, who have been frustrated with the VA’s oversight, will cheer this move.  And the move makes sense, given that the SBA runs all of the other Government-wide socioeconomic programs.  That said, I’d caution veterans to temper their enthusiasm somewhat about this particular change.  The VA, it’s true, made a pretty big mess of things in the early years of the CVE, but it has improved quite a bit since then.  At the same time, the SBA’s own track record is rather spotty.  The SBA’s newest initiative, the All Small Mentor-Protege Program, has been a big success in terms of speed and efficiency.  But that’s not true of the 8(a) Program, where applications can sometimes languish for many, many months.  I’m going to wait and see how the SBA does before judging whether this move will be a good thing for veterans.
    • SDVOSB sole source threshold will increase.  Although it doesn’t have anything directly to do with certification, the House bill would increase the sole source threshold for non-VA SDVOSB contracts.  For manufacturing contracts, the sole source threshold would increase from $6.5 million to $7 million.  For other contracts, the threshold would jump from $4 million to $5 million.  While this is good news for SDVOSBs, only the VA would retain the ability to award SDVOSB sole source contracts even if the agency is aware of multiple qualified SDVOSBs.  Outside of the VA, SDVOSB sole source contracts will likely remain rare, because a Contracting Officer can only award a sole source SDVOSB contract when he or she “does not have a reasonable expectation that offers would be received from two or more” SDVOSBs.

Ordinarily, my colleagues and I wouldn’t spend so much time discussing a bill.  After all, most bills introduced in Congress never become law.  But I think that some version of this bill will be adopted.  The non-VA SDVOSB program is the only remaining socioeconomic preference program allowing self-certification.  (Although see here for my recent take on the WOSB certification program).  Congress seems uncomfortable allowing self-certification to continue.  Whether as a stand-alone bill, or perhaps part of the 2020 NDAA, my guess is that Government-wide SDVOSB certification is on its way.

We will keep you posted.