Despite a longstanding and very common misconception, the VA’s SDVOSB verification requirement doesn’t apply to non-VA SDVOSB contracts.
As the SBA Office of Hearings and Appeals recently reiterated, it was “simply not correct” to believe that a company was required to be verified in VetBiz to be awarded a non-VA SDVOSB contract.
The SBA will begin hearing protests and appeals related to inclusion in the VA’s SDVOSB/VOSB CVE database on October 1, 2018.
On March 30, the SBA published a final rule, which responded to public comments made on the proposed rule issued last year. SBA’s Office of Hearings and Appeals will begin deciding these cases in the fall.
The SBA has released its proposed consolidated rule for SDVOSB eligibility, which was published in the Federal Register today. Once the rule becomes final, it will apply government-wide, to both VA and non-VA SDVOSB contracts.
For SDVOSBs, a uniform set of rules is a very good thing. There has been far too much chaos and confusion under the current system, in which the SBA and VA have different SDVOSB eligibility requirements. But how about the substance of the proposal itself? Well, there are certainly some things to like–and some areas that could use improvement.
The VA has proposed expanding its definition of the “good character” required to own or control an SDVOSB or VOSB.
The VA’s proposed rule would exclude many people convicted of felonies (including felonies unrelated to business integrity), which may raise questions about the rule’s fairness. And I have to wonder–is the VA’s proposal consistent with the Congressional directive requiring the VA to use the SBA’s SDVOSB eligibility rules?
The VA has formally proposed to eliminate its SDVOSB and VOSB ownership and control regulations.
Once the proposed change is finalized, the VA will use the SBA’s regulations to evaluate SDVOSB and VOSB eligibility, as required by the 2017 National Defense Authorization Act.
The VA Center for Verification and Evaluation unreasonably decertified an SDVOSB based on the results of an SBA SDVOSB decision.
According to the U.S. Court of Federal Claims, it was improper for the VA to remove the SDVOSB from the VA’s database without evaluating whether the SBA’s determination was consistent with the VA’s separate SDVOSB requirements.
The SBA’s strict SDVOSB ownership rules can produce “draconian and perverse” results, but are nonetheless legal, according to a federal judge.
In a recent decision, the U.S. Court of Federal Claims condemned the SBA’s SDVOSB unconditional ownership requirements, while holding that the SBA was within its legal rights to impose those requirements on the company in question.
The Court’s decision emphasizes the important differences between the SBA and VA SDVOSB programs, because the Court held that although the company in question didn’t qualify as an SDVOSB under the SBA’s strict rules, it was eligible for VA SDVOSB verification under the VA’s separate eligibility rules.