The 2017 National Defense Authorization Act will essentially prevent the VA from developing its own regulations to determine whether a company is a veteran-owned small business.
Yes, you heard me right. If the President signs the current version of the 2017 NDAA into law, the VA will be prohibited from issuing regulations regarding the ownership, control, and size status of an SDVOSB or VOSB–which are, of course, the key components of SDVOSB and VOSB status. Instead, the VA will be required to use regulations developed by the SBA, which will apply to both federal SDVOSB programs: the SBA’s self-certification program and the VA’s verification program.
The VA failed to verify the accuracy of a contractor’s representation that it was a veteran-owned small business, according to a new report issued by the VA’s Office of Inspector General.
According to the VA OIG, the VA failed to verify the claim of Westar Development Company, LLC to be a VOSB–and “[t]he evidence does not support a finding that Westar is or ever has been a Veteran-Owned Small Business.” The VA’s failure to verify Westar’s VOSB status is just one of many serious flaws identified by the VA OIG in its audit of the award of a major VA lease to Westar.
On February 27, the VA CVE sent an email to companies listed in the VetBiz database, suggesting that all documentation submitted to the CVE may be subject to Freedom of Information Act requests. Many SDVOSBs and VOSBs were outraged–was the VA really stating that tax returns, payroll, bank signature cards, and other closely-guarded information would be made available to the public?
Now, after push back from SDVOSBs and VOSBs, the CVE has issued a press release clarifying that some documentation submitted to the CVE may be withheld under FOIA on a “case by case basis” and that the CVE will seek to limit the exposure of proprietary and personally identifiable information.
The press release is a good start, but in the wake of its misguided email, the CVE needs to do more to assure SDVOSBs and VOSBs that their proprietary information is safe in the government’s hands.
Perhaps no single aspect of federal government contracting causes more confusion than the fact that the government currently runs two SDVOSB programs: one under the VA’s rules and the other under the SBA’s.
The current system can lead to inconsistent results, such as a company being a “SDVOSB” for purposes of VA contracts, but not those issued by other agencies (or vice versa). As SmallGovCon readers know, I am on record as stating that the “two SDVOSB programs” approach is idiotic and ought to be scrapped. (Okay, maybe I wasn’t on record with the word “idiotic” before. I guess I am now.)
But while I cross my fingers and hope that Congress will simplify things, SDVOSBs are stuck with the current system. And, as a recent SBA Office of Hearings and Appeals case demonstrates, SDVOSBs should be aware of the important differences between the two SDVOSB programs.
The VA SDVOSB protest process has been criticized by some (including a certain Kansas-based government contracts attorney) for failing to offer a right of appeal. Under the VA’s rules, if a protested company was found to be ineligible as a SDVOSB, its only option was to sue the VA in federal court–an expensive and time-consuming proposition.
Today, the VA published an interim final rule, under which a protested SDVOSB has the right to an appeal within the VA. The new system isn’t perfect, but it’s a step in the right direction.
The SBA’s claim that it could not access information provided by an 8(a) program applicant in DVD format was “not credible,” according to a recent 8(a) program appeal ruling issued by the SBA Office of Hearings and Appeals.
In Sunrise Staffing, SBA No. BDPE-499 (2013), the SBA OHA–in an unusually sharply-worded opinion–rejected the SBA’s excuses for not reviewing relevant information provided by the 8(a) program applicant, and granted the applicant’s 8(a) appeal.
The VA CVE has instructed verified SDVOSBs to remove so-called “large NAICS codes” from their VetBiz Vendor Information Pages profiles within 30 days–or else.
According to a recent email from the VA CVE (which was kindly shared with me), SDVOSBs must remove any NAICS codes for which they do not qualify as a small business. Failing to remove these “large NAICS codes” may result in potentially harsh penalties, including debarment.