SDVOSBs and VOSBs will only be required to obtain reverification every three years under an interim final rule adopted yesterday by the VA.

The VA’s new rule replaces the prior rule, which required reverification every two years.  The purpose of the change?  To “reduce the administrative burden on SDVOSB/VOSBs regarding participation in VA acquisition set asides for these types of firms.”

When the VA originally finalized its SDVOSB/VOSB program in 2010, VA “anticipated that annual examinations were necessary to ensure the integrity of the Verification Program.”  But the VA soon had second thoughts.  In 2012, the VA adopted a two-year program term.

Now, the VA believes that even a biennial reverification is unnecessary.  The VA explains that data from Fiscal Year 2016 “shows that out of 1,109 reverification applications, only ten were denied.”  Therefore, “only 0.9 percent of firms submitting reverification applications were found to be ineligible after two years.”

The VA notes that “[o]ther integrity aspects of the program remain adequate to oversee a 3-year eligibility period.”  For example, the VA “conducts a robust examination of personal and company documentation” when a firm first applies, and the VA’s regulations require a participant to inform the VA “of any changes that would adversely affect its eligibility.” Additionally, the VA “has the right to conduct random, unannounced site examinations of participants” or examine a participant “upon receipt of specific and credible information that a participant is no longer eligible.”  And of course, in the case of an SDVOSB or VOSB set-aside acquisition, VA contracting officers and competitors “have the right to raise a SDVOSB/VOSB status protest” of the awardee.

The VA’s change is an “interim final rule.” Ordinarily, that means that it would be effective immediately, pending public comments. However, VA tells me that because of the recent Executive Order freezing new regulations, this rule won’t kick in until March 21, 2017.  Comments are due April 24, 2017, and I imagine that they will be overwhelmingly positive.