Category Archives: Service-Disabled Veteran-Owned Small Businesses

GAO: For VA, SDVOSB Set-Asides Trump GSA Schedule Buys

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“Veterans First” really means “Veterans First,” even if the VA would prefer to conduct an unrestricted procurement under the General Services Administration’s Federal Supply Schedule rather than conducting market research to see if the procurement can be set-aside for service-disabled veteran-owned small businesses.  So said that GAO in an important bid protest decision for SDVO small businesses, Aldevra, B-405271 (Oct. 11, 2011).

In Aldevra, the VA attempted to purchase certain supplies for a VA Medical center through the GSA Schedule on an unrestricted basis.  Aldevra, a SDVOSB, filed a protest with the GAO, arguing that before using the GSA Schedule, the VA should have conducted market research to determine whether two or more offers would be received from eligible SDVOSBs, and if so, should have set-aside the competition for SDVOSBs.

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JVs Must be Listed in VetBiz for VA SDVOSB Set-Asides

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Under the Department of Veterans Affairs’ Veterans First contracting program, an eligible service-disabled veteran-owned small business must be listed as a verified SDVOSB in the VA’s Vendor Information Pages to qualify for a SDVOSB award.  But does this requirement apply to joint ventures?

Yes, according to the VA—and the GAO has upheld the VA’s interpretation.  In A1 Procurement JVG, B-404618.3 (July 26, 2011), A1 Procurement LLC and Green Carpet Landscaping & Maintenance, Inc. created a joint venture, named A1 Procurement JVG.  A1 Procurement LLC was a SDVOSB firm verified in the VetBiz system.  Green Carpet was not a SDVOSB.

The VA rejected the joint venture’s proposal because the joint venture was not listed in the VetBiz database.  The joint venture filed a bid protest with the GAO, arguing that the VA should have accepted its offer because the managing partner, A1 Procurement LLC, was listed in the database, and that a joint venture should not be required to be separately listed if the managing venture is listed.

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GAO: SDVOSBs Preferred Over Veteran-Owned Businesses for VA Procurements

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Unlike most agencies, the Department of Veterans Affairs offers contracting preferences for businesses owned by veterans who are not service-disabled.  However, as the GAO confirmed in Buy Rite Transport, B-403729, B-403768 (Oct. 15, 2010), even at the VA, service-disabled veteran-owned small businesses are preferred over veteran-owned small businesses.

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SDVOSB Eligibility: Veteran “Controls” Company Despite Living 900 Miles From Headquarters

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A service-disabled veteran “controlled” his company within the meaning of the SBA’s service-disabled veteran-owned small business regulations, despite living more than 900 miles from the company’s headquarters, according to a SDVOSB appeal decision of the SBA’s Office of Hearings and Appeals.

In SDVOSB Appeal of Command Languages, Inc., SBA No. VET-149 (2009), the SDVOSB performed contracts around the world, leading SBA OHA to conclude that the service-disabled veteran’s physical location was largely irrelevant to his ability to control his company.

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SDVOSB Protests Cannot Be Filed By Telephone

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If you want to file a SDVOSB protest with the SBA, put down the cell phone, because you cannot phone it in.

The SBA’s regulations governing size protests permit a protester to “file” its protest by telephone (and follow up by putting the protest in writing).  But the same regulations do not apply to protests of a service-disabled veteran-owned small business’s eligibility.

In SDVOSB Appeal of Veterans Construction of South Carolina, LLC, SBA No. VET-164 (2009), the SBA Office of Hearings and Apepals held that the regulation governing SDVOSB eligibility protests “simply does not allow protests by telephone.”  SBA OHA upheld the SBA’s dismissal of a SDVOSB  protest because the protester had attempted to file by telephone.

When it comes to SDVOSB protests, the rule is simple: put it in writing.

Amended Bylaws Can’t Rescue Ineligible SDVOSB

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The regulations governing the SBA’s service-disabled veteran-owned small business program are clear: to qualify as an SDVOSB, a business must ensure that a service-disabled veteran serves as its highest officer.

The SBA will examine a SDVOSB’s bylaws to see whether the provision is met.  If not, belatedly amending the bylaws won’t save the business’s eligibility for a contract it bid upon before the amendment, as demonstrated by a SDVOSB appeal decision of the SBA Office of Hearings and Appeals.

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False SDVOSB Certification Results in Criminal Conviction

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In this era of enforcement, lost contracts are just the tip of the iceberg when it comes to false certifications of eligibility for the SBA’s and VA’s small business programs.  The story of John White and Mitsubishi Construction Corp. should serve as a dire warning about just how serious the consequences of false certifications can be.

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