Many Service-Disabled Veteran-Owned Small Businesses (SDVOSB) operate under the assumption that SDVOSB certification is only required at the time of initial offer for SDVOSB set aside contracts. But as one company recently learned the hard way, SDVOSB eligibility for VA procurements must be maintained at both the time of offer and award.
In Richard Group, LLC, B-422701.2 (Sept. 18, 2025), GAO upheld the Department of Veteran Affairs’ (the VA) decision to eliminate an offeror from competition where the concern was not a certified SDVOSB at the time of award.
The VA issued a request for proposals (RFP) for the construction of an outpatient clinic. Initially, the RFP was issued as a full and open competition. Following a protest of the procurement’s terms, the VA took corrective action and amended the RFP from unrestricted to a set-aside for service-disabled veteran-owned small businesses (SDVOSB).
Richard Group LLC (Protester) was an eligible SDVOSB when the company submitted its initial offer by the proposal submission deadline, October 3, 2024. After several amendments were issued, the deadline for final proposal revisions was March 25, 2025.
Upon reviewing the Protester’s representations and certifications in the System for Award Management (SAM), the contracting officer learned that the Protester entered 2025 as a large business. According to the VA, the Protester was not an SDVOSB at time of award, as required under the VA Acquisition Regulation (VAAR) 852.219-73.
Thus, the Protester was eliminated from competition and filed a protest with GAO.
The Protest
Even though the Protester was a large concern in 2025, the Protester argued that SBA’s regulations only require the concern to be an eligible SDVOSB at time of proposal submission, citing the regulation:
Only certified VOSBs and SDVOSBs are eligible to submit an offer on a specific VOSB or SDVOSB requirement. For a competitively awarded VOSB/SDVOSB contract . . . the concern must . . . be a certified VOSB or SDVOSB and meet the eligibility requirements of a VOSB or SDVOSB in § 128.200 at the time of initial offer or response which includes price.
13 C.F.R. § 128.401(a) (emphasis added).
In response, the VA noted that SBA’s regulation was not the only regulatory requirement in the RFP. The procurement was set aside for SDVOSB concerns pursuant to the Veterans First Contracting Program, as implemented in subpart 819.70 of the VAAR.
VAAR 819.7003 states the following:
(b) At the time of submission of offers/quotes, and at the time of award of any contract, the offeror must represent to the contracting officer that it is a—
(1) SDVOSB or VOSB eligible under this subpart;
(2) Small business concern under the North American Industry Classification System (NAICS) code assigned to the acquisition; and
(3) Certified SDVOSB/VOSB listed in the SBA certification database at https://veterans.certify.sba.gov/ (see 13 CFR 128).
Additionally, the amended RFP included VAAR 852.219-73, VA Notice of Total Set-Aside for Certified Disabled Veteran-Owned Small Businesses (Jan 2023), which stated,
[a]ny award resulting from this solicitation shall be made to a certified SDVOSB listed in the SBA certification database who is eligible at the time of submission of offer(s) and at the time of award.
(VAAR) 852.219-73 (emphasis added).
The Protester argued that the “plain reading of the VAAR section cited to and relied on focuses on eligibility,” and “SBA determines a company’s size as of its initial offer date.” Citing to SBA’s regulation, the Protester argued that an SDVOSB is eligible (and remains eligible) for an award if the company was an SDVOSB at the time of its submission of offer.
While the VA agreed with the Protester’s assertion that SBA regulations govern a company’s qualification as an SDVOSB, the VA noted that for this procurement, the VA relied on its independent authority under the Veterans First Contracting Program. As such, the VA contended that the associated eligibility requirements under the VAAR also applied, and “go beyond the SBA’s determination of eligibility.”
Decision
GAO agreed with the VA’s position, concluding that VAAR 852.219-73 unambiguously demonstrated “an offeror is only eligible for award if it is a verified SDVOSB concern at the time of proposal submission and remains a verified SDVOSB concern at the time of award.”
The ordinary and common meaning of the rule expressly provided for eligibility to be determined based on status both at the time of proposal submission and again at the time of award, GAO stating further,
In other words, adopting the protester’ s position and interpreting the phrase to mean that an SDVOSB concern remains eligible for award based only on its status at the time of proposal submission would improperly render superfluous the regulation’s language referring to eligibility “at the time of award.”
The Protester argued that the VA’s interpretation would mean that SDVOSBs “would have to stop responding to solicitations on an arbitrary date” or risk spending funds on a proposal for a procurement that may be awarded after the SDVOSB is no longer eligible.
To this, GAO stated that its Office “does not weigh the burdens and benefits of a particular procurement regulation.”
While not further addressed by GAO, the Protester raised legitimate concerns for how this decision could negatively affect SDVOSBs moving forward.
This case serves as an important reminder for SDVOSB concerns to closely monitor their certification status throughout the entire procurement process for VA awards, not just at time of offer. Changes in ownership, control, or size could impact awards for VA procurements. Note that this decision applies only to VA procurements, as other agencies generally do not have the same language about status being determined at time of award. Of course, a contractor must be aware of both the solicitation language and any specific agency FAR deviations to determine whether eligibility depends on award date.
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