As many of you likely already know, back in late 2020, Congress made two changes to the SDVOSB program when it passed the 2021 National Defense Authorization Act. First, all SDVOSBs will be required to certify with the government starting on January 1, 2023. Second, the responsibility for conducting SDVOSB certification will transfer from the VA’s Center for Verification and Evaluation (CVE) to the SBA. Seems simply enough, but, obviously, this raises some questions: What if a SDVOSB is already certified with CVE? How much time do self-certified SDVOSBs have to act? Will the CVE still be accepting applications in the meantime? Helpfully, the VA has produced some guidance, and in this post we’re going to expand on it.
First, a quick reminder: Self-certification, for now, is enough for SDVOSB set-asides for non-VA SDVOSB set asides. SDVOSB set asides from the VA can only go to SDVOSBs certified with the VA. But as mentioned above, the 2021 National Defense Authorization Act changes this starting January 1, 2023.
What if I’m already certified through the government?
First things first: If your SDVOSB is already certified through the CVE, you do not need to worry about SBA certification until the end of your 3-year eligibility term per the SBA’s proposed rule from July. So, all of you that have already gotten certified through the VA, just mark your calendars for when you need to renew your eligibility. Now, this is officially just a proposed rule, but we see no reason why the SBA would change its mind on this.
My SDVOSB is self-certified, is the CVE still accepting applications?
Now, for the self-certified SDVOSBs or those planning on seeking certification, the CVE is still accepting certification applications. However, it will stop doing so soon per the guidance the VA released:
“VA’s Center for Verification and Evaluation (CVE) will cease accepting new applications for verification at 5:00 p.m., Eastern Daylight Time, on October 24, 2022. A firm must submit its completed application package prior to that deadline.”
So, the CVE will stop accepting new applications on October 24, 2022.
I can’t get my application into CVE by then! Will I lose my SDVOSB status on January 1?
Fear Not. As we have discussed before (and VA’s guidance echoes), there is going to be a grace period for self-certified SDVOSBs when the change occurs on January 1, 2023. As the guidance states:
“Because of the large number of self-certified SDVOSBs and the need to ensure an orderly transition to the new certification program, the law provides a grace period to permit self-certified SDVOSBs to continue to compete for Federal contracts. Self-certified SDVOSBs may continue to rely on their self-certified status for 1 year after the transfer date.”
So, there’s no need to panic if your SDVOSB is self-certified, it will remain certified for all non-VA contracts eyes for the entire calendar year of 2023. However, this self-certification does not qualify a company for VA set-asides, as that would still require a company to be certified per VA regulations.
So, when do I actually have to certify my SDVOSB with the SBA?
The answer is by the end of the grace period, so January 1, 2024. As the guidance notes:
“If a self-certified SDVOSB applies to SBA for certification during the 1-year grace period, the SDVOSB may continue to apply its self-certified status until SBA has acted upon the certification application. Otherwise, the firm’s status as a self-certified SDVOSB terminates on the 1-year anniversary of the transfer date, or January 1, 2024.” Again, this likely doesn’t apply to VA set-asides; for that self-certification won’t cut it.
What if I my application with SBA is still processing as of January 1, 2024? Do I lose my SDVOSB status if I’m self-certified?
I’m sure everyone reading this is well-aware that the government can experience tremendous backlogs, especially when it asks for thousands of applications to be made by various businesses. Thankfully, as long as you merely submit your application to the SBA prior to January 1, 2024, you can continue to rely on your self-certified status until the SBA informs you of its decision.
If I submit my application for my SDVOSB and get denied before January 1, 2024, can I still rely on my self-certification until January 1, 2024?
This is a good question. The guidance from the VA states that if the SDVOSB applies during the grace period, “the SDVOSB may continue to apply its self-certified status until SBA has acted upon the certification application.” The language doesn’t expressly state what happens if the application is denied, but we believe the phrase “until SBA has acted upon the certification application” is the key here. At that point, whether the SDVOSB is considered certified depends upon the SBA’s decision.
Interestingly, this creates an incentive for self-certified SDVOSBs to wait until just before January 1, 2024, to apply with the SBA. After all, if the self-certification will be considered valid until then, why risk submitting an application that is denied any earlier than is necessary? Another effect of this is that the SBA will likely face a sudden avalanche of applications at the end of 2023, which will further delay the processing of applications. Don’t be surprised if SBA issues a rule addressing this when it inevitably realizes these considerations.
Can I submit my application to the SBA before January 1, 2023?
No, the guidance from the VA makes it clear that SBA will not accept any SDVOSB certification applications prior to January 1, 2023.
My SDVOSB is new and neither certified with the VA nor self-certified, what should I do?
In the VA’s opinion, you should act quickly. If you want certification with the VA so you’ll be eligible for VA contracts, you have until October 24, 2022. After that, you’ll have to wait until January 1, 2023, to apply. As for contracts with other agencies, the VA’s guidance states that if you achieve self-certified status prior to January 1, 2023, you should be covered by the grace period. So, act fast!
Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919.
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