Congress Approves Government-wide SDVOSB Certification Requirement; Transfers CVE to SBA

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The House and Senate have agreed to eliminate service-disabled veteran-owned small business self-certification and adopt a government-wide SDVOSB certification requirement, while transferring control of the certification process from the VA to the SBA.

The Conference Report on the 2021 National Defense Authorization Act would require government-wide SDVOSB certification (eventually) and transfer control of the the Center for Verification and Evaluation from the VA to the SBA. Assuming the President signs the bill into law (which, unlike the typical NDAA, remains to seen), SDVOSB self-certification–which is still the law for non-VA contracts–is on its way out.

If you’re not the sort to read an entire National Defense Authorization Act, you can skip right to Section 862, where the SDVOSB changes are set forth. Here are some of the most important pieces of Section 862:

  • Government-Wide SDVOSB Verification Won’t Happen Overnight.  The 2021 NDAA calls for the certification requirement to kick in “2 years after the date of enactment of this Act.” 
  • The SBA Will Be in Charge. Under the 2021 NDAA, the SBA, not the VA, will run the Government-wide SDVOSB certification program. The VA’s Center for Verification will be abolished and its functions transferred to the SBA. This move makes sense, given that the SBA runs all of the other Government-wide socioeconomic programs, and that SBA judges already provide oversight over SDVOSB and VOSB applications. The VA, however, will continue to determine whether an individual qualifies as a veteran or service-disabled veteran.
  • Self-Certified SDVOSBs Get a Grace Period. The 2021 NDAA says that once the program goes live (an event the bill calls the “transfer date”), a self-certified SDVOSB will have one year to file an application for certification.  If the application is filed within the one-year period, the company can continue to rely on its self-certification for non-VA contracts until the SBA makes a decision on the application.  Failing to apply within one year, however, will render the self-certification invalid. 

After the grace period ends, self-certified SDVOSBs will no longer be eligible for set-aside and sole source contracts, government-wide. The 2021 NDAA adds this language to the Small Business Act:

A contracting officer may only award a sole source contract to a small business concern owned and controlled by service-disabled veterans or a contract on the basis of competition restricted to small business concerns owned and controlled by service-disabled veterans if such a concern is certified by the Administrator as a small business concern owned and controlled by service-disabled veterans.

So there you have it: under the 2021 NDAA, government-wide SDVOSB certification will happen, and the SBA will take control of the certification (not “verification,” anymore) program. As I alluded to earlier, the President has threatened to veto the 2021 NDAA for reason unrelated to SDVOSB certification. But even if Congress accedes to the President’s requests, it seems unlikely that Section 862 is going away. Our best bet is that it becomes law in the next several weeks.

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