The SBA has recently announced that it will increase the the agency-level goals for veteran prime contracting and subcontracting. Per the SBA, this increase would apply to both both veteran-owned (VOSB) and service-disabled veteran-owned small businesses (SDVOSBs). The actual increase would double the current goal from from 5% to 10%. But how will this be measured?
Small Business Contracting Goals
The SBA’s small business contracting goals are required by Congress, but they are just voluntary on the part of federal agencies. As we’ve explored before, Congress sets annual goals for federal agencies to meet when awarding contracts and subcontracts to small businesses. These goals include government-wide goals, as well as agency specific goals, which are determined pursuant to 15 U.S.C. § 644(g). The administration can also set or choose not to set agency-specific goals or exceed the statutory goals through things like executive orders.
Per Congress, the five government-wide statutory small business contracting goals are listed below:
| Type of Firm | Goal | Measure of Contract Awards |
| Small Businesses | 23% | Dollar value of prime contract awards |
| Small Disadvantaged Businesses (SDBs) | 5% | Dollar value of prime and subcontract awards |
| Women-Owned Small Businesses (WOSBs) | 5% | Dollar value of prime and subcontract awards |
| Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) | 5% | Dollar value of prime and subcontract awards |
| HUB (Historically Underutilized Business) Zone Small Businesses | 3% | Dollar value of prime and subcontract awards |
Source: 15 U.S.C. § 644(g)(1)(A). Note: “Agency goal attainment is an aspirational pursuit without punitive consequences for failure to meet goals.” The goals are not hard and fast rules. Rather, they are percentages that agencies should strive to meet.
SBA’s Increase
SBA has announced that it will increase the agency goals for fiscal year 2027 to the following goals:
| FY27 Final Goals | ||
| Category | Prime | Subcontracting |
| Small Disadvantaged Businesses (SDB) | 5.00% | 5.00% |
| Women-Owned Small Businesses (WOSB) | 5.00% | 5.00% |
| Veteran-Owned and Service-Disabled Veteran-Owned Small Businesses (SDVOSB) | 10.00% | 10.00% |
| HUBZone | 3.00% | 3.00% |
The 2025 year goal only pertained to Service Disabled Veteran Owned companies and the goal was 5.00%. The achievement for that category was 5.01%, just barely over the stated goal.
The new goals will maintain the percentages for the SDB, WOSB, and HUBZone categories. Only SDVOSB and VOSB is increasing. Interestingly, Congress did not set a separate goal for VOSBs in 15 U.S.C. § 644. That statute only refers to goals for “small business concerns owned and controlled by service disabled veterans.” However, there is a requirement that “the head of each Federal agency shall report to the Administration on the extent of participation by small business concerns, small business concerns owned and controlled by veterans (including service-disabled veterans).” So, the reporting refers to VOSBs, but the goals section only refers to SDVOSBs.
SBA will have to explain how this goal will be measured. Is there a separate 10% goal for SDVOSBs and VOSBs? Are the two categories combined? If they are combined, then that would seem to allow awards to VOSBs to account for the entire category. Is SBA going to encourage agencies to make more awards to VOSBs? Currently, the FAR only allows most agencies (other than VA as described here) to do a set-aside for SDVOSB’s, not VOSBs. The FAR says that a contracting officer “[m]ay set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to SDVOSB concerns.” FAR 19.1405. So, such a set-aside is discretionary and does not extend to VOSBs.
VetCert Certification Uptick
The press release also noted that, in FY 2025, it had approved “more than 2,700 Veteran Small Business Certification (VetCert) applications.” However, this number jumped a ton in 2026. “In FY26, the SBA subsequently approved over 18,000 contracting certifications for veteran-owned small businesses.” That 18,000 number is pretty huge, and accounts for both SDVOSB and VOSB contractors. This shows that the SBA is rapidly approving applications through VetCert.
While the increase in the goal is laudable, SBA should provide more information about how this goal will be measured and how it will apply to VOSBs versus SDVOSBs. We at SmallGovCon will be watching to see how SBA implements this change and whether it has an impact on how agencies do set-asides for VOSBs.
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