The definition of a “service-disabled veteran-owned small business” would be standardized under a new bill introduced by Senators Angus King and Richard Burr.

The King-Burr bill, S.2334, could resolve a serious problem: under current law, the requirements to qualify as a SDVOSB vary (in some cases, significantly) depending on whether an acquisition falls under the VA’s SDVOSB rules or the SBA’s SDVOSB rules.

The King-Burr bill also directs the GAO to study whether it is practical to implement a Government-wide SDVOSB verification system.

The King-Burr bill amends the VA’s statutory authority to require the VA to use the SDVOSB definition found in the Small Business Act.  The apparent intent is to prohibit the VA from using its own criteria to determine who qualifies as a SDVOSB.  Instead, the VA would be required to use the same criteria used by the SBA.  If adopted, the legislation could render obsolete the VA’s current SDVOSB regulatory requirements, including the requirements for “ownership” in 38 C.F.R. 74.3 and “control” in 38 C.F.R. 74.4.

I am on record that the Government should use a single set of rules in determining whether a company qualifies as a SDVOSB.  It makes no sense that a company might qualify as a SDVOSB for a VA set-contract but not for a SDVOSB set-aside under the SBA’s rules, or vice versa.

My only hesitation with the King-Burr proposal is that the SBA’s SDVOSB eligibility rules are not particularly well-developed.  Say what you will about the VA’s SDVOSB regulations (and believe me, plenty has been said), but the VA’s regulations provide a lot of detail about the eligibility requirements.  Not so under the SBA’s SDVOSB regulations, which leave much more room for interpretation.  I wonder whether, if the King-Burr bill becomes law, the VA CVE might interpret the SDVOSB eligibility rules quite differently than they are interpreted by the SBA.

That concern aside, the move toward a consolidated SDVOSB definition ought to be welcomed by SDVOSBs.  Even if the King-Burr solution does not prove to be perfect, it is a strong step in the right direction.

The King-Burr bill also directs the GAO to study whether a Government-wide SDVOSB verification system can be implemented.  Senators King and Burr do not take sides in the debate over whether the VA or SBA is better-suited to conduct a SDVOSB verification program; the bill directs the GAO to examine both agencies’ ability to implement Government-wide SDVOSB verification.

With respect to Government-wide verification, the King-Burr bill does nothing more than order a GAO study.  However, if the GAO were to conclude that Government-wide SDVOSB verification is feasible, I think it would be difficult for Congress to ignore the GAO’s recommendation.  I have long believed that Government-wide SDVOSB verification is inevitable; the only question is when.  If the King-Burr bill becomes law, Government-wide SDVOSB verification may be a reality in the next several years.

I will keep close tabs on the King-Burr bill and its progress in the Senate.  Stay tuned.