The VA’s Center for Veterans Enterprise is rejecting about 60% of initial SDVOSB verification applications, according to Thomas Leney, the VA OSDBU Executive Director. Leney gave the figure in testimony before the House Veterans Affairs Subcommittees on Oversight and Investigations and Economic Opportunity on Friday, August 3.
In an excellent piece on Federal News Radio’s website, reporters Esther Carey, Ruben Gomez and Jared Serbu offer some other interesting insights from Leney’s testimony–including the incredibly broad definition of “unconditional” ownership and control used by the CVE.
According to Leney, “unconditional” ownership and control means that the veteran “can do anything you want with that business, make any decision concerning that business, to include selling that business for a dollar, and no one else in that business — no other minority owners — can do anything to prevent you from doing so.”
Some lawmakers and others at the hearing questioned the necessity for such a broad definition of control, stating that completely shutting out minority investors and spouses is unrealistic and prevents legitimate firms from being verified. Tying the issue back to the 60% rejection figure, Richard Weidman, the policy director for Vietnam Veterans of America, stated that the fact that so many SDVOSBs are initially rejected for verification suggests that the CVE has gone too far.
Will these complaints have any substantive impact on how the CVE evaluates SDVOSB verification applications? Only time will tell. In the meantime, the only way for a SDVOSB to avoid being in that 60% is to make sure that its corporate documents reflect that service-disabled veterans unconditionally own and control the company–including the ability to “sell that business for a dollar” without anyone else’s approval.