Sometimes, task force meetings are held just for the sake of having meetings. However, on June 2nd and 3rd the Interagency Task Force on Veterans Small Business Development (IATF) and Advisory Committee on Veterans Business Affairs (ACVBA) met to discuss important issues facing small businesses. This shed much needed light on the issues fast approaching and what steps the SBA needs to take.
The main topic of discussion was the pending CVE transfer. The transfer, as I soon found out, is deceptively complex. In a separate point, SBA noted that the Biden Administration announced it will use the purchase power of the federal government to make more awards to disadvantaged businesses, raising the target from 5% to 10%.
The star of the show, however, was the CVE transfer. So, what does this mean for you?
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.
Fans of the blog know that we’re wild about joint ventures: they allow small business contractors to use their size status while, at the same time, leveraging their joint venture partner’s experience and capabilities.
But joint ventures—particularly joint ventures under one of the SBA’s socioeconomic programs—can be tricky to create. For joint ventures between a small and a large company, the venturers first need an approved mentor-protégé agreement. And regardless, for the joint venture to qualify under a socioeconomic designation, that joint venture must have a compliant agreement.
But that’s still not enough to create a compliant joint venture. As a recent SBA Office of Hearings and Appeals decision explains, the small business venturer must unequivocally control the joint venture.
As we’ve written about on the blog, SDVOSB regulations were consolidated under the SBA’s rules beginning October 1, 2018, and those changes included some good and bad changes. We recently noticed a single letter in one of the changes that, while most likely a typo, could potentially affect the meaning of one part of the new regulation.
SmallGovCon readers know that the federal government currently operates two SDVOSB socio-economic designations: a VA-specific program (that requires the business to be verified by the VA’s Center for Verification and Evaluation), and a program through the SBA (that allows the business to self-certify).
Veterans have long been confused by the fact that the Government operated two separate SDVOSB programs, each with its own standards. The consolidated rule will eliminate that confusion, and that’s a very good thing. There are also several other pieces of the new SDVOSB eligibility rule that veterans should like–but also some that aren’t so great, or that require further clarification as to how they’ll be applied.
We provided a broader overview of the new regulations earlier last week. Now it’s time for me to get on my soapbox. Without further ado, here’s my list of the good, bad, and the downright ugly from the new SDVOSB regulations.
The SBA takes its SDVOSB joint venture requirements very seriously, and even a relatively minor deviation or omission can be enough to render a joint venture ineligible.
Time and time again, the SBA’s Office of Hearing and Appeals has shown that it will strictly enforce the rules governing SDVOSB status. OHA’s stance on SDVOSB joint venture agreements is no different. A recent OHA ruling reinforces that SDVOSB joint venture agreements must abide by the letter of the regulation when it comes to required items in the agreement.