Back to Basics: SDVOSB Program Eligibility

Recently, SBA’s VetCert Program announced that it had gotten through its backlog, meaning that the system has returned to normal, so to speak. With this in mind, many new service-disabled veteran-owned small businesses (SDVOSBs) no doubt are looking at getting into the SDVOSB program. Indeed, some of you reading this may be the owners of some of those businesses. Considering that we just looked at an SDVOSB appeal regarding the control requirements for an SDVOSB, today, we’re going to go further and provide a general rundown of the SDVOSB Program to update our past post on this topic.

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OHA SDVOSB Appeal: Voting Provisions Scuttle Veteran Control

In a recent decision, SBA’s Office of Hearings and Appeals (OHA) emphasized the importance of a careful reading and complete understanding of the control and ownership requirements for Service-Disabled Veteran Owned Small Businesses (SDVOSBs). This decision provides contractors with an excellent opportunity to brush up on SBA’s control rules regarding qualifying and non-qualifying owners. As the appellant found out in this case, while it may seem to some at first glance that simple majority ownership by the service-disabled veteran is enough to meet SDVOSB requirements, voting provisions matter as well. Failure to keep in mind all aspects of SDVOSB requirements could lead to a denial of SDVOSB status. Let’s take a look at the language of the regulation in question, and how this case illustrates the potential consequences of overlooking a critical item in an otherwise-compliant application for SDVOSB certification. 

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SBA’s SDVOSB Warning: Spell Out Veteran Control in Business Documents and Minutes

It is quite common for businesses in the private sector to share control and duties among many executives or individuals. However, as many who have looked into SBA socioeconomic certifications have found out, to gain certification in a set-aside program, basically all control needs to reside with one individual. Recently, the SBA’s Office of Hearings and Appeals (OHA) reviewed a SDVOSB recertification denial, and provided a reminder to contractors interested in the SDVOSB and VOSB program that the veteran must be the sole individual in control.

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Govology Webinar: An Introduction to Government Small Business Certifications (2025 Update), January 21, 2025, 1:00 pm EST

Steven Koprince, Govology legal analyst and retired founder of Koprince McCall Pottroff will be presenting this webinar. In this course he provides a big-picture overview of small business certifications in the government marketplace and you will learn about various federal small business certification programs, including Small Business Self Certification, Small Disadvantaged Business (SDB) & 8(a), Service-Disabled Veteran-Owned Small Business (SDVOSB), Veteran-Owned Small Business (VOSB), Historically Underutilized Business Zones (HUBZone), Woman-Owned Small Business (WOSB), and Economic Disadvantaged Woman-Owned Small Business (EDWOSB). 

This course has been updated to reflect recent changes set forth in two SBA regulations released in late 2024. He will also touch on state and local certification programs and provide information on additional training and resources you can use to develop a deeper understanding and get help with any federal, state, and small business certification program. Register here.

SBA OHA: Operating Agreements Must Clearly Demonstrate Control

A recent appeal before the U.S. Small Business Administration’s Office of Hearings and Appeals (OHA) upheld SBA’s denial of an application for a veteran-owned small business because its operating agreement gave too much control to a non-veteran owner and failed to identify a veteran as the highest officer. The decision in Facekay LLC demonstrates the importance of strict adherence to the control requirements laid out by the various SBA programs.

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OHA: Show me the Management, or Fail SDVOSB Certification

A recent OHA decision reminds us that it’s important to show and tell the SBA how a company seeking certification is meeting the SBA’s requirements for control of a socioeconomic company. Like many of these decisions involving SBA’s programs, it comes out of the Service-Disabled Veteran-Owned Small Business (SDVOSB) VetCert program. That’s because the SDVOSB program allows appeals of denials of certifications. The other programs don’t allow such broad reasons for appeals from certifications (or at least have restrictions on them).

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Update: SBA Will Eliminate Remaining SDVOSB Self-Certification December 2024

As SmallGovCon readers may recall, SBA has already eliminated the ability to self-certify as a Service-Disabled Veteran-Owned Small Business (SDVOSB) for all prime contracting opportunities set aside for SDVOSBs. This change occurred January 1, 2024 and meant that self-certified SDVOSBs will no longer be eligible for set-aside and sole source contracts. We wrote about the change here. However, the rule change left in place the self-certification ability for self-certified SDVOSBS, but only for subcontracting purposes and government goaling purposes. This will be changing in December 2024.

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