The VA’s “rule of two” for service-disabled veteran-owned small businesses provides a powerful contracting preference. Thanks to the rule of two, the VA awarded 23.39% of prime contracting dollars to SDVOSBs in Fiscal Year 2019, compared to 4.39% governmentwide.
But the rule of two has its limits. Importantly, before issuing an SDVOSB set-aside, the Contracting Officer must have a reasonable belief that “the award can be made at a fair and reasonable price that offers best value to the United States.” And, as a powerful federal court recently held, the fact that an SDVOSB’s prices have been accepted by the GSA under the Federal Supply Schedule program does not require the VA to accept those prices as fair and reasonable in a rule of two analysis.
The federal government spends more than $20 billion annually on contracts with service-disabled veteran-owned small businesses. But the rules governing SDVOSB eligibility can be complex and confusing – starting with the fact that the government runs not one, but two SDVOSB programs.
On January 14, join me for a webinar, hosted by our friends at Govology, covering the ins-and-outs of Uncle Sam’s SDVOSB programs. In this session, I will demystify the key SDVOSB eligibility requirements in plain English and provide an update on some major pending changes to the SDVOSB programs. It’s easy to register: just follow this link. I hope to see you (virtually, anyway) on January 14!
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.
In some circles, the VA CVE application process for SDVOSB/VOSB certification has a reputation as being very cumbersome and time-consuming. But while applying for verification isn’t exactly fun, it doesn’t take an extraordinarily long time for most new applicants to be verified. In fact, according to the VA’s Office of Small and Disadvantaged Business Utilization, the average processing time is a mere 34 days.
A federal court has ruled that the VA violated the SDVOSB Rule of Two, as well as a more recent statute, by moving SDVOSB set-aside requirements to the AbilityOne program.
If you think you heard this before, you’re not going crazy or living your own personal Groundhog Day. The court’s ruling is just the latest in a long-running debate about how the VA should balance the SDVOSB and AbilityOne contracting preferences.
Ever since the VA set up its SDVOSB verification program, critics of SDVOSB self-certification have been pushing for the government to expand SDVOSB verification government-wide. Now, it might finally happen.
Section 831 of the House of Representatives’ version of the Fiscal Year 2021 National Defense Authorization Act would expand SDVOSB verification government-wide, formally rename it “certification,” and transfer certification authority from the VA to the SBA.
After the Supreme Court’s unanimous Kingdomware decision affirmed the VA’s statutory obligation to prioritize SDVOSBs in its contracting, the VA authorized the use of so-called “tiered evaluations.” In a typical VA tiered evaluation, various categories of offerors can submit proposals, but SDVOSB proposals are considered first, then VOSB proposals, and so on.
Recently, a non-SDVOSB small business protested the VA’s decision to open discussions with the only SDVOSB offeror to submit a proposal–discussions that allowed the SDVOSB to win the contract. But according to the GAO, the small business couldn’t file a valid protest because the small business wasn’t in the same tier.