The VA is proposing a major overhaul to its SDVOSB program regulations–including the rules governing ownership and control.
In a proposed rule released today, the VA is seeking to “find an appropriate balance between preventing fraud in the Veterans First Contracting Program and providing a process that would make it easier for more VOSBs to become verified.” And while the proposal isn’t perfect, it looks like a step in the right direction.
Even if the VA Center for Verification and Evaluation has found that a service-disabled veteran “unconditionally” controls a SDVOSB, the SBA may nonetheless determine that other individuals or entities also control the company within the meaning of the SBA’s affiliation rules.
As demonstrated by a recent decision of the SBA’s Office of Hearings and Appeals, VA CVE verification does not shield a SDVOSB from an adverse SBA affiliation determination, even if that determination is based on a finding that non-veterans control the company.
An incumbent contractor performing VA CVE SDVOSB verification functions was ineligible to be be re-awarded an order for those services because of an unmitigated organizational conflict of interest.
In a recent decision, the U.S. Court of Federal Claims upheld the VA’s decision to cancel the award to the incumbent contractor and exclude that contractor from the follow-on order.
The VA CVE appears to have survived a Congressional effort to strip the CVE of its verification function.
In May, the House of Representatives included a provision in the 2015 NDAA that would have required the CVE to transfer SDVOSB verification to the SBA. But after negotiations with the Senate, the House passed a new version of the 2015 NDAA last week–and the new version omits the verification transfer provision.
SDVOSBs—and basic fairness and common sense—were big winners in a recent decision issued by the U.S. Court of Federal Claims.
In its decision, the Court held that the VA’s Center for Verification and Evaluation violated the law when it disqualified a SDVOSB, without giving the SDVOSB the opportunity to contest the reasons for the disqualification. In an opinion reminiscent of last year’s landmark Miles Construction case, the Court then held that the CVE’s substantive reasons for the disqualification were arbitrary and unreasonable.
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Last week, the U.S. House of Representatives passed the 2015 defense authorization bill. The House-passed version of the 2015 National Defense Authorization Act would transfer VetBiz SDVOSB verification from the VA to the SBA.
If the Senate agrees, and the President signs the bill into law, the process of transferring SDVOSB verification from the VA CVE to the SBA could begin later this year.
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.