The VA is seeking public comment on its VOSB and SDVOSB verification regulations in an effort to “improve the regulations to provide greater clarity, to streamline the program, and to encourage more VOSBs to apply for verification.”
As part of the public comment process, the VA is inviting the public to weigh in on previously-suggested changes, as well as answer specific questions about ways the VA might improve its verification rules.
Reacting to a February federal court decision, the VA’s Center for Veterans Enterprise has reversed its position on provisions restricting the rights of service-disabled veterans to transfer their ownership interests in their service-disabled veteran-owned small businesses.
Previously, the VA CVE had taken the position that any restriction on a service-disabled veteran’s right to transfer his or her interest in the company was improper. Because such transfer restrictions are commonplace, many otherwise-eligible SDVOSBs had their verification applications denied.
No more. In a newsletter to SDVOSBs issued yesterday, the VA CVE stated that it would no longer deny verification based on certain ownership transfer restrictions–and offered an expedited reconsideration process to companies previously denied on this basis.
The VA CVE’s position is welcome news, but doesn’t mean that most SDVOSBs should rush to include transfer restrictions in their bylaws or operating agreements, because the SBA may not agree with the VA CVE’s change of heart.
Did your company file a request for reconsideration of a VA CVE SDVOSB verification denial? If so, be prepared to wait awhile–approximately 128 days, according to a recent VA CVE email.
The email, which was sent to a number of SDVOSBs and VOSBs (and kindly shared with me) indicates that the VA CVE is currently processing approximately 300 requests for reconsideration. As a result, the VA CVE says, the time frame to process a request for reconsideration is now more than double the regulatory goal of 60 days.
VetBiz verification is only required for VA SDVOSB set-aside solicitations (and FAA SDVOSB set-asides), right? Not in the eyes of one Air Force contracting officer, who apparently inserted a VetBiz verification requirement in a recent SDVOSB set-aside solicitation.
After being excluded from the competition, a contractor challenged the legality of the VetBiz requirement, and asked the SBA to declare it invalid. Unfortunately for the protester, as the SBA Office of Hearings and Appeals held, the SBA lacks authority to rule on such a protest.
The VA Center for Veterans Enterprise will soon begin giving some applicants the opportunity to correct problems with their SDVOSB verification applications before denying their applications.
In a letter sent yesterday to a number of SDVOSB advocates, VA OSDBU Executive Director Thomas Leney announced that the VA CVE’s new “pre-determination findings” program will launch on May 1, 2013. If the new program works as intended, it could significantly reduce the number of SDVOSBs requesting reconsideration, lead to quicker verifications, and reduce the backlog of verification applications.
As many service-disabled veteran-owned small businesses have discovered, the VA CVE believes that so-called “right of first refusal” provisions prevent veterans from freely selling or transferring their ownership interests. Because such transfer restrictions are commonplace in standard corporate bylaws and operating agreements, countless SDVOSBs have been denied VA CVE verification for including them.
Those days may be over.
In a decision released to the public late last week, the U.S. Court of Federal Claims held that the VA OSDBU had erred by sustaining a SDVOSB eligibility protest on the basis of the company’s right of first refusal provision. That decision, Miles Construction, LLC v. United States, No. 12-597C (2013), also includes other important rulings on the scope of “unconditional” ownership and the VA OSDBU’s evaluation of SDVOSB eligibility protests.
In an important decision impacting many SDVOSB verification applicants, the U.S. Court of Federal Claims has held that the VA’s SDVOSB regulations did not prevent a service-disabled veteran from controlling his company remotely.
In KWV, Inc. v. United States, No. 12-882C (2013), the Court held that a veteran could control his Rhode Island-based construction company by electronic means, even though the veteran spent half of the year residing in Florida.