Tag Archives: VA CVE Verification

VA SDVOSB Reconsideration Success Rate At 48%–And Other Highlights From The GAO SDVOSB Report

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VA SDVOSB reconsideration requests were approved in 48% of cases resulting in a decision, according to a GAO report released on Monday.

In the lengthy report, which weighs in at 63 pages, the GAO broadly concludes that the VA CVE has made progress when it comes to the verification of SDVOSBs, but has a ways to go in order for the SDVOSB verification process to be quick, effecient and effective.

This broad conclusion is not in the least bit surprising to anyone who has followed the evolution of the VA SDVOSB verification program.  However, the report is also packed with a great deal of interesting information about SDVOSB verification at the VA–including statistics on applications, reconsideration success rates, and more.

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VA CVE Reconsideration: A Primer for SDVOSBs

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The VA CVE reconsideration process is an important component of the VA’s SDVOSB verification program–especially in light of news earlier this year that the VA’s Center for Veterans Enterprise is rejecting 60% of new SDVOSB verification applications.

For many companies, SDVOSB verification hinges on a successful VA CVE reconsideration request, but  VA CVE reconsideration is often misunderstood.  After working with many SDVOSBs to successfully obtain verification through the VA CVE reconsideration process, I have compiled this list of common “Q&As” regarding SDVOSB reconsideration.

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SDVOSBs, VA CVE Verification, and the “Full-Time Management” Rule: Unfair to Start-Ups

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If you are a service-disabled veteran hoping to start a new SDVOSB, the VA’s Center for Veterans Enterprise has a message for you: quit your day job.

Yes, you heard that right.  Under one of the the VA’s SDVOSB eligibility rules (38 C.F.R. § 74.4(c)(3) to be precise), “one or more veterans or service-disabled veterans who manage the applicant or participant must devote full-time to the business during normal working hours of firms in the same or similar line of business.”

The VA currently interprets this so-called “full-time management” rule to essentially bar a SDVOSB from receiving verification if a service-disabled veteran manager does not work 40 hours per week for the SDVOSB.  If the veteran holds a second job, the VA CVE ordinarily denies verification, stating that the veteran cannot be working full-time for the SDVOSB if he or she is also working another job.

“Wait a second,” several service-disabled veterans have told me in surprise, “my company is brand new.  There won’t be 40 hours of work to do until I win a contract.  In the meantime, I need my current job to pay the bills.  Isn’t there a special rule for my situation?”

The answer, unfortunately, is “no.”  But there should be a special rule, because in my opinion, the full-time management requirement unfairly and needlessly penalizes SDVOSB start-ups.

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VA CVE: Reconsideration Decisions Will Take 90 Days, Not 60

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A decision on a request for reconsideration of a denied SDVOSB verification application will take approximately 90 days instead of 60 days, according to the VA Center for Veterans Enterprise.  In a letter emailed recently to one service-disabled veteran, who authorized me to publish an excerpt on SmallGovCon, the VA CVE stated:

The regulation, 38 CFR 74, states that CVE has 60 days, when practicable, to make a final decision associated with the request for reconsideration. Unfortunately we have received an exceptionally large number of requests for reconsideration, and currently almost 600 applications are in the reconsideration process.   As a result, it is no longer practicable to process these within 60 days.   Historically, 20% of companies receiving an initial denial are requesting reconsideration. We have shifted and added resources in an effort to speed up the process. In order to be fair to all applicants, we continue to process all requests for reconsideration on a first come, first served basis. We currently estimate that we will be able to provide a decision within 90 days of receiving the request for reconsideration, so you can expect a decision no later than [date redacted]. As soon as we can give you a better estimate of the timeframe for decision, we will do so.

It is little wonder that the VA CVE is experiencing reconsideration overload, because the VA CVE is denying 60% of initial SDVOSB verification applications.  I am sympathetic to the VA CVE’s overworked employees, but I have much more sympathy for the eligible service-disabled veterans who will suffer from the reconsideration delays.

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VA CVE Rejecting 60% Of New SDVOSB Verification Applications

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The VA’s Center for Veterans Enterprise is rejecting about 60% of initial SDVOSB verification applications, according to Thomas Leney, the  VA OSDBU Executive Director.  Leney gave the figure in testimony before the House Veterans Affairs Subcommittees on Oversight and Investigations and Economic Opportunity on Friday, August 3.

In an excellent piece on Federal News Radio’s website, reporters Esther Carey, Ruben Gomez and Jared Serbu offer some other interesting insights from Leney’s testimony–including the incredibly broad definition of “unconditional” ownership and control used by the CVE.

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VA Replaces Annual SDVOSB Re-Verification With Two-Year System

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The VA has enacted an interim final rule changing the re-verification requirement for SDVOSBs.  Currently, SDVOSBs must be re-verified annually, a process some service-disabled veterans have complained is unnecessary and unduly burdensome.

In the preamble to the rule, the VA writes that although it initially believed annual re-verification would be necessary, “in administering this program since February 2010, VA has concluded that an annual examination is not necessary to adequately maintain the integrity of the program and proposes a 2-year eligibility period.”  The VA notes that although formal re-verification will only be required every two years, SDVOSBs must continue to maintain ongoing program eligibility throughout their terms.

The amendment to the VA’s system has been released as an “interim final rule,” meaning that it is effective immediately, but subject to change.  Comments on the rule (which I would expect will be overwhelmingly positive) are due by August 27, 2012.

FAA: SDVOSBs Must Be Verified in VetBiz to Receive Set-Aside Awards

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Want to receive a service-disabled veteran-owned small business set-aside contract from the Federal Aviation Administration?  Get listed in the VA’s VetBiz database.  The FAA has adopted a regulation requiring VA VetBiz certification as a requirement of winning a FAA SDVOSB set-aside award.  One interesting question: will other agencies follow the FAA’s lead?

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