VA SDVOSB “Rule of Two”: Contracting Officer’s Price Reasonableness Determination Need Not Defer to FSS

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.

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Don’t Forget the Attachments: A Quick Reminder from SBA’s OHA

Did you remember to staple the cover sheet to your TPS report? And, more importantly, if you recently filed a CVE Appeal with the Small Business Administration’s Office of Hearings and Appeals, did you remember to attach a copy of your CVE denial or cancellation?

In OHA’s recent, and very short, decision, Joy Corporation, SBA No. CVE-155-A (Aug. 13, 2020), it reminded appellants that failure to do so will result in almost instant dismissal. To ensure you avoid this fate, read on.

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VA Updates Guidance on SDVOSB Joint Ventures, Fixes Error

As of September 2019, the VA has updated its Verification Assistance Brief on SDVOSB joint ventures. The old assistance brief was last revised in 2017 and contained some incorrect information. To its credit, this update removes the wrong info and it contains some additional guidance that could be helpful for SDVOSB joint venture members.

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SBA Proposes Consolidated SDVOSB Eligibility Rules

The SBA has released its proposed consolidated rule for SDVOSB eligibility, which was published in the Federal Register today.  Once the rule becomes final, it will apply government-wide, to both VA and non-VA SDVOSB contracts.

For SDVOSBs, a uniform set of rules is a very good thing.  There has been far too much chaos and confusion under the current system, in which the SBA and VA have different SDVOSB eligibility requirements.  But how about the substance of the proposal itself?  Well, there are certainly some things to like–and some areas that could use improvement.

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VA Proposes Elimination of SDVOSB Ownership & Control Rules

The VA has formally proposed to eliminate its SDVOSB and VOSB ownership and control regulations.

Once the proposed change is finalized, the VA will use the SBA’s regulations to evaluate SDVOSB and VOSB eligibility, as required by the 2017 National Defense Authorization Act.

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Court Upholds “Draconian and Perverse” SBA SDVOSB Ownership Rules

The SBA’s strict SDVOSB ownership rules can produce “draconian and perverse” results, but are nonetheless legal, according to a federal judge.

In a recent decision, the U.S. Court of Federal Claims condemned the SBA’s SDVOSB unconditional ownership requirements, while holding that the SBA was within its legal rights to impose those requirements on the company in question.

The Court’s decision emphasizes the important differences between the SBA and VA SDVOSB programs, because the Court held that although the company in question didn’t qualify as an SDVOSB under the SBA’s strict rules, it was eligible for VA SDVOSB verification under the VA’s separate eligibility rules.

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5 Things You Should Know: SDVOSBs and VOSBs

You’ve served your country with pride. Now, as a government contractor, it’s only fair that you get your piece of the pie. Here are five things you should know about the government’s contracting programs for veteran-owned small businesses and service-disabled veteran-owned small businesses:

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