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Veteran-Owned Small Business (VOSB) Verification Shifts from VA to SBA
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Veteran-owned Small Businesses (VOSBs) Verification Shifts from VA to SBA

Currently, it takes 73 days to process an application for a business owner wanting to be certified as a Veteran-Owned Small Business (VOSB) and there is a backlog of 706 applications, according to a town hall at the Office of Small & Disadvantaged Business Utilization. These are two of many reasons why the Department of Veterans Affairs (VA) has recently proposed two changes regarding the verification and programs for Veteran-owned Small Businesses. Knowing how to get verified will help you when working with a factoring company when you're ready for invoice factoring.

  1. The VA has proposed to switch ownership and control for verification and certifying VOSBs to the United States Small Business Administration (SBA).
  2. The VA has proposed to revise the regulations for programs such as the Veterans First Contracting Program to streamline and align requirements to reduce the burden on contractors.

Ownership & Control (O&C) Moves from VA to SBA

The Vets First Verification Program has been in place since the Veterans Benefits, Heath Care and Information Technology Act of 2006, which granted the VA with authorization to certify businesses as VOSBs and Service Disabled Veteran-Owned Small Businesses (SDVOSBs). This program is independent of the SBA’s SDVOSB set-aside program.

The Government Contractor's Handbook, including invoice factoringTo qualify for a set-aside program with the SBA, such as a Women Owned Small Business (WOSB) or 8(a) business, a small business now has to go through a third party certification. However, the majority of SDVOSBs are self-certified and may not actually be a SDVOSB. Some have even won awards as a SDVOSB even though they’re not actually qualified as a SDVOSB. Sometimes, this causes delays in procurement and other problems down the line.

The VA is proposing to amend several definitions to align with the SBA. Here’s what you need to know: 

  • The National Defense Authorization Act (NDAA) designates the SBA as the Federal Agency responsible for creating regulations relating to ownership and control (O&C) of small businesses.
  • The VA is proposing to remove and amend definitions that relate to clarify ownership and control.
  • The VA proposes that its Center for Verification and Evaluation (CVE) assist the VA Contracting Officers in identifying VOSBs and to communicate with the SBA on small business status of entities.
  • Center for Veterans Enterprise changes to Center for Verification and Evaluation (CVE)
  • gov is now va.gov/osdbu
  • In a Joint Venture, at least one venture must be a VOSB.
  • The VA’s new proposed regulations point to Title 13 of the Code of Federal Regulations, which are the SBA’s regulations governing small business programs (see, Part 125).
  • While Part 125 is limited to SDVOSBs, these regulations now incorporate the same ownership criteria for VOSBs by reference.
  • The definitions of “Control,” will be the same for SDVOSBs as VOSBs.
  • The SBA, not the VA, will make affiliation determinations.
  • The VA is proposing to amend and update its VAAR in increments to revise any policy superseded by changes in the FAR. This will create streamlined efforts with both the VAAR and FAR and remove any outdated and duplicated requirements.
  • These simplifications would create a new regulatory scheme clarifying when a contracting officer must solicit competition under the Veterans First Contracting Program.

The new proposed rules are much more appropriate, user-friendly and easier for government contractors. You can find the complete proposed rulings here and here.


Here for You at Every Step of Your Government Contract

We’re here to provide resources every step of the way – even when things are changing. Download “The Government Contractor’s Handbook” to get eight chapters full of resources and step-by-step guides. If you've already got a contract on hand, contact us to learn more about invoice factoring or apply now here

The Government Contractor's Handbook, a guide including invoice factoring

This content is provided for informational purposes only and should not be relied upon as financial, legal, or tax advice.


Topics: Veteran Small Business, GovCon

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