Vets battle for more contract wins

New GWAC could bring more business to some vet-owned companies

Veterans hope that the upcoming award of a governmentwide acquisition contract set aside for businesses owned by former service members wounded in combat will help send contracting revenue to those businesses.

So far, the fortunes of service-disabled veteran-owned businesses have been uneven. Although the General Services Administration reports that contracts for those businesses coming through the GSA schedules have increased dramatically since fiscal 2004, agencies are still missing the target of sending 3 percent of their business to the firms.

Veteran advocates see promise in the latest numbers, but frustrations linger.

Congress set the 3 percent target in 1999 legislation but did not authorize the Small Business Administration to make rules to that end until 2004. Less than 0.5 percent of federal contracting dollars went to businesses owned by service-disabled veterans in 2004. The government has yet to hit the 3 percent target despite the attention called to the issue and a procurement provision that lets agencies limit competition for some contracts to only those businesses.

That frustrates Rep. Steve Buyer (R-Ind.), a veteran of the Persian Gulf War who now chairs the House Veterans’ Affairs Committee.

“If the federal government is going to promote social equity through contract set-aside programs, service-disabled veterans should be at the head of every agency’s priority list,” Buyer said.

Procurement policy reserves billions of dollars for small businesses owned by minorities, women, the severely disabled and blind, Alaska natives and those doing business in Historically Underutilized Business Zones, he said.

“While the government’s outreach to these groups is justified and commendable, why then does agency procurement slacken when it comes to doing business with service-disabled veterans?” Buyer asked. “Is there a more deserving group of Americans?”

GSA charts increase for vets
As measured by GSA schedule orders, agencies seem to be making more use of service-disabled veteran-owned small businesses. The businesses earned $600 million through the schedules in fiscal 2005, a 500 percent jump compared with $120 million the year before, according to GSA figures.

David Bibb, GSA’s acting administrator, said the latest revenue numbers are a great start for Operation Breakout, the agency’s initiative that supports Executive Order 13360. President Bush called for increased government business with service-disabled veteran-owned firms in that executive order. Operation Breakout began in 2004, the same year Bush signed the order.

Dave Grover, president and chief executive officer of Washington Square Associates, an engineering services, telecommunications and information technology solutions company, is optimistic about the rise in revenue numbers. He expects larger revenues in fiscal 2006. “We’ve seen it go from lip service to real interest,” said Grover, a veteran of the Vietnam War.

Rich Carter, spokesman for the House Small Business Committee, and its chairman, Rep. Don Manzullo (R-Ill.), said agencies are on track to meet the goal for the first time this fiscal year. However, Grover said Congress could give the law a sharper bite. The Veterans Benefits Act of 2003, which provides statutory authority for the target, does not mandate that agencies meet it. “We’d like to see ‘shall’” in the legislation, he said, instead of making it an unenforced goal.

Nevertheless, Grover doesn’t expect agencies to reach the 3 percent mark overnight. He said that would be unrealistic. Lawmakers and President Bush, he said, have clear expectations for agencies.

“It is time for the bureaucrats to comply with the law,” Buyer said.

Carter said no plan exists for making the goal mandatory.

Although the 500 percent jump in revenues through the GSA schedule contracts may sound impressive, it does not add up to much money, Grover said. The total is still less than 1 percent of the schedule contracts’ business.

According to a Small Business Administration report compiled from Federal Procurement Data System information, only 0.38 percent of contracting dollars in fiscal 2004 went to businesses owned by service-disabled veterans.

Nadeem Butler, president and CEO of Technatomy, an IT solutions and professional services company, said a fraction of a percent is better than zero. He said he sees more sincerity and a more concerted effort from agencies. Butler served as an Army Ranger from 1985 to 1988. In testimony at a May 24, 2005, Small Business Committee hearing, Frank Ramos, director of Small and Disadvantaged Business Utilization at the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics, said one problem with reaching the 3 percent marker is that not many businesses owned by service-disabled veterans exist. In fiscal 2003, he said, only 2,175 qualified firms were listed in the Central Contractor Registration System.

“We concluded that the federal government must heighten its campaign to identify and register service-disabled veteran-owned small businesses,” Ramos told the committee.

DOD has created a strategy to find qualified firms and then publicize them to DOD agencies, Ramos said.

From the industry standpoint, Butler said, DOD’s seminars and trade shows have introduced him to various business opportunities.

On the civilian side of government, the Small Business Administration has helped match service-disabled veteran-owned small businesses with government agencies or larger firms looking for small businesses’ help. The departments of Homeland Security and Agriculture and the Internal Revenue Service have similar efforts.

VETS GWAC comes in June
GSA will award the long-awaited Veterans Technology Services GWAC by June, according to the agency, more than a year after it issued the initial solicitation. An IT procurement, VETS will be limited to small businesses owned by service-disabled veterans.

John Moliere, an advocate for veteran-owned businesses, said the VETS GWAC had been held up long enough. “I would like to see it announced in conjunction with Memorial Day,” he said.

He also said he believes the GWAC will augment the revenue numbers directed to qualified businesses enough that the government will exceed the 3 percent goal.

Butler said the government should set aside more such opportunities for high-end services, which his company offers. The GSA schedules include more general services, such as janitorial services and facility maintenance, in addition to IT and other high-skilled offerings.


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Who qualifies?

Businesses that meet the following criteria are considered owned by service-disabled veterans:

  • One or more service-disabled veterans must own at least 51 percent of the business. The ownership must be direct; if the veterans own a company that in turn owns a second company, the second company is ineligible.

  • If a partnership owns the company, one or more service-disabled veterans must own at least 51 percent of each class of partnership.

  • If the company is a corporation with stock, service-disabled veterans must own at least 51 percent of each class of stock issued.

  • The disabled veterans, or their spouses or caregivers if the disability is severe, must control the daily business operations of the company. In addition, one of the disabled veterans must hold the highest managerial office, usually president or chief executive officer.

  • The veterans must have disabilities that were incurred in the course of their military service.

Source: Small Business Administration
Vets win few contracts despite set-aside rules

Businesses owned by service-disabled veterans got only six set-aside contracts in the second quarter of fiscal 2006, out of 86 competitions that Input tracked, according to the consulting and research firm.

The federal government reserved nearly $1 billion in set-aside competitions for information technology-related prime contracts in the second quarter, according to Input’s report.

Other set-aside competitions included 16 awards to companies under 8(a) provisions and one award to a firm in a Historically Underutilized Business Zone.

Input predicts that the federal government will award more than $4 billion in contracts via set-aside competitions in the third quarter, said Marcus Fedeli, Input’s manager of federal opportunity products.

— Matthew Weigelt

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