VA proposes contract preferences for veterans

The Veterans Affairs Department proposed revising its acquisition regulations to boost federal dollars going to businesses owned by military veterans, according to a notice today in the Federal Register.

According to the proposed changes, VA contracting officers would be able to restrict competitions for contracts to service-disabled veteran-owned small businesses and veteran-owned small businesses. They also could award sole-source contracts to  those companies.

The proposal would:

• Allow for noncompetitive sourcing for purchases less than $100,000. Above that threshold, other contracting rules apply.
• Require contracting officers to set aside contracts that are more than the $100,000 threshold if an officer can find two or more veteran-owned small businesses to submit offers at reasonable prices.
• Allow for noncompetitive contracts if, after negotiations with a business' owner, the department can get a reasonable price.
• Ask contracting officers to consider veterans’ bids or other contractors that proposed to use veteran-owned businesses as subcontractors.
• Require contractors to use veterans’ businesses if they propose to do so.
• Require veterans to register their small businesses with VA’s VetBiz.gov database.
• Establish a mentor/protégé program.
• Recommend the debarment of a company that deliberately lies about its ownership.

VA proposed the new regulations because of a 2006 law that requires the department to create an acquisition program that offers preferences for veterans.

Despite the proposal, VA said it has already increased how much business it does with veterans. In fiscal 2007, the department doubled the percentage of dollars it awarded to service-disabled veteran-owned small businesses, according to preliminary data from VA. The department awarded $819 million, or 6.95 percent, of its $11.8 billion in contracts awarded in fiscal 2007. In fiscal 2006 it awarded 3.39 percent of $10.3 billion to that category of businesses, according to those figures.

In addition, the department awarded 10.13 percent of $11.8 billion in contract awards to veteran-owned small businesses in 2007. In 2006, it awarded 6.49 percent of $10.3 billion to those businesses, according to VA’s figures. However, its contracting dollars declined in several other socioeconomic categories of small businesses.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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