VA officials toughen small business rules

A new rule defines the eligibility requirements for businesses to get verified status as a veteran-owned small business

Veterans Affairs Department officials have finalized the eligibility requirements for businesses to get a verified status as a veteran-owned small business, which entitles them to compete for certain set-aside contracts. A rule published in the Feb. 8 Federal Register explains the requirements and examination procedures.

Under the new rule, officials from the Center for Veterans Enterprise, an office in the VA’s Office of Small and Disadvantaged Business Utilization, have the authority to verify any information given by a business as part of the application process to become a recognized VOSB. The officials can also make on-site checks, the rule states.


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CVE may even examine a company whenever it receives credible information that calls the company’s eligibility as a VOSB into question, according to the rule.

The rule requires an eligible owner have only one business in the program at a time and the owner must work full-time in the business, the notice states.

“VA has determined that annual examinations are necessary to ensure the integrity of the verification program,” officials wrote in the notice. The annual certification is consistent with other recertification standards in the Central Contractor Registry.

The Government Accountability Office has revealed numerous attempts to scam the government out of money by posing as a fake small business. At least 10 fake service-disabled veteran-owned small businesses swindled roughly $100 million from the Small Business Administration’s set-aside contracts, GAO testified in November.

About the Author

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

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Reader comments

Sun, Mar 7, 2010 Michelle Maryland

As a startup SDVOSB, I have major issues with the requirement to work full-time in the business. As a safety net, I am still working my full time job AND putting in close to 30hrs per week on the startup. There really needs to be some kind of nod to those that are legitimate SDVOSB that are just in the nascent stages. How will one ever enter into that category full time without it? There needs to be some sort of migration rule for those in my situation (and I'm sure I'm not the only one).

Thu, Mar 4, 2010 Bob

Right on Mr Shinseki set the bar higher for Disabled Veterans than for others the Disabled Veterans are used to having to overcome obstacles at VA and elsewhere.

Mon, Mar 1, 2010 John Moliere Virginia

As a stakeholder with the VA, I have two broad comments. the first deals with the scofflaws and felons. Why doesn't the VA simply debar them for a significant period.Second is the decision the VA is making for the business owner. As a Service Disabled Small Business Owner of two complimentary businesses I am entitled to have only one vertified. I'm still the same disanble dvet. The emphasis on the SDV portion of the designation does not lend adequate credence to the fact that the two businesses have two separate cost centers. One with college graduates holding advance clearances working in High Tech for the DOD and VA Central Office. The other firm is comprised of PBX certified technicians. These folks are dployed around the country at VAMCs. All are well trianed technicians, none are college graduates and they all have VA clearances. The Wokmens Comp Insurance for these folks is enormously higher than the College graduate counterparts. There are two companies for BUSINESS reasons. The laor pools and insurance pools and overhead pools are significantly different. I own 51% of both companies and I run them both...so why can't they both receive verified SEDVOSB status? I am still me, the Service Disabled Veteran.

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