What everyone hopes will be a seamless transfer actively began in 2022. The Veterans Administration’s (VA) verification process for Service-Disabled (SD) and/or Veteran-Owned Small Business (VOSB) has been transferred to the Small Business Administration (SBA). According to the VA and SBA, the goal is to implement section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year 2021.
What This Means for Your Veteran-Owned Business
The VA’s current responsibility to verify Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and VOSBs will transfer to SBA on January 1, 2023. To compete for contracts as SDVOSB’s in Federal agencies other than VA, SDVOSBs must apply for certification from the SBA.
SDVOSBs and VOSBs currently listed and verified in Vendor Information Pages (VIP) will not need to immediately take action. This information was already linked to SBA databases and SBA will recognize those business certifications.
If your veteran-owned small business verification expires before January 1, 2023, you’ll need an exception to continue competing for VA set-aside or sole-source contracts under the Veterans First program. Expiring firms were to have applied for reverification on or before October 24, 2022. Businesses that need reverification and whose company ownership and control have not changed since their last verification can qualify for a simplified reverification.
What Won’t Change for Your SD/VOSB
The SBA will use the same criteria and regulations as the VA when assessing Service-Disabled or Veteran-Owned Small Businesses. SDVOSB and VOSB status protests and appeals will continue to be determined by the same decision-maker (the SBA Office of Hearings and Appeals).
Again, if your company has VA-verified status as of January 1, 2023, it will automatically transition to SBA-certified and your firm can continue to compete for contracts at the VA as well as at other Federal agencies.
Your company’s VA verification as of January 1, 2023, will also retain the same period of eligibility as originally designated by VA. Verified status is usually valid for 3 years from the date of your firm’s verification letter.
Recommendations for 2023
- If your VA-verified SDVOSB and/or VOSB eligibility expires after January 1, 2023, you should apply to SBA prior to the eligibility period’s expiration. If your VA-verified firm’s eligibility expires before January 1, 2023, it will remain expired.
- Verified status is required for contracts. No other Federal agency has the authority to set-aside or sole-source to VOSBs, so self-certified VOSB status does not establish eligibility for contracting.
- Small business start-ups and new entrants holding VA verification that are new to competing for Federal contracts should consult their verification letters to confirm their eligibility periods.
- The verification process can seem overwhelming, but it’s worth it. As a veteran, your business is not only eligible for contracting opportunities, VOSB’s are prioritized and sought-after because of your honorable service to a grateful nation.
Updates in the new program will include:
- Firms verified by the VA Center for Verification and Evaluation (CVE) as of January 1, 2023 will be automatically granted certification by SBA for the remainder of the firm’s eligibility period.
- All firms verified by VA as of the January 1, 2023 transfer date will receive a one-year extension to their eligibility giving veterans an extra year to get recertified under the new SBA system.
- The extension will allow SBA to process applications from new entrants into the program and grow the base of certified firms.
New applicants certified by SBA after January 1, 2023, will receive the standard three-year certification period.
Along with the recertification extension, the 2021 National Defense Authorization Act grants a one-year grace period for self-certified SDVOSBs until January 1, 2024.
- During the grace period, businesses have one year to file an application for SDVOSB certification and may continue to rely on their self-certification to compete for non-VA SDVOSB set-asides.
- Self-certified SDVOSBs that apply before the expiration of the one-year grace period will maintain eligibility until the SBA makes a final eligibility decision.
Beginning January 1, 2024, both veteran and service-disabled veteran small business owners will need to be certified to compete for federal contracting set-asides, unless an application from a self-certified firm is pending an SBA decision.
From the Department of Veteran Affairs Memorandum of Guidance
- Action Needed. Generally, SDVOSBs and VOSBs listed as verified in VIP will not need to take action for SBA to recognize their certification. An exception applies for SDVOSBs and VOSBs whose verification expires before the verification function transfers to SBA on January 1, 2023, and which seek to continue competing for VA set-aside or sole source contracts under the Veterans First program. These expiring firms must submit an application for re-verification no later than October 24, 2022.
Applicants seeking reverification and whose business ownership and control have not materially changed since their last verification may qualify for a simplified reverification.
- Background. By law, VA’s current responsibility to verify SDVOSBs and VOSBs will transfer to SBA effective January 1, 2023. This date is referred to in the law as the “transfer date.” In addition, to compete for contracts as SDVOSBs in Federal agencies other than VA, SDVOSBs will need to apply for and obtain certification from SBA.
- Effect of VA Verification. In assessing Veteran or Service-Disabled Veteran ownership and control of a small business, VA and SBA apply the same regulations. Moreover, protests and appeals of SDVOSB and VOSB status are considered and determined by the same decision-maker, the SBA Office of Hearings and Appeals. Firms holding VA verification as of January 1, 2023, will transition to SBA-certified firms and will be able to use that certified status in competing for contracts at VA as well as at other Federal agencies.
- Period of Eligibility. SDVOSBs and VOSBs holding VA verification as of January 1, 2023, will retain the same period of eligibility as originally designated by VA. Generally, VA verification is valid for 3 years from the date of a firm’s verification letter. Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs) Verified as Such by VA in the Vendor Information Pages (VIP)
- Recommendation. Unless the exception described in paragraph 6 applies, VA verified SDVOSBs and VOSBs should take no action until after the January 1, 2023, transfer date, and then submit an application to SBA prior to expiration of their eligibility period as described in paragraph 4.
- Exception. An exception applies if the VA-verified firm’s eligibility expires prior to the January 1, 2023, transfer date. An eligibility period that has lapsed prior to the transfer date will remain expired. Firms seeking to hold SBA certification based on an expiring VA verification decision must apply for VA reverification on or before October 24, 2022. VA provides a simplified reverification f or small businesses whose ownership and control have not materially changed since their previous verification, so applicants should be prepared to respond to screening questions to determine whether they are eligible for this expedited process.
- Deadline. As part of the transfer process, VA’s Center for Verification and Evaluation (CVE) will cease accepting new applications for verification at 5:00 p.m., Eastern Daylight Time, on October 24, 2022. A firm must submit its completed reverification package (or simplified reverification package, if applicable) prior to that deadline. As part of processing these submitted applications, CVE may request additional or supplemental information or documentation, which an applicant should submit promptly.
- Reversion to Self-Certified SDVOSB Status. A VA-verified SDVOSB whose eligibility lapses prior to the January 1, 2023, transfer date will automatically revert to its self-certified SDVOSB status as registered in the System for Award Management, if its eligibility lapses solely due to passage of the expiration date and not due to a determination that the firm is ineligible. Self-certified SDVOSBs may continue to participate in the SBA program for contracts at agencies other than VA, based on a grace period provided by law. For more information, see the Memorandum on Guidance for Self-Certified SDVOSBs.
- Reversion to Self-Certified VOSB Status. Because verified VOSB status is required for VA contracts, and no other Federal agency has authority to set-aside or sole-source to VOSBs, self-certified VOSB status does not establish eligibility for contracting.
- Special Guidance for New Entrants. Small business start-ups and new entrants holding VA verification and beginning to compete for Federal contracts should consult their verification letter to confirm their eligibility period. Most start-ups and new entrants should not be expiring before January 1, 2023. Their eligibility under the SBA program should be determined based on paragraph 4, above. Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs) Verified as Such by VA in the Vendor Information Pages (VIP)
- If you have questions, please call the VA Office of Small and Disadvantaged Business Utilization at 866-584-2344. As always, thank you for your service to our nation.
VOBRT is committed to providing information, clarity, and direction for veteran-owned businesses. If you have questions, please contact Veteran Owned Business Round Table.