Getting Service Disabled Veteran Contracts & Avoid SDVOSB Fraud

When it comes to getting service disabled veteran owned SDVOSB small business contracts, the Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50) established an annual government-wide goal of not less than 3% of the total value of all prime contract and subcontract awards for participation by small business concerns owned and controlled by service-disabled veterans.

On December 16, 2003, the Veterans Benefits Act of 2003 (Public Law 108-183) was passed by Congress. Section 308 of the Act (Public Law 108-183) established a procurement program for Service Disabled Veteran Owned Small Business Concerns (SDVOSBC).

Getting Service Disabled Veteran Owned Contracts by Statute

This SDVOSB Program provides that federal contracting officers may restrict competition to Service Disabled Veteran Owned Small Business concerns and award a sole source or set-aside contract where certain criteria are met.

The Small Business Administration (SBA)has also issued an interim final rule, establishing a Service Disabled Veteran Owned Small Business Concern Program.
This program establishes the criteria to be used in federal contracting to determine service-disabled veteran status; business ownership and control requirements; guidelines for getting service-disabled veteran-owned small business contracts; and bid protest and appeal procedures for Service Disabled Veteran Owned Business procurements.

Purpose of Getting Government Contracts for Disabled Veterans

The purpose of getting government contracts for disabled veterans is to provide procuring agencies with the authority to set acquisitions aside for exclusive competition among service-disabled veteran-owned small business concerns, as well as the authority to make sole source awards to service-disabled veteran-owned small business concerns if certain conditions are met. (See Code of Federal Regulations (CFR) 13 CFR 125.8-125.10).  The US Congress believes that the veteran-owned community is deserving of getting preferential treatment in the procurement marketplace like other categories.

Getting government contracts for service disabled veterans (SDVOSB) can be an excellent way to grow your business. The SBA offers a program to SDVOSBs that grants certain competitive advantages to veteran-owned businesses when bidding on government contracts.

Under the SDVOSB program, service disabled veteran-owned small businesses are given higher priority in contract awards and are eligible for price evaluation preferences when competing against other businesses for government contracts. This gives veteran owned companies a significant advantage over non-veteran owned firms in winning federal contracts. Additionally, these qualified businesses have access to various resources from the SBA that can help them navigate the process of applying for and obtaining contracts.

Qualifications

In order to qualify for the SDVOSB program, a business must be at least 51% owned and controlled by service-disabled veterans. This means that these individuals must each own an equal or greater than fifty-one percent stake in the company and have total control of every aspect of the company’s daily operations. To prove eligibility under this program, eligible businesses must provide proof of ownership and control from all owners such as tax returns, bank statements, etc.

Additionally, they must also submit a complete application including any required documentation such as certifications from the Department of Veterans Affairs or other verification of their status as a disabled veteran.

There are many benefits to joining the SDVOSB program; however, it is important to keep in mind that there are also requirements and limitations associated with government contracts for the disabled. It is recommended that businesses interested in bidding on VOSB contracts take the time to research these requirements thoroughly before submitting an application. Additionally, many companies find it beneficial to consult professional advisors or experts who can provide guidance throughout the process.

By taking advantage of the SDVOSB program, service-disabled veteran owned small businesses can gain a competitive edge when bidding on government contracts, potentially resulting in increased overall success and growth for their organizations. With the right knowledge and support, any business may be able to capitalize on this advantageous opportunity.

Eligibility for Disability

In order to be eligible for the Service Disabled Veteran Owned Business Program, you and your business must meet the following criteria:

• The Service Disabled Veteran (SDV) must have a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense
• The SDVOSBC must be small under the North American Industry Classification System (NAICS) code assigned to the procurement
• The SDV must unconditionally own 51% of the SDVOSBC
• The SDVO must control the management and daily operations of the SDVOSBC
• The SDV must hold the highest officer position in the SDVOSBC

SDVOSB Fraud and Avoiding Criminal Liability

Is it Realistic to get Service Disabled Veteran Owned Small Business Contracts as a Small Company?

Like any business venture, there must be strategic planning and a serious commitment to being a government contractor.  Your status alone does not automatically entitle you to a million –dollar contract.

Instead, you must meet the basic requirements mentioned above and still demonstrate your ability to perform. Many large businesses are seeking out service disabled small businesses for teaming agreements and joint venture contracting opportunities. Federal procurement law allows these types of relationships.

The federal government has heightened the focus on government contract awards to service disabled veteran owned business throughout the United States. The general FAR rules state:

Subpart 19.14 Service Disabled Veteran Owned Small Business Procurement Program

19.1401  General.

(a) The Veterans Benefit Act of 2003 (15 U.S.C. 657f) created the procurement program for small business concerns owned and controlled by service-disabled veterans (commonly referred to as the “Service-Disabled Veteran-owned Small Business (SDVOSB) Procurement Program”).

(b) The purpose of the Service Disabled Veteran Owned Small Business Program is to provide Federal contracting assistance to service-disabled veteran-owned small business concerns. 19.1402  Applicability. The procedures in this subpart apply to all Federal agencies that employ one or more contracting officers. 19.1403  Status as a service-disabled veteran-owned small business concern.

(a) Status as a service-disabled veteran-owned small business concern is determined in accordance with 13 CFR Parts 125.8 through 125.13; also see 19.307.

(b) At the time that a service-disabled veteran-owned small business concern submits its offer, it must represent to the contracting officer that it is a- (1) Service-disabled veteran-owned small business concern; and (2) Small business concern under the North American Industry Classification System (NAICS) code assigned to the procurement.

(c) A joint venture may be considered a service-disabled veteran owned small business concern if-

(1) At least one member of the joint venture is a service-disabled veteran-owned small business concern, and makes the representations in paragraph

(b) of this section; (2) Each other concern is small under the size standard corresponding to the NAICS code assigned to the procurement;

(3) The joint venture meets the requirements of paragraph 7 of the explanation of Affiliates in 19.101; and

(4) The joint venture meets the requirements of 13 CFR 125.15(b). (d) Any service-disabled Many businesses make the dangerous mistake of falling prey to large businesses seeking government contracting relationships solely for the purpose of using the service disabled status.

There is real genuine relationship involved. As a small business, you must tread these waters lightly. Bid protest are on the rise with GAO and you do not want to get caught up in any fraudulent activity with the government.

What can you do to better your chances of acquiring service disabled veteran owned small business government contracts?

1. You want to get legal representation to develop compliant teaming agreements with the federal rules

2. Retain a government contracts attorney to act on your behalf with another business seeking to develop relationships

3. If you are a new small business, ensure that you have someone on your team that understands federal procurement rules and legal matters

4 If you are approached by a large business, you must understand that you are typically the prime contractor and may be ultimately responsible for the contract. The stakes are high in the event of default.

5 Watch for teaming agreements that give large business control over the situation. The ostensible contractor rule is alive and well. Having guidance in this area reduces SBA size protests.

6. Know what your capability is and your limits.

If you need legal assistance or Avoid SdVOSB fraud when getting government contracts for disabled veterans, contact Theodore Watson & Associates online or call 202-827-9750 or call toll free 1-866-601-5518 today.